Conduct a title search
Agency: Land Office
The buyer conducts the title search at the Land Office.
Time and cost: 1 day, THB 10
Lawyer conducts a bankruptcy search
Agency: Bankruptcy Court
The lawyer would conduct a search at the Bankruptcy Court in Bangkok to ascertain whether the parties of the transaction had or are involved in an insolvency procedure. Although the records are computerized, lawyers do not have access to this database and therefore they have to visit the Court to search for this information.
This procedure is not mandated by law, nor required by the Lands Department. However, it is a common due diligence procedure to properly investigate any liability that could affect the transaction.
Time and cost: 1 day, no charge
Obtain certified copies of companies’ documents from the Ministry of Commerce
Agency: Ministry of Commerce
Parties obtain from the Ministry of Commerce the following documents:
- Companies’ Affidavits confirming the name, address, the amount of registered capital, names of directors and the authorized signatories. (THB 100)
- Certified copies of the Memorandum and Articles of Association of each party (THB 50 per page, cost of certification).
- List of shareholders of the company from the Ministry of Commerce to prove their nationality.
On average, the Memorandum of Association (MoA) has 2 pages and the Articles of Association (AoA) about 5 pages.
Time and cost: 1 day, THB 900 (THB 200 (Affidavits) + THB 700 (MoA, AoA))
Lawyers prepare the sale agreement and the parties sign it
Agency : Lawyer’s office
It is common to require the services of an attorney to transfer the property. After conducting the due diligence, the lawyer drafts the sale agreement and the parties sign it
Time and cost: 3 days, THB 100,000
Parties apply for registration at the Land Office
Agency: Land Office
The seller and the buyer, or their representatives, must go to the Land Office where the land is located, to confirm the exact amount to be paid for taxes. The Land Officer calculates all the registration fees and expenses. The parties will have a bank draft issued for the payment and receipts are provided to the land officer on the day when the actual registration is taking place. The registration fee is 2% of the appraised value calculated by the Bureau of Property Valuation (GAV) and announced by the Treasury Department, Ministry of Financed every 4 years (Government Appraised Value (GAV)).
The seller has to pay a 1% withholding tax on sale price or GAV – whichever is higher. (Seller may apply this as a credit towards their corporate income tax on any capital gain). As the seller is a company, withholding tax is calculated on the greater of the appraised value and the sale price. The seller has to pay stamp duty, which is 0.5% of the appraisal value if holding period for the individual is more than 5 years. If not, the transfer will be subject to the Specific Business Tax (SBT). This SBT implies that the Seller has to pay 3.3% of the appraisal value or the sales price, whichever is higher. The 3.3% SBT includes a 0.3% municipality tax.
The SBT is imposed on persons who sell their property for trade or a profit-seeking purpose. Companies who sell real property in Thailand are deemed to be selling for trade or profit and are subject to specific business tax. Even if a company sells property in order simply to move to a new place, it is still deemed to have sold for a trade or profit seeking purpose. Accordingly, the company who is the seller in this example will be subject to SBT. The registration fee, withholding tax and SBT are collected by the Land Office. The cheque for the taxes are payable to the Ministry of Finance but collected by the Land Office.
On the day of registration, the buyer and the seller submit the request for registration with all the required documents, including a copy of the construction permit and household registration of the building as evidence to transfer the building.
The Land Officer checks all the documents (from both the seller and the buyer) submitted with the application. He will also compare the original title deed with the original copy kept at the Land Office. All information in both original title deeds must be the same. If everything is consistent, he will proceed with the registration of the transfer of ownership. An official sales agreement is prepared and signed by the authorized representatives of the seller and buyer. The Land Officer then attaches the payment receipts to the application form, and submits all documents to the Chief in charge who is authorized to approve the registration of the transfer. Once the registration is approved, it is deemed completed. The seller will receive one copy of the registered sale agreement. The buyer will receive another copy of the registered sale agreement and the original Land Title Deed.
The officer then records the sales transaction at the back of the original land title deeds (both the land owner’s and the Land Office’s copies).
Time and cost: 3 days, THB 707,453.37 (2% of appraised value (registration fee) + 1% of sale price or appraised value, whichever is higher (withholding tax) + 3.3% of sale price or appraised value, whichever is higher (Specific Business Tax))