On the day of registration the land officer withholds income tax from the seller, calculated on the appraised value, less a standard deduction fixed by the number of years held, with the balance spread over those years before the progressive rates apply.
This calculator covers income tax only. Transfer fees, specific business tax and stamp duty are handled by the transfer fee calculator.
Result
An estimate for guidance, not advice on your matter.
Why the appraised value is used
The law requires withholding to be calculated on the appraised value, which is usually lower than the price actually agreed, so a seller can work the figure out in advance. Specific business tax and stamp duty use the higher of the appraised value and the sale price, so they run on a different base.
The standard deduction by years held
- One year: 92 per cent. Two years: 84. Three: 77. Four: 71.
- Five years: 65 per cent. Six: 60. Seven: 55.
- Eight years or more: 50 per cent.
- Property received by inheritance or by gift: 50 per cent however long it was held.
Counting the years
The count runs from the year of acquisition to the year of transfer, with both counted as full years and any part year counted as one, capped at ten. Property acquired late in one year and sold early in the next therefore counts as two years.
Whether to include it in the annual return
A seller of inherited property, or of property not acquired for trade or profit, may choose not to include this income in the annual return. If it is left out, the tax withheld is final. Where too much was withheld, including it may produce a refund, so both routes are worth comparing.
Read more
An estimate following the Revenue Department method. A corporate seller is withheld differently, at 1 per cent of the higher of the two values, and a sale amounting to a trade is taxed on a different footing.
Sources
- Revenue Code, section 50 (5) on withholding from the sale of immovable property, and section 48 (4) on the election not to include such income in the annual return where the property was not acquired for trade or profit.
- Royal Decree issued under the Revenue Code on deductible expenses (No. 165) B.E. 2529 (1986): standard deductions of 50 to 92 per cent by years held, and 50 per cent for property received by inheritance or gift.
- Revenue Department
- Department of Lands