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The Department of Lands (hereafter “DOL”), under the responsibility of the Ministry of Interior, is the competent administrative body for every real es­tate transaction. DOL can be found in every province of Thailand. Any transaction shall be made at the nearest office where the land is located

I. Scope of the Transaction

The DOL is the only competent agency for the following transactions:

1. Registration of land ownership
2. Registration of condominium ownership
3. Registration of juristic act on
   1. Sale and purchase of lands and buildings
   2. Transfer of lands and buildings
   3. Inheritance
   4. Mortgage
   5. Lease
4. Land Survey

II. Foreigner’s Rights

1. Land

As a general rule, foreigners are prohibited from owning land in Thailand. If a foreigner acquires land ownership—whether through unlawful acquisition, a subsequent change of nationality, or inheritance—the land must be disposed of within one year.

Ownership of land by a foreigner is only permitted in exceptional circumstances. One such exception requires special approval from the Minister of Interior pursuant to Section 86 of the Land Code; however, this approval is granted only rarely and is of limited practical relevance.

Another exception allows land ownership for residential purposes through a qualifying investment in Thailand. In this case, the foreigner must invest at least THB 40,000,000

(approximately EUR 1,000,000), and the investment must be maintained continuously for a period of five years.

The residence area must be located in Bang­kok, Pattaya or in a municipality or other areas specified for residential purposes under the law of Town and Country Planning. The investment can be made through the following means:

1. Purchase of bond issued by the Thai government, Bank of Thailand or state enterprises or bond as guarantee by the Ministry of Finance on interest and principal
2. Investment in a mutual fund for immovable property
3. Investment in shares of a com­pany promoted by the Board of Investment
4. Investment in a business pro­moted by the Board of Investment

        2. Condominiums

Under Thai law, foreigners are allowed to purchase and fully own condominium units (freehold) in their own name under the Condominium Act B.E. 2522 (1979), provided that foreign ownership in the condominium project does not exceed 49% of the total sellable floor area. Foreigners who are not permanent residents under immigration regulations, must remit the purchase funds from abroad in foreign currency and properly document the remittance with a Foreign Exchange Transaction (FET) Form. Once registered, the foreign buyer enjoys the same ownership rights as a Thai national with respect to the condominium unit, including the rights to sell, lease, and inherit the property.

III. Fee

1.Government Fee
The registration of the following transactions is subject to 2% of the appraised value (“AV”: value ap­praised by the DOL):

• Sale
• Trade
• Gift
• Transfer for debt/share payment, court order
• Inheritance

The registration that is subject to 1 % of the AV is as follows:

• Lease
• Inheritance of leasing right
• Servitudes
• Usufruct
• Superficies
• Habitation right
• Any other encumbrances
• Mortgage

 Withholding Tax

a) Natural Person
The calculation of the withholding tax to be withheld from the payment and due by a natural person can be divided in three different steps.
First: To calculate the yearly net assessable income derived from the sale of property by using the following formula:

 (AV– lump-sum deduction)/years of ownership

The lump-sum deduction depends on the years of ownership as follows:

Year	Deductible rate
1	92%
2	84%
3	77%
4	71%
5	65%
6	60%
7	55%
More than 8 years	50%

Nevertheless, in case of inheritance or gift, the transferor may deduct the expenses in the flat amount of 50%.

Second: To determine the rate of the yearly tax to be withheld as shown in the table below:

Income (THB)	Rate
0-300,000	5%
300,001-500,000	10%
500,001-750,000	15%
750,001-1,000,000	20%
1,000,001-2,000,000	25%
2,000,001-5,000,000	30%
More than 5,000,000	35%

Third: To calculate the tax to be withheld for the whole period of ownership by multiplying the yearly tax to be withheld by the number of years of ownership.

Example:

The transferor of the land (which was not acquired by inheritance or gift) held this land for 5 years and agrees to sell the land in the amount of THB 2,800,000. The AV is THB 2,500,000.

Calculation:

1. The yearly net assessable income is

(2,500,000-1,625,000)/5 = 175,000

(2,500,000×65%)

2. Income tax per year is THB 8,750

(175,000×5%)

3.The total tax to be withheld is THB 43,750 (8,750×5)

 b) Juristic entity

The withholding tax will be calculated at the rate of 1% of the AV or the actual selling price, whichever is higher.

Note: The capital gain (if any) incurred from the transfer of the land is subject to the corporate income tax at the rate of 20 %.

c) Withholding tax exemption

The following types of registration are ex­empted from the withholding tax:

1. Lease, amendment of lease agree­ment which increases the lease value
2. Transfer of the inheritance in respect of the leasing right
3. Servitudes
4. Usufruct
5. Superficies
6. Habitation right
7. Any other encumbrance
8. Mortgage

         3. Stamp Duty

Any registration regarding immovable prop­erty is subject to stamp duty amounting to 0.5% of the AV or of the actual selling price, whichever is higher.

Nevertheless, in case the transferor is subject to any spe­cific business tax, the stamp duty shall not apply. Please note that the registration regarding the mortgage is also not subject to stamp duty.

4. Specific Business Tax

The Specific Business Tax (SBT) is collected at the rate of 3.3% of the AV or the actual selling price, whichever is higher, for the sale of the land which includes trading, gift, hire-purchase or distribution.

The SBT is due in the following cases:

1. immovable property sold by the authorised persons of the land ar­rangement laws
2. units sold by the operator of a registered condominium
3. sale of buildings which are built to be sold, including sale of land where the said buildings are located
4. sale of land which is not men­tioned in a), b) or c) only in case of sale in part for the purpose of build­ing public utility
5. sale of immovable property that the seller has for the business operation pursuant to Article 77/1 of the Reve­nue Code
6. sale of immovable property that is not mentioned in a), b), c), d) or e), made within 5 years after acquisi­tion.

The sale is not subject to SBT in the following cases:

1. sale of immovable property more than 5 years after the acqui­sition
2. sale or expropriation under the expro­priation laws
3. sale of immovable property ac­quired by inheritance
4. sale of immovable property which is a residence of the seller whose name has been registered in the house register of said residence for at least 1 year. In case the acquisition of the land and the building is not made at the same time, the seller must possess the land or the building for at least 5 years, which­ever comes later;
5. transfer of ownership or possession right to legitimate child, excluding adopted child
6. transfer of ownership or possession right by inheritance to legitimate heir
7. transfer of ownership or possession right to government authority