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BANGKOK 19 July 2019 04:17
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Andrew Kiong

Is there Property Capital Gains Tax for Foreigner ?

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Hi,

Property Capital Gains Tax question

I'm a foreigner and I bought the Freehold Delmare Pattaya Condo from the developer and received the keys May 2018.

I would like to sell it now. 

I heard that there is a capital gains tax if I sell my condo within less than 5 years of ownership. Is this true ?

If so, then I don't mind sell it at buying price.

Appreciate your valuable advice. Thank you !

Best Regards

Edited by Andrew Kiong
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It isnt really a capital gains tax as such; it is more of a property ownership tax. But a rose by any other name .....

The amount of the tax decreases after 5 years of ownership, and the way it is calculated alters, but at the end of the day it probably wont make a huge difference.

There are also other charges and fees.

The total cost of taxes and fees is unlikely to be more than 6% in normal circumstances and I think that currently one element of the cost has been reduced so it may come to quite a bit less than that.

 

The Land Office will tell you exactly how much it will cost you if you tell them all the details. Most estate agents should know also.

 

3 hours ago, Andrew Kiong said:

If so, then I don't mind sell it at buying price.

Do you really think that you could get more than buying price for it?

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It is not in any sense a Capital Gains tax, as any gain or loss you make does not affect it.

 

It is more like a property tax but one that is paid only when a change is made at the Land Office to the ownership of the property.

 

And it is the local Land Office who decide exactly how much you must pay them, it depends on factors such as their valuation of the property, the actual price being paid for the property and how long you have owned it.  But it is not influenced (directly) by any profit or loss you make on the sale.

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Theres 2 things.. First it that the land office collect a transaction tax / stamp duty.. everyone pays this one way or another (buyer / seller / split). 

 

The second is that the capital gains is technically income in the year the property is sold.. Few / no one pays this but then its harder to move your money out the country. 

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On 2/14/2019 at 5:02 AM, Andrew Kiong said:

I heard that there is a capital gains tax if I sell my condo within less than 5 years of ownership. Is this true ?

Partly, there is a property sales tax, depending of length of ownership.

If ownership is under 5 years you'll pay extra 3.3% Business Tax.

Normally seller pays taxes, and buyer pays transfer fees, when selling property.

Your tax can be calculated here.

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There will be no capital gain because you won't sell it for more than you bought it for. Land transfer tax yes. capital gain, not applicable. 

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On 2/13/2019 at 6:02 PM, Andrew Kiong said:

If so, then I don't mind sell it at buying price.

This is exactly how I bought my condo - my friend (seller) wanted no Tax on the sale as he and his wife were cutting their losses in Thailand and leaving for good.  I bought for what he paid for, nothing extra.

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2 hours ago, TunnelRat69 said:

This is exactly how I bought my condo - my friend (seller) wanted no Tax on the sale as he and his wife were cutting their losses in Thailand and leaving for good.  I bought for what he paid for, nothing extra.

You still pay tax/charges on the sale regardless of whether you made a profit or not. Also the Land Office uses the higher of their own valuation or the declared price.

 

I dont really understand how wanting to leave the country and not wanting to pay tax could be real reasons for reducing the price of a condo. To me the only real reason would be to get a sale.

 

In parts of Thailand it is quite common for condos to be sold for what they were purchased for, or less. The market here is not fluid or transparent at all.

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