Charges and fees in Thailand

In Thailand, the fees and charges associated with a property purchase are generally lower than most European countries, but it’s important to be aware of them to get an idea of the real costs of your acquisition.

Acquisition costs

Registration fees

At the time of purchase, your property will be registered with the Land Department. To do this, you will have to pay a transfer fee. The amount depends on the type of acquisition (Freehold or Leasehold):

• Freehold: these fees vary between 5% and 7% of the value of the property, depending on certain criteria such as age and length of ownership.
• Leasehold : the fee is 1.1% of the value declared in the lease contract.

No notary fees, but can be accompanied by a lawyer

The profession of notary as we know it in France as a regulated profession does not exist in Thailand: there are therefore no notary fees to pay for the buyer: registrations are carried out at the Land Department directly in the presence of the buyer and seller, and/or their representative.

However, it is possible to call on the services of a lawyer for legal guidance and advice. In this case, you should expect to pay between €2,000 and €5,000, depending on the firm and the type of support provided.

Miscellaneous expenses

Maintenance costs

These are the charges you owe for maintaining the common areas. How they work depends on the type of property: condominium apartment or house.

In the case of a condominium, co-ownership is highly regulated. Section 18 of the Condominium Act stipulates that all co-owners of the building must jointly pay the costs of maintaining and operating the common areas, in proportion to the surface area they own. Maintenance costs are expressed as an amount per m², and can vary from 25 to 60 THB/m², depending on the age and equipment of the building.

For a villa on a housing estate, the framework is a little less regulated, even if the overall operation remains the same. The amount of the charges can be calculated using a combination of built area and garden area, or sometimes be determined by the type of villa.

What these charges include can vary: some separate common areas from private gardens, leaving each owner free to maintain their own garden and swimming pool. Others include this maintenance in their charges to ensure that every garden and/or pool is maintained to the same standard.

NOTE: When you invest in a new-build program with integrated rental management, some developers cover these costs for the duration of your contract. You are therefore not liable for any maintenance costs during this period.

The Sinking Fund

The “Sinking Fund” is a sinking fund payable once on delivery, which you owe when you buy into a new Condominium. This fund generally represents 1 year’s worth of charges. It belongs to the co-ownership and will be used for unforeseen expenses outside the scope of routine building maintenance, such as major improvements/repairs to the common areas.

No agency fees for the buyer

In Thailand, the real estate agency’s commission is paid by the seller, not the buyer: it has no impact on the sale price of the property. Whether you buy through an estate agent or directly from the developer or seller, the selling prices will be the same.

Taxation

Withholding tax

The Withholding Tax is an “advance income tax” that applies to any income you generate in Thailand (whether from a professional activity or a rental property investment, for example). So if you’re buying to generate rental income, this will be your main tax liability.

For rental income, the Withholding Tax rate is 5% if you are resident in Thailand (=if you have a Tax ID) or 15% if you are a non-resident. In most cases, the latter rate will apply.

Withholding tax is in fact an advance payment of income tax, which means that if the amount of withholding tax paid is higher than the tax actually due at the end of the year, you can claim a refund of the overpayment. For this, it is advisable to contact specialized experts who can guide you through the process.

Inheritance tax

In Thailand, there is no inheritance tax below 100 million THB (2.5 million Euros).

Above THB 100 million, they are 5 to 10%.

Am I taxed in France on my assets in Thailand?

Thailand and France signed a double taxation treaty in 1974, stipulating that income from real estate is taxable only in the contracting state where the property is located. Your Thai rental income will therefore be taxed in Thailand, not in France.

However, as a French citizen, you are legally obliged to declare your Thai income as “foreign source income”, and this will impact your French tax scale.

For any further information, particularly on taxation, we recommend that you contact experts who can advise you on your personal situation. Osiris Investissements can help you buy property in Thailand, whether you want to settle in the tropics or invest in rental property. Contact us!