Investment

As an owner, you have the legal right to sell or rent out a property. However, there are requirements and costs associated with it. Furthermore, by law, you will need a Credit Advise (receipt) as well as certification from the bank to transfer money back to your home country.

Costs associated when reselling

• Lease Hold: Lease Registration Fee
  There are two options for a lease term, both of which are for your protection as they ensure that your contract is enforceable in a court of law. For a short-term lease of not more than three years, a lease registration is not required for it to be enforceable in a court of law. However, if you plan a lease term of more than three years or up to 30 years, you must register with the Land Office to ensure enforceability in court. Presently, the Lease Registration Fee is at 1.1% of the total rental fee for the entire lease term. Usually, it is paid equally by the lessor and lessee.
• Free Hold: Transfer Fee
  For the buyer of a freehold property, a transfer fee is required. This is calculated at 2% of the property’s official appraised value. The transfer fee is payable by either the buyer or the seller, depending on the agreement between the two parties as stated in the Sale and Purchase agreement. Once the ownership is transferred, the transfer fee must be paid to the Department of Land on the same day.
• Stamp Duty
  Stamp Duty is applicable where specific business tax (SBT) is not applicable and in the case where an individual owns the property for five years or more. The rate is 0.5%.
• Specific Business Tax (SBT)
  If a company or individual has held a property for less than a five year period, and decide to sell the property, SBT is required. The tax rate is currently at 3.3% (which includes municipal tax) calculated from either the sales price or the official appraised value of the property, whichever is higher.
• Withholding Tax (WHT)
  Where the seller is a company, the WHT is calculated at 1% of the sales price or the official appraised value, whichever is higher. Under the revenue code of Thailand, an individual who makes money from selling a property, whether it is land, houses or condominiums, must also pay WHT. This tax is calculated at a progressive rate based on the official appraised value of the property.

Table A: Summary of tax obligations for a seller (both an individual and a company) and a buyer

Example of how to calculate WHT for an individual seller

A. Personal Income Tax Table (For calculating WHT When Selling Property)

B. Deductible Expense When Selling Property

C. Related Fee and Tax When Buying / Selling Property

• • The seller sells a condominium unit within 3 years from the acquisition date.
• • The condominium unit has an appraised value in amount of 3,000,000 Baht.

• 1. 1) Deduction of expenses based on the number of years in possession
     77% of 3,000,000 = 2,310,000
     3,000,000 – 2,310,000 = 690,000
  2. 2) Divided by the number of years in possession
     690,000 / 3 = 230,000
  3. 3) Calculation of tax payable based on the personal rate of income tax
     5% of 230,000 = 11,500
  4. 4) Multiple by the number of years in possession
     11,500 x 3 = 34,500

If you have further questions, please consult with your local tax consultant.

Costs associated with renting property

• Commission for renting out properties
  It is normal that the standard commission rate for the agent is equal to one month’s rent. This also tends to apply to agreement renewals. While this is generally the case, you will need to confirm with your preferred real estate agent. It should be noted, however, that an agent is not legally required, meaning that an owner can choose to rent out the property directly without having the bear the cost of commission.

There are four ongoing costs which you should be aware of when purchasing a property in Thailand.

First, is the “sinking fund”. This is a one-time payment to the juristic officer who will keep this in a fund for major renovations to the property. An example of this would be repainting the building or replacing the elevators cars.

There is also what is known as the “common fee”, which is typically paid annually for operating costs such as security, maid service, in-house staff and gardeners. Thirdly there is a charge for the installation, insurance, and service charge of electricity meters.

Lastly, there are miscellaneous administrative expenses such as the transfer of ownership at a local district land office.

Aestate provides a seamless property investment experience. Our extensive range of integrated services is designed to enhance and simplify the lives of our homeowners.

RESALE & LEASING SERVICES

With 20 years of experience in retail and hospitality, we are well-established in the domestic market with a track record in leasing and property management services. With a wide array of professional service options and a dedicated team, we are always ready to assess customer needs and deliver hassle-free property management solutions.

AESTATE HOME SERVICE APPLICATION

Home Service is an all-inclusive smart application that lets you manage every aspect of your Aestate property – from before the ownership is transferred, through to moving in. With Home Service, you can follow news, receive updates on completion times, communicate with building management, report problems requiring repair, and receive status reports on work progress. Our convenient app provides you with a direct line to your building management team, who are on hand to assist you with both day-to-day issues and long-term solutions for your rental/resale requirements.

PROPERTY CARE MANAGEMENT PROGRAMME

For investors residing outside Thailand, having a reliable representative for hassle-free property care and management is crucial. Our customized services assist property investors by handling essential tasks such as evaluating maintenance issues, negotiating major repairs, coordinating with tenants to address any concerns, organizing monthly rental payments, conducting semi-annual reports on furniture and appliance conditions, and consolidating and invoicing utility expenses, if applicable.

HOME CARE SERVICE

Our service is tailored to help you maintain every aspect of your property. Simply submit a request through the Aestate inquiry inbox, and our professional team will be ready to assist you.

In conclusion, owning property in Thailand is straightforward, but like anything else, understanding the necessary processes and procedures is essential. The best investments offer the best returns, and the best consultations and representation come from a well-recognized developer with deep market roots and expertise in owning properties in Thailand. We are here to assist you in every possible way.