Saving tax on property bought before 28 March 2010

The Thai government announced on 18 May 2009 an extension of a property tax reduction, in which specific business tax is reduced from 3.3% to 0.1%, while transfer fees see a reduction from 2% to 0.01%. This extension comes to an end on 28 March 2010.

A refund can therefore be requested from the Revenue Department for any property transactions made, where 3.3% was paid, between the previous expiration date of 28 March, 2009 and 18 May, 2009.

If you plan to buy or sell a property, I advise for you to do this as soon as you can, so that you may enjoy the curent Thai tax promotion rate.

As with the majority of cases of buying property in Thailand, the buyer has to pay the tax and transfer fee or at least pay 50/50, therefore, tax will be one of the major costs. Before buying or selling any property, you should know the different tax liabilities of selling property as an individual (private) or as part of a company.

The following information will hopefully help:

1. Income tax
Income tax on selling property as an individual person will be calculated base on the official price (land valued price by the land department),not the true selling price. Therefore, the income tax for the individual will be much cheaper than the corporate price as they have to use the selling price as the tax base.

2. Withholding tax
Withholding tax on selling property from any company is always 1% of the selling price, but on an individual’s selling land, withholding tax will be much lower as beside using the official price, you are also allowed to deduct expenses based on how long you have owned the land, with the shortest time being the biggest deduction. (more…)

Phuket Luxury property sales top Bt1.1bn

PHUKET: Phuket’s luxury property market saw transactions worth 1.1 billion baht for the period of July through November last year, according to market research by leading Thai consulting firm C9 Hotelworks.

A growing resale sector accounted for 50 percent of the sales.

According to Bill Barnett, Managing Director of C9, “There was an absence of new high-end product in 2009, which propelled the secondary segment, while off plan product remains sluggish.”

“The failure to launch new projects is a key constraining factor limiting volume in the marketplace”.

According to the research, geographically, Kamala’s Millionaire’s Mile has experienced the highest level of activity.

Without significant new product entering the supply steam, the second half of 2009 has seen a growing number of premium ocean-view lots transacted with buyers set to develop their own luxury residences.

“Traditionally the period of December to April remains peak sales season, and feedback in the past few weeks has seen sales traction,” said Mr Barnett.

“Ultimately, the market desperately requires new launches to stimulate broader interest if there is to be a return to stabilized trading,” Mr Barnett concluded.

Government support for Phuket investments

PHUKET: Phuket OEM Co plans to build a 76-million-baht surgical-mesh factory on the island following a grant of tax incentives from Thailand’s Board of Investment (BOI).

Surgical mesh is used to help surgical wounds heal better and more quickly. BOI senior executive investment adviser Hirunya Suchinai said the company had been successful in turning a Swedish company’s research on synthetic fabrics into a commercial project.

The company is collaborating with a vocational college in Phuket to devise courses on medical equipment in order to alleviate a shortage of human resources in this field. Hirunya said it would also commit to recruiting those students once they graduated.

“So far, no approved projects have boosted cooperation with academic institutions like this one has. This is a good sign for Thailand, which wants to promote research and development (R&D) and high-value businesses,” she said.

The plant will have an annual production capacity of 250,000 pieces.

Meanwhile, the BOI has also granted tax privileges for an 80-million-baht project to expand the Phuket Boat Lagoon’s capacity.

Hirunya said the project was aimed at meeting rising demand for rental berths and accommodation for boats and their owners in Phuket.

“Presently, 1,000-1,500 boat owners come and rent places to berth their boats in Phuket for [periods of] about 60 days on average. The rising demand has made the port’s capacity too tight,” she explained.

This project will be able to provide berths for 80 additional boats, she said. The Phuket Boat Lagoon now hosts about 250 boats and has 116 rooms for their owners. It also offers boat repair facilities.

Hirunya said the two projects were promoted in line with two of the BOI’s target industries: tourism and R&D-based enterprises.

How to Maximize Your Rental Return

Choose the Right Property and the Right Place

First of all, you need to decide on your priorities and be honest with yourself if you are buying for personal enjoyment, let your heart guide you more; but if you are looking to make a profit, focus on making a smart purchase and put personal factors to one side.

You need to consider the length of the season in your chosen, location in terms of climate, facilities and attractions. A short season could significantly decrease your profit. Also work out the typical demographic of the holidaymakers in your chosen area. Be sure that your property will appeal to these groups with its size, features and location.

Don’t rely on airline – you could be left in the lurch if the route stops. Make sure you supply holidaymakers with plenty of information on how to get to your property. Consider the unique selling points that will help your property stand out in a competitive market, and make the most of them. Research the rental market. Find a comparable property advertised with a local agent or on the internet and check their prices and how much of the year seems to be booked.

Decorate for success

Once you’ve decided on a property with these factors in mind, it’s time to make it your own. Go for quality and neutral furnishings to get as many rentals as possible. A high standard of furnishing will enable you to charge more and secure mor3e bookings. It will also be more durable and it will tend to be treated with more respect.
Cater for mass appeal when you’re buying your furnishings. .

Clean, simple and light furnishing will appeal to the largest market. Avoid either creating a bland atmosphere or making guests feel unwelcome in a sea of clutter. Locking your personal belongings away securely is also a good idea.
Think about extra touches such as Jacuzzi or hammocks; they can make your place more memorable and special. Make sure that any additions you make are cost effective.
Think about your target market and provide entertainment for adults, children or both. Consider adding some practical items such as laundry facilities and dishwasher to make guests’ lives easier and to encourage repeat business. Provide a basic first aid kit, the numbers for local doctors a safe and plenty of linen

(more…)

Emerging Thai market attracting investors.

The success of the Thai economy has aroused the interest of international property investors, according to overseas specialist David Stanley Redfern (DSR).

The country’s economy got off to a scintillating start to 2008, with first quarter growth at six per cent on the same period last year, and up 5.7 per cent on the last quarter of 2007.

Furthermore, after two years of political turmoil – culminating in a coup last year – it seems the new government is finally settling in, and has made economic growth its top priority, argues DSR.

The main course of the new administration’s efforts is centred on generating internal and regional investment, with global investment currently slowing following the continued liquidity crisis. (more…)