Selling a Leasehold in Thailand: The “Hidden” Taxes Explained

When you sell a leasehold apartment in Thailand (technically: assign your lease to a new tenant), the taxes and fees don’t work the same way as with a freehold sale. At the Land Department counter, leasehold looks cheap and simple: the parties pay 1.1% of the declared price and the transfer is done. That 1.1% is made up of 1.0% transfer fee and 0.1% stamp duty.

Here’s the catch: personal income tax (PIT) isn’t settled at the Land Department for leasehold assignments. After registration, the Revenue Department recalculates PIT on your actual gain and sends the seller a payment notice based on Thailand’s progressive tax bands. For many sellers, that later bill is the real surprise.

Quick comparison: leasehold vs freehold

Leasehold (assignment): Pay 1.1% at registration. PIT is assessed later on the seller’s profit.
Freehold (sale): Transaction costs at registration are typically ~3–6% depending on holding period and other factors, and withholding/PIT elements are handled differently at transfer.

How the gain is calculated for PIT

The key idea is amortization of the lease. You don’t own land; you own the right to use the property for a fixed term (often 30 years). Each year used “consumes” part of your original cost. Your taxable gain is essentially:

Leasehold Sale — Taxable Income & PIT

Original lease price (THB)

Total lease term (years)

Years used

Sale price (assignment) — THB

Buyer reimbursements (Sinking Fund, deposits) — THB

Registration fee rate (%)

Seller pays registration fee

Other selling costs (legal, broker, etc.) — THB

Personal allowance — THB

Results

Amortization used	–
Remaining (unamortized) cost	–
Economic sale price (sale − reimbursements)	–
Gain before costs (economic sale − remaining cost)	–
Registration fee (if seller pays)	–
Other selling costs	–
Taxable income base (Gain − costs − allowance)	–
Estimated PIT (progressive bands)	–

Formula used: Sale Price − Remaining (unamortized) lease cost − Allowable selling expenses = Taxable income → PIT bands apply.

Note: This is a quick estimator. Always document reimbursements separately and keep invoices for deductible costs.

Worked example

Original lease price: 10,000,000 THB
Term used: 6.5 years out of 30 years
Amortization: 10,000,000 × (6.5 / 30) = 2,166,666.67 THB
Remaining (unamortized) cost: 7,833,333.33 THB
Sale (assignment) price: 12,000,000 THB
Gross gain: 12,000,000 – 7,833,333.33 = 4,166,666.67 THB

Now subtract actual selling costs. A common one is the 1.1% Land Department fee (often negotiated who pays; using seller here for illustration):

Registration fees: 12,000,000 × 1.1% = 132,000 THB
Gain after fees: 4,034,666.67 THB

Thailand also applies a small standard personal allowance before the PIT bands; using 60,000 THB in this example:

PIT base: 4,034,666.67 – 60,000 = 3,974,666.67 THB

Applying the progressive PIT rates leads to a tax of approximately 957,400 THB for this scenario.

Timing: You don’t pay this at the Land Department. Expect a letter from the Revenue Department with the assessed amount and payment deadline.

“Can I just declare the sale at the remaining cost so there’s no gain?”

People ask if they can register the assignment at 7,833,333.33 THB (the remaining cost) to show zero profit. Risks:

The Land Department may reject an obviously undervalued price.
The Revenue Department may question why no income was reported, especially if the market price is clearly higher.
If the property actually changed hands for 12,000,000 THB but a much lower price was declared, that can be treated as tax evasion.

Bottom line: declare realistic values and document everything.

Legal ways to reduce the tax

Deduct real selling expenses.
Keep invoices and receipts for broker commissions, legal fees, translation, and registration costs. Proper documentation makes them deductible against the gain.
Split what’s income vs reimbursements.
It’s normal for a buyer to reimburse prepaid items such as a condo Sinking Fund contribution or a utilities deposit. These are reimbursements, not economic profit from the lease assignment. Use clear contract wording and separate line items to keep your taxable gain accurate.
Use clear contracts and proof.
Agreements, addenda, payment schedules, and transfer slips should reflect the true structure:
- Assignment price
- Reimbursement lines (e.g., Sinking Fund)
- Who pays which government fees
Plan cash flow.
Since the PIT bill comes after registration, set aside funds for the expected amount. A short pre-deal estimate helps avoid surprises.

Note: Lawyers handling Land Department registration don’t always model your PIT. This is a tax planning exercise, not just a paperwork task.

Practical FAQ

Who pays the 1.1% at the Land Department?
It’s negotiable. Many deals split it or assign it to one party. Check your contract.

When is the PIT due?
After the Revenue Department issues its assessment letter. Deadlines are strict—pay on time to avoid penalties.

Why are leasehold costs lower at the counter than freehold?
Because a lease assignment doesn’t trigger the same mix of freehold transaction taxes. The real cost for leasehold emerges later via PIT on your gain.

CTA

Have a specific lease term, price, and cost breakdown? Send the numbers and we’ll outline a clean, documented structure and an estimated PIT before you register. Neutral review, no obligation.