Key takeaways
SBT on the sale of real estate as a trade or for profit is 3% plus local tax, a total of 3.3% of the revenue or the appraised value, whichever is higher, paid at the time of registering the transfer. Developers are subject to it without regard to the 5-year holding test, which is an exemption for cases under Royal Decree 342, Section 4(6).
Legal framework
| Section | Key points |
|---|---|
| Revenue Code, Section 91/2(6) | Sale of real estate as a trade or for profit, however acquired |
| Section 91/5(6) | Tax base for the sale of real estate as a trade or for profit |
| Section 91/6(3) | Rate of 3.0% of revenue |
| Sections 91/8 and 91/10 | Liability, filing and payment for real estate businesses, at the time of registering rights and juristic acts |
| Section 91/12 | Operators must register for SBT within 30 days in accordance with the prescribed rules |
| Royal Decree No. 342 (1998) | Defines sales made as a trade or for profit, and the exemptions |
| Orders Por. 82/1999 and Por. 94/2000 | Guidelines on paying SBT on the sale of real estate as a trade or for profit |
Who must pay SBT
Royal Decree 342, Section 4 defines the following sales as made as a trade or for profit
- Sales by a holder of a land allotment licence
- Sales of condominium units by an operator who is the applicant for condominium registration
- Sales of buildings constructed for sale, including the land on which they stand
- Sales of real estate that has been subdivided or separated for sale, with roads or public utilities provided or promised
- Sales of real estate that the seller holds for the specific business of a juristic person under Section 77/1
- Sales not covered by items 1–5 that are made within 5 years of the date of acquisition, unless an exemption applies
The developer's position: Sales by land allotment holders, condominium registrants and builders of buildings for sale fall directly under items 1–3, so the holding period is irrelevant. The 5-year exemption and the house registration condition are in item 6, which usually applies to individuals. A juristic person selling assets outside its core business must have the facts checked case by case.
Exemptions for sales within 5 years, under item 6
- Property expropriated under the law on expropriation of immovable property
- Sale of real estate acquired by inheritance
- Sale of property used as the main residence, where the seller's name has been on the house registration for at least 1 year from the date of acquisition
- Transfer without consideration to a legitimate child, excluding an adopted child
- Transfer to a statutory heir, or to a beneficiary under a will who is a statutory heir
- Transfer without consideration to a government agency or state organisation
- Exchange with a government agency or state organisation, only in the specified cases
Tax base, rate and calculation
Base = sales revenue or appraised value, whichever is higher
| Item | Rate |
|---|---|
| SBT under Section 91/6(3) | 3.0% |
| Local tax at 10% of SBT | 0.3% |
| Total | 3.3% |
If the buyer agrees to bear the seller's SBT or fees, Order Por. 94/2000 requires that amount to be included in the base
Example 1: Developer
A company sells a condo in Phuket. Contract price THB 10,000,000, appraised value THB 8,500,000. The base is THB 10,000,000. SBT is THB 300,000 and local tax is THB 30,000, a total of THB 330,000.
Example 2: Individual selling within 5 years
Mr B bought a house 3 years ago and sells it for THB 5,000,000. The appraised value is THB 4,800,000, and his name has been on the house registration for less than 1 year. The base is THB 5,000,000. SBT at 3.3% = THB 165,000, and the 0.5% stamp duty is not charged again.
When and how to pay
The seller files the return and pays SBT to the competent official at the time of registering rights and juristic acts
- Prepare the title deed or other document of rights, the contract, juristic person documents and the power of attorney
- The official checks the appraised value and calculates the tax
- Pay the SBT fee and withholding tax (WHT)
- Receive the receipt and keep it as evidence
- Register the transfer
On PT 40 and down payments: Ruling Kor.Kor. 0706/10580 holds that a company selling real estate does not have to file a monthly PT 40 for this revenue. Booking deposits or down payments that form part of the revenue must be included at registration, whereas a deposit forfeited because the buyer breached the contract is not sales revenue requiring registration. Ruling Kor.Kor. 0811/3740 sets out the route for set-off or refund of tax paid in advance in the case concerned. If your project has previously paid in this way, consult the area revenue office.
SBT and stamp duty
| Case | SBT 3.3% | Stamp duty 0.5% |
|---|---|---|
| Developer covered by Royal Decree 342, items 1–3 | Payable | Exempt |
| Juristic person selling assets in the business under item 5 | Payable | Exempt |
| Individual selling within 5 years, no exemption applies | Payable | Exempt |
| Individual selling after 5 years | Not payable | Payable |
| Individual qualifying for the 1-year house registration exemption | Not payable | Payable |
| Sale of property acquired by inheritance | Not payable | Payable |
Checklist before transfer day
- Check the seller's status and category under Royal Decree 342
- For individuals, count the holding period and check the house registration
- Check how the property was acquired, to consider the exemptions
- Request the appraised value in advance
- Calculate the SBT fee or stamp duty, and WHT
- State clearly in the contract who bears the cost
- Prepare cash or a cashier's cheque
- Keep the SBT receipt for the accounting entry
- Record SBT as an expense, not as input VAT
Conclusion
Planning starts with classifying the seller's status under Royal Decree 342, calculating the base against the appraised value, and preparing funds for registration day, especially for developers that have already received down payments in advance.