Land transfer fees to rise by average of 25% next year

Transfer fees are based on appraised value as determined by the Treasury Department of the Finance Ministry, not actual market prices. So, for example, if a buyer pays Bt1.5 million for a plot appraised at Bt1 million, the transfer fee will be 2 per cent of the latter figure, or Bt20,000. But if the appraised value of that same plot rises by 25 per cent next year, to Bt1.25 million, the transfer fee will rise accordingly, to Bt25,000.

Kanda Group chief executive officer Issara Boonyoung, who is also director of the Housing Business Association, said it was not unusual for actual land prices to be much higher than the appraised value.

For example, land in Bangkok’s Ploenchit Road is appraised at Bt800,000 per square wah (Bt200,000 per square metre), but the market prices in this location are among the highest in the capital, averaging Bt1.9 million per square wah (Bt475,000 per square metre).

The Treasury Department will announce the new land appraisals at the end of this year, and they will become effective on January 1, 2016.

Chakkrit Parapantakul, director-general of the Treasury Department, said the new appraisals would remain in effect until December 31, 2019. On average, the appraisals will increase by 25 per cent, but for land close to the mass-transit system, they will increase by around 100 per cent.

For example, land appraisals near the Skytrain route in Thon Buri district will increase from an average of Bt215,000 per square wah to Bt450,000 per square wah, up by 109 per cent.

Meanwhile, appraisals on Sathorn Road will rise from an average of Bt600,000 per square wah to Bt750,000, on Sukhumvit Road from Bt520,000 to Bt650,000, on Silom Road from Bt850,000 to Bt1 million, and on Ploenchit from Bt800,000 to Bt950,000.

A source in the property business said that although the new land appraisals would still be lower than the market prices, the transfer fees would rise in parallel next year, so this year is a good time to buy.