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Selling Property in Thailand: Company vs. Personal Name – Tax Differences, Pros & Cons

When selling property in Thailand, the tax implications can vary greatly depending on whether the property is owned under a personal name or through a company. Understanding these differences is crucial for optimizing your tax liability and making informed financial decisions. This guide will explore the tax obligations, benefits, and drawbacks of selling property under a company vs. a personal name, helping you determine the best approach for your investment strategy.


Key Differences: Selling Property Under a Company vs. Personal Name

Tax on Sale:

If you sell property under your personal name, you'll be subject to Personal Income Tax (PIT), which is based on progressive tax rates. However, if the property is owned by a company, you will pay Corporate Income Tax (CIT) at a flat rate of 20%.

Specific Business Tax (SBT):

When selling property under a personal name, the SBT of 3.3% applies only if the property is sold within 5 years of purchase. In contrast, the SBT always applies when selling under a company name, regardless of the holding period.

Stamp Duty:

Stamp duty is 0.5% of the selling price for both personal and company sales, but it is exempt if the SBT applies.

Withholding Tax:

Withholding tax for personal property sales is calculated based on the duration of ownership and the property value. For company sales, a flat 1% applies, based on either the selling price or the government appraised value.

Profit Calculation:

When selling under a personal name, the tax is based on the assessed property value and the number of years owned. For a company, the tax is calculated based on actual profit, which is the selling price minus allowable expenses.

Ease of Selling:

Selling property under a personal name allows for a direct transfer to the buyer. On the other hand, selling property under a company typically involves transferring company shares or the property title, which can be more complex.

Selling Property Under a Personal Name

Pros:

  1. Lower taxes: If the property has been owned for over 5 years, you’re exempt from the Specific Business Tax (SBT).
  2. No corporate maintenance costs: There are no annual accounting or audit costs associated with personal property ownership.
  3. Simpler transaction: Selling directly to an individual buyer is more straightforward.

Cons:

  1. Higher taxes if sold within 5 years: If the property is sold within 5 years of purchase, SBT will apply, resulting in a higher tax burden.
  2. No tax deductions: Unlike a company, you can't claim deductions for property maintenance or improvements.
  3. Progressive tax rates: Your tax rate will increase based on the selling price and how long you’ve owned the property.

Best for:

  1. Long-term investors who hold properties for over 5 years.
  2. Investors looking for a hassle-free selling process with no corporate administration.
  3. Owners who prefer simple tax calculations based on the assessed property value.

Selling Property Under a Company Name

Pros:

  1. Flat corporate tax rate: The 20% flat rate on profits can be advantageous compared to progressive tax rates under a personal name.
  2. Tax deductions: You can deduct costs related to maintenance, property management, and depreciation, potentially lowering taxable income.
  3. Share transfer: Selling via company share transfer may reduce direct property transfer taxes.

Cons:

  1. SBT applies: The Specific Business Tax (SBT) of 3.3% applies regardless of how long the property has been held.
  2. Additional administrative work: You’ll need to maintain the company, including annual tax filings and accounting.
  3. Complexity: The selling process is more complicated, especially if transferring company shares instead of the property itself.

Best for:

  1. Investors looking to minimize taxes through allowable deductions.
  2. Businesses managing multiple rental properties.
  3. Those seeking full control over property without foreign ownership restrictions.


Tax Breakdown: Personal Name vs. Company Name

For a property sold under a personal name, you’re subject to withholding tax based on ownership duration and property value, with a potential 3.3% Specific Business Tax if sold within 5 years. The stamp duty is 0.5%, unless SBT applies. For a company, the withholding tax is a flat 1%, and the 3.3% SBT always applies. In addition, corporate income tax of 20% applies on net profit after allowable deductions.

Which Option is Better?

Choose Personal Name if:

  1. You plan to hold the property for more than 5 years to benefit from the SBT exemption.
  2. You want a simpler tax calculation and lower administrative work.
  3. You prefer to sell directly without the need for corporate tax filings.

Choose Company Name if:

  1. You own multiple properties and want to take advantage of tax deductions.
  2. You plan to sell within 5 years and want to manage tax burdens effectively.
  3. You need a business structure for managing real estate investments.

Conclusion: Making the Right Decision

The best approach depends on your investment goals:

  1. If you’re a long-term investor, selling under a personal name might help minimize taxes.
  2. If you’re a property investor with multiple units, a company name could offer valuable tax deductions, though it requires more administrative effort.

Need expert advice?

Contact us today to learn about tax-saving strategies when selling property in Thailand!

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