Purchasing an Apartment in Phuket: Prices, Taxes, Expenses.

Housing prices in Thailand might seem high, but in Phuket, you can actually purchase an apartment in a prestigious area at a cost comparable to housing in the Moscow suburbs or major Russian cities. Let's figure out what to pay attention to when choosing an apartment and what additional expenses may arise when buying property in Thailand.

Cost of Real Estate Agent and Agency Services

0 baht - that's exactly what you will pay the real estate agent. In Thailand, it's customary for all agent services to be paid by the seller: the developer or property owner. The residential complex developer pays for all agent services.

Many believe that it's more profitable to buy property in Thailand without intermediaries to save on commission. However, when buying directly from a developer, the price will be the same, strictly according to the official price list. It's better to establish business and friendly connections with real estate agents than to offer discounts to buyers indiscriminately.

A professional real estate expert will become your reliable partner. He will always be aware of promotions and gifts from developers, can request an additional discount or special conditions for the buyer, and most importantly - will accompany you at all stages of the transaction, checking contracts from a legal point of view and recommending the most profitable offers.

Freehold and Leasehold

The developer's price lists usually show the property price in leasehold for at least 90 years, and below - the cost of freehold registration. Or next to the price, the form of ownership is indicated, then the difference between leasehold and freehold is already considered. If you want to register an apartment in freehold, the registration cost will be about 10% of the cost. Usually, in new projects, the surcharge for registration is 350,000 baht (10,300 USD).

Furniture Package

One of the features of new construction projects in Thailand is that they are offered with fully completed renovations, built-in furniture, air conditioners, plumbing, and kitchen equipment. Some developers offer owners the opportunity to participate in rental programs and receive passive income. To participate in such programs, the property must be registered according to the number of the hotel room (i.e., the apartment number will be identical to the hotel room number). Developers develop special furniture sets for buyers.

Most developers include a full set in the property price, including built-in, mobile furniture, and appliances. Alternatively, they offer to purchase an additional furniture package for 250-500 thousand baht, depending on the area of the dwelling. Or you can design and select furniture yourself. On the secondary market, there are options for real estate with both a built-in furniture set and full equipment.

Taxes When Acquiring Property in Thailand

When making a purchase and sale transaction in new construction, the buyer is required to pay a one-time registration fee, which consists of several tax obligations. The amount of the fee depends on the type of property, the form of ownership (freehold or leasehold), and the duration of ownership. In some situations, taxes and fees are based on the contractual value of the object specified in the purchase and sale contract; in others - on the appraised value, which the lawyer clarifies at the Land Department.

I can give you an approximate idea of the size of the registration fee, as each case is individual. In some situations, the seller divides taxes and fees equally or in a certain proportion, in others - they are paid only by the buyer or seller. You will learn the exact amount of the total registration fee at the Land Department before the transaction.

REGISTRATION FEE - 4 TYPES OF TAXES AND FEES:

Transfer Duty - a fee for the registration of the transfer of property rights: 2% for freehold and 1% for leasehold.

Special Business Tax - 3.3% for freehold, paid in the case of a commercial transaction: if the seller is a legal entity or the seller is an individual who has owned the property for less than 5 years.

Stamp Duty - 0.5% for freehold and 0.1% for leasehold.

Withholding Tax - 1% for freehold if the seller is a legal entity, and 0-35% of income if the seller is an individual.

In total, for freehold registration, all fees amount to 6.3%, which are usually shared with the developer. For leasehold - 1.1%, if the contract does not specify another percentage. There is no strict scheme for determining which fees are paid by the buyer and which by the seller. Usually, the seller takes on the special business tax and income tax, while the transfer duty and stamp duty fall on the buyer. However, other options are possible, as each transaction is individual.

In one of the new projects on Karon Beach, the developer provided transparent information and clearly defined the percentage, which depends on the contract and the official price of the apartment at 3.5 million baht: 2.25% registration for freehold and 1.25% for leasehold. Thus, we get:

Freehold - 78,750 baht Leasehold - 43,750 baht

Contributions to the Depreciation Fund

This fee is also known as the "major repair fund" or Sinking Fund. It is paid once when buying a new building. Sometimes the developer replaces it with a small annual fee. Funds are directed to unforeseen repairs of common areas. The one-time payment is 400-800 baht/sq.m. for a studio area of 28 sq.m. and a contribution to the depreciation fund of 500 baht/sq.m. the annual payment is 14,000 baht.

How Much Does an Apartment in Phuket Cost?

Let's summarize with our apartment on Karon Beach for 3.5 million Thai baht. In calculations, I will not take into account annual and monthly fees, which can be easily compensated by rent.

• Cost of a 28 sq.m. apartment - 100,000 USD • Agent services - 0 • Furniture package - 0 • Freehold registration - 12,250 USD • Leasehold registration - 1,250 USD • Major repair - 410 USD • Meter installation - 155 USD

When buying a freehold, the total amount is 112,815 USD, for a leasehold - 101,815 USD. The form of ownership does not affect the subsequent resale or rental of the apartment.

Every buyer has the opportunity to sign a 5-year apartment rental agreement with a guaranteed annual income of 7%. The management company undertakes to pay 7,000 USD annually. It should be noted that when paying rental income, the developer will withhold a tax of 15% (income from renting received by foreign citizens).

After five years, buyers can join the Rental Pool program, within which they receive 40% of the profit from the real rental, and the management company pays all costs. With such a program, it is possible to earn up to 12-14% per annum (before paying a tax of 15%).

If you have any further questions, I will be sincerely glad to answer them. You can contact me via WhatsApp or Telegram, or by filling out the form on the website below. We have apartments in complexes with a hotel license and the highest income. We are happy to help you choose a project for investment or housing for your own living. Contact us!