Selling condo and buying house - tax implications?

[Clivep]

I'm selling my condo in Bangkok with a view to buying a house in Hua Hin area.

My understanding is that I am liable for tax on the sale of the condo, which is assessed on the full sale amount (not just the capital gain) after an allowance of 50% (10 years ownership).

i.e. Sale price 11,500,000
Deduction 5,750,000
Balance = 5,750,000
Divided by the 10 years of possession
Balance = 575,000


Therefore taxation at existing rates:-

1 to 150,000 = exempt
150,001 - 500,000 = 10% (35,000)
500,001 - 575,000 = 20% (15,000)
Total = 50,000

Multiply by 10 years of possession = 500,000Baht

Or at the proposed new tax rates:-

1 to 150,000 = exempt
150,001 - 300,000 = 5% (7,500)
300,001 - 500,000 = 10% (20,000)
500,001 - 575,000 = 15% (11,250)
Total = 38,750

Multiply by 10 years of possession = 387,500Baht


Now the questions!

First, is my understanding (and maths!) above correct?

I heard somewhere that if the condo being sold has been your only residence, and the funds are being used to purchase another property in Thailand for your own use, the proceeds may be tax exempt. Can anybody confirm or shed any further light on this?

Furthermore, if there is some provision for this, does it apply to purchases of leaseholds on land (as in the popular 30yr + options route)?

[jingjoe]

In thailand do you pay a capital gains tax on any profits on the sale of a house.?
If house is owned for 7 years and appreciated in value from purchase price is it subject to tax
eg house bought for 1million baht sold for 1.800 000bht gain of 800 000 is this subject to a tax?
if so how is it calculated.
House is not in company name so not subject to business tax '

[Clivep]

Hi Jingjoe,

My understanding is you will be assessed on the full sale amount, or the Government Assessed Value of the property, not just the capital gain. (for simplicity below I'll just refer to 'Sale Price'.)

There is a scale of allowances from 95% to 50% of the sale price, depending on the number of years the property has been owned, which can be deducted from the sale price, with the balance obtained then divided by the number of years of ownership to obtain an assessable amount. This is then assessed at the prevailing Income Tax rates (hopefully the new rates which should be applicable from 1/1/13, but which as you probably know are awaiting ratification), with the annual liability obtained then multiplied by the number of years of ownership to obtain your full liability on the sale. This is then payable at the local Land Office on the date of the transfer and before the Deeds are released to the Purchaser.

I'm also pretty sure that Business Tax will apply if the house is sold within 3 years irrespective of wether a company is involved or not.

I've set out a example in my earlier post viewtopic.php?f=20&t=24597 which I've also copied below for convenience.

As I've said that's my understanding, but I am also looking for confirmation and have also heard that there may be an exemption if the property was your only home AND the funds from the sale will be used to buy another property in Thailand. I'm still trying to get a bit more clarity on that bit.

Hopefully some property professionals reading this will be able to cast further light - if not, I hope this has been of some help!

I'm selling my condo in Bangkok with a view to buying a house in Hua Hin area.

My understanding is that I am liable for tax on the sale of the condo, which is assessed on the full sale amount (not just the capital gain) after an allowance of 50% (10 years ownership).

i.e. Sale price 11,500,000
Deduction 5,750,000
Balance = 5,750,000
Divided by the 10 years of possession
Balance = 575,000


Therefore taxation at existing rates:-

1 to 150,000 = exempt
150,001 - 500,000 = 10% (35,000)
500,001 - 575,000 = 20% (15,000)
Total = 50,000

Multiply by 10 years of possession = 500,000Baht

Or at the proposed new tax rates:-

1 to 150,000 = exempt
150,001 - 300,000 = 5% (7,500)
300,001 - 500,000 = 10% (20,000)
500,001 - 575,000 = 15% (11,250)
Total = 38,750

Multiply by 10 years of possession = 387,500Baht


Now the questions!

First, is my understanding (and maths!) above correct?

I heard somewhere that if the condo being sold has been your only residence, and the funds are being used to purchase another property in Thailand for your own use, the proceeds may be tax exempt. Can anybody confirm or shed any further light on this?

Furthermore, if there is some provision for this, does it apply to purchases of leaseholds on land (as in the popular 30yr + options route)?

[Clivep]

JingJoe,

Just had a quick look at the figures you quoted - 7 years, 1.8MBaht

Looks like you would be below the tax threshold anyway!

Happy days!

[Clivep]

Dear Mr. Moderator,

Not sure why JingJoe's thread has been incorporated into mine!

Actually 2 different subjects - although similar, granted.

Perhaps now a more encompassing title might be 'Selling property - tax liability'.

Respectfully; might it be possible to change it thus?

[jingjoe]

clivep where are these figures you are stating..can i have a link..cheers

[Clivep]

JingJoe,

Sorry, just noticed the 0 - 150,000 exemption does not apply on property sales, so I guess you'll have the 5% to contend with after all!

As a general rule of thumb when selling a property here figure on 10% of the sales price in fees and taxes as a ball park figure and you'll not be far wrong. (12 - 15% if property held for less than 5 years).

http://www.mazars.co.th/Home/News/Our-p ... n-Thailand

Lays it all out pretty succinctly, but their tax rates are a bit out of date - latest rates on the Thai Government Tax website - you can get it in English.

[Clivep]

Not many Realtors or Developers tell you that when you're buying eh!

[Clivep]

I'm also pretty sure that Business Tax will apply if the house is sold within 3 years irrespective of wether a company is involved or not.

Actually it's 5 years - and I'm not sure how a castrated lamb got in there! 'whether'!

'2 fink me english were gud b4'

[Skmly]

Can anyone advise on the current tax implications of selling a condo. % wise of property sale, and how is it checked?

Many thanks