Transfer of Property

Property Purchase and Transfer

When you purchase real property, you pay to take ownership title of the property you are buying. While there are several preliminary steps such as due diligence, title search, and contract review, the most essential step is the payment process and the transfer of property from the owner or developer to you. Often the contract for the purchase of the property will specify how the property is to be transferred. The property transfer will generally take place at the land office where the ownership of the property will be registered upon the conclusion of the transaction.

If you buy a property from a developer before development is completed(off-plan), the transfer of property takes place upon the completion of your property. If the property had already been built, the transfer of property takes place once certain installment payments have been completed in accordance with the signed contract. The remaining or final balance of the purchase price is usually paid on the day or along with the transfer registration at the land office.

In any case that the buyer or the seller would not be able to personally appear in presence at the Land Office to make the transfer of property ownership, a buyer or a seller of real property may authorize another person to handle the transaction on their behalf through a Power of Attorney using the correct form provided by the Land Office. This is an official form referred to as Tor Dor 21 for land and house and Or Chor 21 for a condominium (POA).

Taxes and Transfer Fees

In addition to the balance of the purchase price, you may also be liable to pay certain taxes and transfer fees.

Generally, when purchased from a developer, the Buyer will be liable for the Transfer fee, and the remaining types of taxes are borne by the Seller. However, it can always be negotiated between the parties of how the total amount of payable tax and duty is rationed among them as the law does not provide exact liability of the fee and taxes.

• Transfer taxes - The land department levies 2% of the property value based on the value registered.
• Withholding tax - 1% of the appraised property value will be levied (explained below).
• Special business tax - Is only payable if the property is sold within its first 5 years of ownership and is levied at the rate of 3.3% of the appraised value. Otherwise, stamp duty will be assessed instead.
• Stamp duty - A total of 0.5% of the registered value will be taxed. A stamp duty need not be paid if specific business tax is applicable.
• The tax liability should be negotiated and written into the sales contract before visiting the land department for registration.

Income Tax (Withholding Tax) from the Sale

Income from the sale of property is subject to Thai income taxation. The land department will withhold a prepayment of the property seller's gain from the transfer of property. The rates differ between natural and juristic persons when:

• the property seller is a company, the withholding tax is 1% of the sales price or 1% of the assessed value, whichever is higher.
• the property seller is an individual, the withholding tax is calculated on a progressive income tax scale.

Required Documents for Transfer of Property Ownership

The following documents are to be presented and submitted to the Land Office during the transfer of property ownership:

Condominium

1. Original Title Deed of the property (Chanote)
2. Certification of No-Debt from Condominium Juristic person/Foreign Quota in case of foreign buyer
3. Copies of passports or identification documents of the Seller and the Buyer
4. Copies of immigration stamp in the passport of the foreign party
5. Foreign Exchange Transaction Certificate (Thor Thor 3) for the foreign party. This is a document issued by banks upon receipt of a foreign currency into the foreigner's bank account in Thailand. The remittance of funds from overseas to be used for the purchase of a condominium unit in Thailand is a government regulation that must be complied with. Non-compliance with this requirement will hinder the registration of the property under the buyer’s name.
6. Company Affidavit within the last 3 months

Land and House

1. Title Deed of the Property (Chanote), House ownership document in case the Land and the house owner are different parties
2. Copies of the passports or identification documents of the Seller and the Buyer
3. Copies of immigration stamp in the passport of the foreign party
4. Company Affidavit within the last 3 months

Our Legal Services and Conveyancing

Siam Legal International provides a number of services that can help make the transfer of property easier for you.

• If it is not possible for you to go to the land office in person, we can prepare a Power of Attorney that will allow you to appoint our firm or our Thai property lawyer to conduct the transfer at the land office on your behalf.
• If you prefer to go to the land office yourself, one of our staff can accompany you to make sure your rights are protected.
• Before the official transfer of property at the land department, we will inform you of the documents needed and the approximate amount of money you will need for the taxes and administrative fees that must be paid.