Khun Jean

Why is in Thailand lying about the sale price at the land office 'normal'?

25 posts in this topic

ID: 1   Posted

I often wonder about the need for Thai people to lie about the sale price of property.

The transfer fee is based on the appraised value as is the witholding tax.

Only the stampduty or special business tax use the real sale price.

The stampduty is 0.5% so lying doe snot have much effect.

The special business tax is 3.3% so only there it makes a reasonable difference.

 

But would in most cases this difference not be small compared to the total amount?

Would you lie? Is it worth more for agents/brokers/.businesses?

 

1 person likes this

Share this post


Link to post
Share on other sites

ID: 2   Posted

Your accusations are based on the wrong assumptions.

 

You used the term 'appraised value' without it's proper definition. Appraised to what?

 

Has Thailand an army of trained govt appraisers who are sent out to value properties, differentiating between shoebox units that are plainly finished and those with gold plated showerheads and diamond studded door frames?

 

So, when lacking appraisers and not having viewed the interior of the properties, appraised values can only be based on the yard stick of plain finished...with inflation on land and replacement costs.

 

 

 

 

2 people like this

Share this post


Link to post
Share on other sites

ID: 3   Posted

Thais don't like to pay taxes.

I had to change my lawyer because he wasn't willing to make a tax invoice for his fees.

This lawyer has a business but doesn't pay taxes...


Sent from my iPhone using Thaivisa Connect

Share this post


Link to post
Share on other sites

ID: 5   Posted

I think the main thing is Thais aren't into paying taxes. There's a similar phenomenon with regard to appraisals/declarations of  income tax. Sure, it may seem like small change for some, but for most Thais that's not the case. A few thousand bahts still counts.

 

The difference between appraisal and actual price paid can also be used to thwart nosy neighbors, dept collectors and family members who feel they didn't get their fair share out of the sale.

 

2 people like this

Share this post


Link to post
Share on other sites

ID: 6   Posted

You pay most of the transfer costs over what is higher, the sale/buy price or the price set by the land office/revenue office. It's illegal to mention not the right sale/buy price (but who cares about it). The sale/buy price set by the land office/revenue office is mostly lower.  

1 person likes this

Share this post


Link to post
Share on other sites

ID: 7   Posted

The land office doesnt make valuations on the house or its standard of finish. It is on the land and area that the land is located.

1 person likes this

Share this post


Link to post
Share on other sites

ID: 8   Posted

The Government appraised price for land in rural areas is often a quarter to half of the actual sale price. Most government appraisals (in any country) will be well below actual sale prices. I presume the methodology used favours the government in case they have to resume or buy land.

 

Of course, if rates or annual tax is payable (particularly for improved properties),  a different methodology is used to ensure the appraised value is higher than actual sales so as to maximise returns to the government.

1 person likes this

Share this post


Link to post
Share on other sites

ID: 9   Posted

Short answer to the question is : Yes.

1 person likes this

Share this post


Link to post
Share on other sites

Thais, like most other people, don't like to pay taxes – the difference is, that coming from a "civilized" country, we think 1-3 percent is utterly cheap.

 

Some Land Departments use their appraised value for tax and transfer fee, others wish to see documentation for the actual trade price (that's were some perhaps are lying). In cases when appraised value is used, one part, or a real estate agent, will often check with the Land Office, so everybody is prepared what to pay when doing the transfer; i.e. normal procedure with seller paying tax, and buyer paying transfer fees.

 

I have experienced both types of Land Departments, i.e. use the Land Department's value, and a Land Department claiming proof of trade-price.

 

After Thai Law, to my knowledge, seller shall also pay normal income tax – or company tax – of the sales profit; there are however some deductions for length of ownership, which an accountant can calculate. The income tax, depending of profit level, can be as high as 35 percent...:sad:

2 people like this

Share this post


Link to post
Share on other sites

Yes.  Always an attempt  is  made to  specify a  sale price  well below  the actual  in a  vain attempt to  avoid the transfer fee  based  on  same. In the past  it was  accepted  but  now an appraised  value on the land  is  made to establish the  transfer fee basically  because of  the  lies. It  is a  tax rather than a fee so it  can be understood  why there is  an attempt  at avoidance.

1 person likes this

Share this post


Link to post
Share on other sites
10 hours ago, juehoe said:

Thais don't like to pay taxes.

That's amazing. Everyone else in the world loves paying as much taxes as they can. Tax havens, cash transactions for tax avoidance,  trillions of dollars not repatriated until tax concessions are enacted, tax evasion ... all those things are actually Thai in origin.

2 people like this

Share this post


Link to post
Share on other sites
Just now, Suradit69 said:

That's amazing. Everyone else in the world loves paying as much taxes as they can. Tax havens, cash transactions for tax avoidance,  trillions of dollars not repatriated until tax concessions are enacted, tax evasion ... all those things are actually Thai in origin.

LMAO ! 

Share this post


Link to post
Share on other sites

Hello,

 

Can we go to land office and ask the appraised price of a condo or house ?

 

Thanks.

1 person likes this

Share this post


Link to post
Share on other sites

From what i understand the assessed value of the land is what is used for determining the transfer fee (buyer) and the withholding tax (seller).

The Special Business Tax (seller) or when owned for more then five years the stamp duty (seller) is based on the actual selling price.

When land is owned more then five years the difference in what have to be paid is only 0.5% over the difference between the real and assessed value.

As such it should only be a small amount, maximum in the 10's of thousands.

 

How is income tax determined?

Is it based on profit (difference between the price you bought and are now selling) or just on the assessed value?

 

The withholding tax is determined using the assessed value. This could then be higher or lower then the taxes over the real income and you should be able to get a refund if the withholding tax was too high.

 

 

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!


Register a new account

Sign in

Already have an account? Sign in here.


Sign In Now

  • Recently Browsing   0 members

    No registered users viewing this page.

BANGKOK 25 July 2017 09:46
Sponsors