Cases that involve dealings with Thai government agencies require a quality legal representation. Our highly-qualified legal professionals are here to assist you with all your Thailand property requirements. Our professional lawyers will guide you to the appropriate local land department and represent you throughout the execution of your drafting, conveyance or registration.
Property Registration Services
Property transfer and registration, especially in th case of foreigners, is a difficult process to handle due to their complicated rules. For instance, if any foreign owner wants to sell his condominium to his friend who is also a foreigner, the execution of the deed of donation for transferring the ownership becomes complicated. According to the Thai law, there is no provision for automatic transfer of ownership, there must be sale.
Subsequently, one must also fulfill the requirement of following proofs
The transfer agreement is considered as legit proof as it shows who has paid the taxes and government fees. If one doesn't find such clause when purchasing a condo, both the owner and the buyer will be equally liable for the payment that is to be made. In addition, the onwer also needs to pay the income tax, specific business tax and stamp duty.
A transfer tax will be charged when transferring a condominium at the rate of 2% of the government appraised value. If the owner of the condo resided in his condo for less than five years, the owner will have to pay for specific business tax at a rate of 3.3% of the government appraised value or the actual selling price of the condo, whichever is higher. If, on the other hand, the owner resided in the condo for more than five years, then the owner need not pay the business tax, instead he has to pay for a stamp duty at the rate of 0.5% of the appraisal or sale value, whichever is higher.
In addition, if the owner is a corporation, a simple withholding tax of 1% of the government appraised value is applicable when transferring the condo. If, on the other hand, the seller is an individual, then the withholding tax charged at the time of transfer will become complex. Discounts on the taxes depend on how long the owner resided in the property and then the tax is applicable at an increasing rate based on the sale price or the government assessed price, whichever is higher.
A land conveyance involves both the seller and the buyer filing registration of the transfer of ownership at the Land Department. The transfer of ownership includes both tax and government fees. At the time of ownership transfer, a transfer fee which is a government fee, of 2% of the appraised value of the land as per the calculations used by the Land Department and Treasury Department is applicable. This price is not the actual sale price. A specific business tax of 3.3% on the registered sale price or the government appraised value, whichever is higher, is also applicable unless any unforseen exceptions apply.
If the specific business tax is not charged, a stamp duty fee will be applicable at the rate of 0.5%. If it required to pay for the specific business tax by the seller, then the seller has the right to request a refund for the stamp duty tax. If the seller is a corporation, then a 1% withholding tax on the government appraised value or sale price, whichever is higher, is applicable. If, on the other hand, the seller is an individual, then a withholding tax payment will be applicable when transferring the ownership before it is recorded. The tax rate will be a progressive rate on the basis of appraised or sale value and with a deduction depending on the years of ownership. The person who pays fees when transferring the ownership is usually confirmed at the execution of the purchase agreement. In addition to these taxes, there are also other taxes, for example, the capital gains tax on the sale of property. You are advised to confirm with the Revenue Department to ensure you are well-aquainted with taxes associated with a land transfer. Get in touch with our professional lawyers at Cloud 7 Legal Services who will make sure your land purchase and transfer is conveyed properly.
A proper building or construction permit is required from the local Or Bor Tor (the local government, also called the Tambon Administrative Organization or TAO) before commencing your project construction. The building permit acts as a legit evidence of ownership of your house (especially in the case of separate lease (and owner) and gives approval for building the house. The building permit is a document that is needed to be submitted to the land office at the time of house transfer. If a builder is involved in the construction, the building permit may have the builder's name, however, it should be changed to the name of the owner before the issuance of the house registration book (tabien baan).
A house construction process involves a lot of research work before issuing a building permit. Firstly, the land on which the construction will be done should have a good title, so that no other person could claim that you've built on his land in the future. Furthermore, if any servitudes affect your land, you must not violate those. If you wish to have long-term interest in the land, you must ensure that it is free from any encumbrances that could put your ownership and use of what you'll construct at risk.
If you are building on a leased land, you must ensure that the seller is not involved in any issues like a bankruptcy or other criminal activities proceeding against him that would endanger your use of the construction. Moreover, there are several laws related to zoning and hence you need to make sure that you don't violate those unknowingly. The Building Control Act and the City Planning Act governs the construction, zoning and approved uses of land. Additionally, there is a Forest Act that regulates your construction work so that you do not violate the act.
It is always a good idea to make a note of all these information before investing your time and money in the construction of anything on the land. Please note that no construction should be illegal or flout any of the building restrictions as the owner will be penalised with heavy fines and might even be imprisoned.
The illegal constructions may incur certain complicated issues, as a result of violating the building regulations, which may even lead to complete demolition or prohibition of the construction work. Therefore, it is essential that you approach a reliable and professional lawyer with relevant legal experince to make sure that there will be no such complexities arising from not adhereing to the building regulations.
There are many foreigners who need to purchase units of a subdivided property. To ensure these units to be legal, they require to agree to the terms mentioned in the Land Allocation Act. The Act has regulations that the Land Development imposes on the developers who want to subdivide their larger plots of land into 10 units or more. For this, the developers need to get licensed which is a time-taking and difficult process. However, many develpers have attempted to circumvent this regulation by approaching third-party companies registering less than 10 units. However, this is considered as illegal and involves a lot of risk when purchasing any of these subdivisions.
While the prevailing corruption persuades many developers to subdivide their plots against the law, it would be wise to properly research the developements before purchasing them directly. If you want to be protected by the Land Allocation Act, feel free to contact our legal experts at Cloud7 Legal Services.