This is a guide on determining withholding tax on selling a condominium in Thailand.
Selling a real estate property, such as a condominium in Thailand, makes the individual seller liable to pay personal income tax. Withholding tax applies to the gain the seller made at the time of the sale at the Department of Lands.
Since there are multiple variables in the equation (lump sum deductions and years of ownership), the calculation can be confusing without proper knowledge of the procedure.
Let’s see how it is calculated.
Withholding tax calculation in three steps
Step 1: The Land Department determines the seller’s net yearly assessable income
The formula for calculating net assessable income per year is (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.
| Years of ownership | Deduction (%) |
| One year | 92% |
| Two years | 84% |
| Three years | 77% |
| Four years | 71% |
| Five years | 65% |
| Six years | 60% |
| Seven years | 55% |
| Eight years or more | 50% |
For example, the assessed value is THB 7,995,000 and the number of years of ownership is seven years.
The calculation of the yearly net assessable income would be:
THB 7,995,000 – 55% (THB 4,397,250) = THB 3,597,750
THB 3,597,750 / 7 years = THB 513,964.30
Yearly net assessable income = THB 513,964.30
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Step 2: Determining the yearly personal income tax due by the seller as a result of the sale
This step is based on the Department of Land progressive tax rates not the Revenue Department rates.
| Yearly net assessable income (THB) | Tax rate |
| 0 – 300,000 | 5% |
| 300,001 – 500,000 | 10% |
| 500,001 – 750,000 | 15% |
| 750,001 – 1 million | 20% |
| 1,000,001 – 2 million | 25% |
| 2,00,001 – 5 million | 30% |
| More than 5,000,001 | 35% |
The yearly net assessable income is THB 513,964.30; therefore, the tax rate will be 15%.
15% income tax of THB 513,964.30 is THB 77,094.645.
Step 3: Overall personal income tax due by the seller on the period of ownership
This step only takes the amount calculated in the previous step and multiply it by the number of years of ownership.
77,094.645 (income tax) x 7 (years of ownership) = THB 539,662.515
Therefore, the withholding tax to be paid on selling a condominium will be THB 539,662.515.
The final amount is the amount to be paid by the seller at the Department of Lands. Depending on the seller, the amount due can become either a final tax payment or count against the personal income tax liability of the seller.
Conclusion
Determining withholding tax on selling a condominium may be complicated when the seller is an individual. Discounts are provided and are based on the number of years the seller has lived in the property, the longer the seller owned the property, the higher the discount.
If you need guidance on calculating the withholding tax on selling a condominium, you can always get in touch with Acclime’s services.
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