Fees and Taxes When Buying a Phuket Villa

What does the Land Office charge when a villa is sold?

Four lines, all of them set by the state. The transfer fee is 2% of the appraised value of the property. Specific business tax is 3.3%, calculated on the higher of the appraised value and the sale price. Stamp duty is charged on the transfer at 0.5%. Withholding tax for an individual seller is calculated from the holding period and the income from the sale. All four rates are listed in the Department of Lands schedule of fees, taxes and duties.

Specific business tax depends on how long the seller has owned the property. Royal Decree No. 342, published in English by the Revenue Department, applies it to a sale made within five years of acquisition, and lists exceptions such as property acquired by inheritance and a seller's main residence registered in the house registration for at least a year.

The appraised value is the Land Department's own figure for the plot and the building, and it is usually not the same number as the price in the contract. That is why two buyers paying the same price for two villas can see different charges at the counter.

While the paperwork runs you may want a house nearby: send the dates, guests and bedrooms in the chat, and we answer with villas we have walked through, the terms on each and what we would change about them.

What does it cost to register a leasehold in Phuket?

A registration fee of 1% of the total rent for the whole lease term, plus stamp duty of 0.1%. The 1% comes from the Department of Lands schedule; the 0.1% stamp duty is listed by LAFS Legal and by ThaiLawOnline, who put the total at 1.1% of the rent for the term.

The base is the rent for all the years, not for one. A 30-year lease paid up front or in instalments is charged on the full sum, which makes it a large line in the budget of a leasehold villa and an easy one to miss if you think of the lease in monthly figures.

The same charges come back with a renewal. Thailand Law Online describes a renewed lease being processed as a fresh registration with a commercially reasonable rent stated and the usual fee and stamp duty paid again; how renewal works is on our page about a Phuket lease expiring. LAFS Legal adds that neither withholding tax nor specific business tax applies to a lease.

Who pays which charge, the buyer or the seller?

Whoever the contract names. The Land Office needs the charges paid before it registers the transfer or the lease, and the sale contract sets out which side pays each one; a lawyer reads that clause before the deposit.

Taxes that follow the seller's income, such as withholding tax and specific business tax, are calculated on the seller's position, so the contract says plainly whether the seller bears them or the price already includes them.

Reduced fees are announced by the government from time to time, each with its own conditions on the buyer, the property and the price. A lawyer confirms the rate in force on the day of registration rather than the one quoted in an old listing.

Worth knowingAsk for the appraised value and the charges in writing before you sign. The price in the contract and the value the Land Office uses are two different numbers.

What does owning a villa in Phuket cost every year?

The fixed annual charge is the land and building tax. It is collected once a year by the local administration where the property sits, under the Land and Building Tax Act, and foreign owners pay it on the same basis as Thai owners, according to Anglo Siam Law and Forbes & Partners. The tax falls on the owner of the land or building, and a lease contract can pass it to the tenant.

The rest of the budget is the house itself, and this we see every season from the rental side. A private pool needs a technician on a schedule and chemicals, and its pump runs daily and shows on the electricity bill. The garden needs a gardener. Air conditioners need a service. In a gated estate part of the money goes on security, shared roads and their upkeep.

Electricity deserves its own line. A villa with a pool and several air conditioners is billed by the meter, and our page on villa electricity bills explains how the bill is read; the page on pool and garden care shows who usually pays for what when the same house is rented.

• Land and building tax — once a year, to the local administration
• Pool service and chemicals — on a schedule, more visits in the rainy months
• Garden — a gardener's regular visits
• Electricity — by the meter; pool pump and air conditioning are the big lines
• Air-conditioner service — regular cleaning keeps the bill and the repairs down
• Estate upkeep — security, shared roads and common areas in a gated estate

Where do these rates come from?

The sale and lease charges come from the Department of Lands schedule of registration fees, taxes and duties, checked against LAFS Legal, Juslaws & Consult and ThaiLawOnline; the five-year rule for specific business tax comes from the Revenue Department. The legal side of each route is on can foreigners buy a villa in Phuket.

The figures here are general information, not legal or tax advice; for your own purchase a licensed lawyer in Thailand confirms each charge in advance.