Fees to be aware of when purchasing property

When investing in property in Thailand, there are a few costs that the buyer and seller will incur that need to be considered as part of the transaction.

1. Transfer fee.
The transfer fee is two percent of the assessed value of the property. The assessed value of the property is the amount determined by the the Treasury Department compiled using data from the Land Department. Generally the transfer is split between the purchaser and seller, but is sometimes used as negotiating tool as part of the sale.

2. Stamp duty or specific business tax.
The sellers incurs either stamp duty at 0.5 percent or specific business tax at 3.3 percent. The latter is used for owners who have held the property for less than five years as as way to deter speculative investors in Thailand’s property market.

3. Withholding tax.
This is a progressive tax paid by the seller of the property.

4. Sinking fund.
This is a lump sum payment for all brand new condominiums paid by the first owner of the property. It is held in reserve and used in the case of major refurbishment works for the building.

5. Common area fee.
Calculated depending on the size of the property, the common area fee is paid by the owner usually per annum. The common area fee pays for the daily upkeep of the building and its facilities including cleaning and maintenance as allocated by the management company.

6. Utility meters.
Upon successful transfer of ownership of a property, the purchaser is required to pay the registration of the electricity meter for a brand new property and the transfer of ownership of the electricity meter for resale properties.