What Does Buying Property Really Cost?
When buying property in Thailand, you don't just pay the purchase price. Transfer taxes and fees add between 3% and 6% of the property value depending on the situation. That may sound manageable – but for a villa at 15 million THB, that's quickly 450,000 to 900,000 THB (approx. USD 12,500–25,000) in additional costs. It pays to know each item in detail.
The Four Main Fees
Up to four different charges apply at the Land Department during ownership transfer. Which ones actually apply depends on how long the seller has owned the property and whether they are acting as an individual or a company.
Transfer Fee
The Transfer Fee is 2% of the official appraised value (not the actual purchase price). The appraised value is set by the Treasury Department and is often below market price. In practice, this fee is frequently split 50/50 between buyer and seller – but this is negotiable and should be clearly specified in the purchase contract.
Stamp Duty
Stamp Duty is 0.5% of the purchase price or appraised value – whichever is higher. Important: Stamp Duty and Specific Business Tax are mutually exclusive. If SBT applies, Stamp Duty does not. Stamp Duty is typically borne by the seller.
Specific Business Tax (SBT)
SBT of 3.3% (3% tax + 0.3% municipal tax) applies when the seller has owned the property for less than 5 years (calculated from the date of ownership transfer, not the purchase date). If the seller has held the property for more than 5 years or it has been their registered primary residence for at least one year, only the lower Stamp Duty applies.
Withholding Tax
Calculating Withholding Tax is the most complex part. For companies, it's straightforward: 1% of the purchase price or appraised value (whichever is higher). For individuals, the tax is calculated progressively based on the appraised value, distributed over the number of years of ownership (maximum 10 years), following Thailand's regular income tax rates (5%–35%).
Who Pays What?
There is no legal requirement in Thailand specifying who bears which fees. Everything is negotiable. However, the following split has become standard practice:
- •Transfer Fee: 50/50 (1% each)
- •Stamp Duty or SBT: Seller
- •Withholding Tax: Seller
For new developments, it's common for the buyer to cover the full Transfer Fee while the developer bears the remaining fees. Make sure the cost allocation is explicitly stated in the purchase contract.
Annual Land and Building Tax
Since 2020, Thailand levies an annual property tax. Rates are moderate: For residential property (primary residence), the first 50 million THB is tax-free, with rates of 0.02%–0.1% above that. For non-primary residence (e.g., holiday home, rental), rates of 0.02%–0.1% apply from the first baht. Vacant land is taxed at 0.3%–0.7%, with a 0.3% surcharge every three years for non-use.
Practical Example
Assume you buy a condo in Hua Hin for 5 million THB (appraised value: 4 million THB) from a private seller who has owned it for 3 years:
- •Transfer Fee (2% of 4M): 80,000 THB (50/50 = 40,000 each)
- •SBT (3.3% of 5M): 165,000 THB (seller, as < 5 years)
- •Withholding Tax: approx. 40,000–80,000 THB (seller, progressive)
- •Stamp Duty: waived (as SBT applies)
Your cost as buyer: approx. 40,000 THB (0.8% of purchase price). Total transaction costs: approx. 285,000–325,000 THB (5.7–6.5%).
Note: This article has been carefully researched and is based on current legislation (as of 2025). It does not replace individual legal advice. We strongly recommend consulting a qualified lawyer or tax advisor before any purchase, sale or investment.