Buying property in Pattaya is an exciting venture, but the upfront purchase price is only part of the equation. To budget effectively and avoid unwelcome surprises, it’s crucial to understand the various closing costs associated with transferring property ownership in Thailand.
These fees and taxes are levied by the Thai government at the Land Department during the transfer process. While some are typically borne by the buyer and others by the seller, many are subject to negotiation.
Let’s break down the common closing costs you’ll encounter when acquiring property in Pattaya.
What Are Closing Costs?
Closing costs are the additional fees and taxes incurred during a real estate transaction, beyond the advertised property price. They cover the legal and administrative processes required to transfer ownership from the seller to the buyer. In Thailand, these costs are primarily paid at the local Land Department office.
Key Closing Costs When Buying Property in Pattaya
1. Transfer Fee (ค่าธรรมเนียมการโอน) – 2.0%
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What it is: This is the most significant transfer cost, calculated as 2% of the property’s registered value (which is the government’s appraised value, or the actual sales price, whichever is higher).
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Who Pays: Traditionally, this fee is split equally between the buyer and the seller (1% each). However, this is always negotiable and depends on the agreement made in the Sale and Purchase Agreement (SPA).
2. Specific Business Tax (SBT – ภาษีธุรกิจเฉพาะ) – 3.3%
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What it is: This tax applies to properties sold by individuals or companies that have owned the property for less than five years from the date of acquisition. It’s calculated as 3.3% of the registered value or sales price (whichever is higher).
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Who Pays: This tax is typically the responsibility of the seller. If the seller has owned the property for five years or more, this tax does not apply, and Stamp Duty (see below) comes into effect instead.
3. Stamp Duty (อากรแสตมป์) – 0.5%
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What it is: Stamp Duty is a lower tax that applies if the Specific Business Tax (SBT) is not applicable (i.e., the seller has owned the property for more than five years). It’s calculated as 0.5% of the registered value or sales price (whichever is higher).
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Who Pays: This tax is typically the responsibility of the seller.
4. Withholding Tax (ภาษีเงินได้หัก ณ ที่จ่าย) – Variable
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What it is: This is a form of income tax collected at the point of sale.
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For Individuals: It’s calculated on a progressive rate based on the registered value of the property and the duration of ownership. It’s essentially a pre-payment of income tax on the gain from the sale.
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For Companies: It’s a flat 1% of the registered value or actual sales price (whichever is higher).
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Who Pays: This tax is always the responsibility of the seller.
5. Lease Registration Fee (ค่าจดทะเบียนการเช่า) – 1.1%
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What it is: This fee applies specifically to properties transferred via leasehold agreements (e.g., for houses or land). It’s calculated as 1.1% of the total lease value (annual rental rate multiplied by the lease term).
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Who Pays: Typically shared between the lessor (landowner) and the lessee (foreigner leasing the property), but can be negotiated.
6. Legal Fees – (Approx. 0.5% – 2.0% of Property Value)
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What it is: While not a government fee, engaging an independent, reputable Thai property lawyer is highly recommended and a crucial investment. They conduct thorough due diligence, verify title deeds, review contracts, and manage the transfer process on your behalf.
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Who Pays: The buyer typically pays their own legal fees. Fees vary depending on the complexity of the transaction and the law firm.
7. Mortgage Registration Fee (ค่าจดจำนอง) – 1.0%
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What it is: If you are financing your property purchase with a mortgage from a Thai bank, this fee is paid to register the mortgage with the Land Department. It’s 1% of the mortgaged amount.
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Who Pays: The buyer (borrower) pays this fee.
Ongoing Costs to Consider (Beyond Closing)
While not “closing costs,” it’s vital to budget for these annual or recurring expenses:
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Common Area Fees (Condominiums): Monthly or annual fees for building maintenance, security, communal facilities (pool, gym), and management. These vary significantly by building and size of the unit.
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Property Tax (Land and Building Tax Act 2019): An annual tax based on the government’s appraised value of the property. Rates are relatively low for residential properties, with exemptions for primary residences below a certain value (e.g., up to THB 50 million for an individual’s primary home).
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Utilities: Electricity, water, internet.
Who Pays What? A Quick Summary (Typical Scenario)
While all costs are ultimately negotiable between buyer and seller, here’s the typical breakdown:
Conclusion: Budget Smart, Buy Confidently
Understanding these closing costs upfront is essential for a smooth and stress-free property purchase in Pattaya. While the percentages might seem small individually, they can add up, typically ranging from 3% to 7% of the property value depending on the specific circumstances of the sale and the negotiation.
Our strongest advice: Always engage a reputable, independent Thai property lawyer. They will conduct thorough due diligence, verify all costs, and ensure all taxes and fees are correctly calculated and paid at the Land Department, safeguarding your investment.
Ready to explore properties in Pattaya with full transparency on costs?
Contact www.Realestate-Pattaya.com today. We can guide you through every step, ensuring you understand all financial aspects before you commit.
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