As the government has extended the expiry date for transfer fees and mortgage fees for another two months (transfer fees saw a reduction from 2% to 0.01%) some of my clients who own a villa or condo under his/her name plan to sell and make profit. They therefore would like to know, beside paying SBT and the transfer fee, how much personal income tax they will have to pay at the land office.

Income tax withholding

When an individual sells land or property then that income tax will be calculated based on the official price declared by the Land Department, which is normally very low. If you want to know how much the official price of your villa is then you can check in advance with the land officer in your area (they may need some information about your condo or villa structure).

How to calculate withholding tax
The additional information you need to know is how many years it has been held, the number of holdings and the number of years since the property was registered under your name.

Income Tax Withholding calculation

1.Official price XXX
2.Less Expense allowance* under R.D. 165 XXX
3.Net Income XXX
4.Divide by number of year holding (max.10 yrs) X
5.Income per year = (item 3/item4) XX
6.Calculate tax according to Personal Income tax table XXX
7.Multiply by number of years holding from item 4 X
8.Withholding tax amount XXX

Example: Mr Jones acquired a villa in December 2007 and sold in May 2010. The selling price is 3 million baht, but the official price is just one million:
Official price 1,000,000
Less Expenses allowance of 4 yr hold
Under Royal decree 165 - 71% 710,000
Net Income 290,000
Multiply by number of year?s holding 4
Net income per year (290,000/4) 72,500
Calculate according to Personal lncome tax table**
72,500 x 5% = 3,625
Multiply by number of year holding the land 4
Withholding tax = 14,500

*Expenses allowance - please note that the tax laws allow you to deduct some expenses but the percentage you can deduct depends on how many years you?ve held the land.

If you?d like to see the full expense allowance deduction table and Pl tax table, please email me at: sirirat@thaiaccounting.com.

Sirirat C. is the Managing Director of NAT, the ISO 9001:2008 certified accounting
firm. Call 076 375 699 www.thaiaccounting.com