Determining withholding tax on selling a condominium.
Selling a real estate property such as condominium makes the individual seller liable to pay personal income tax. This tax applies to the gain the seller made at the time of the sale at the Land Department, but since there are multiple variables in the equation (lump sum deductions and years of ownership), the calculation can be quite confusing without a proper knowledge of the procedure.
Calculation of the withholding tax in three steps
1. Land Department first determines the seller’s net yearly assessable income
Net Assessable Income per year = (Assessed Value – Lump Sum Expenses per year of ownership)/Years of Ownership
The Lump Sum Expenses deduction ranges from 50% to 92%, depending on the number of years of ownership.
|Number of years of ownership||Deduction %|
|< 1 year||92%|
|> 2 years||84%|
|> 3 years||77%|
|> 4 years||71%|
|> 5 years||65%|
|> 6 years||60%|
|> 7 years||55%|
|> 8 years||50%|
2. Determining the yearly personal income tax due by the seller as a result of the sale
This step is done based on Land Department Progressive Tax Rates (not on Revenue Department Rates):
|Yearly Net Assesable Income||Tax Rate|
|0 – THB 100,000||5%|
|101,000 0- 500,000 THB||10%|
|500,001 – 1,000,000 THB||20%|
|1,000,001 – 4,000,000 THB||30%|