We reported last year that the Cabinet of Thailand had resolved to reduce the registration fees payable upon the transfer of certain interests in real estate, as a measure to stimulate the real estate sector of the Thai economy. The reduced registration fees came into effect on 29th March 2008 and were initially frozen at the lower rate for a period of one year ending on 28th March 2009.

Many buyers who stand to benefit from the reduced fees and whose property is near completion, have been applying pressure upon developers to ensure that completion of their property has taken place and the registration process has been concluded prior to 28th March 2009, thus allowing them to benefit from the considerable reduction in government registration and transfer fees.

The Ministry of Finance recently reported that the reduced registration fees had stimulated the real estate sector of the Thai economy. Consequently, on 2nd December 2008 the Cabinet of Thailand resolved to approve a one year extension of the reduced fees payable on the registration of immoveable property, ending on 28th March 2010.

The reduced registration fees are applicable to land and building transfers, condominium unit transfers, the registration of buildings as condominiums and the registration of mortgages. The registration fees in relation to these transactions have been reduced from 2 percent to 0.01 percent (except mortgage registrations which havebeen reduced from 1.1 percent to 0.01 percent). In addition to the reduced registration fees, certain taxes payable upon the transfer of real estate have also been reduced. It is important to note that the reduced registration fees do not apply to the registration of leases or the transfer of land which has no buildings or structures built upon it.

The reduced registration fees and taxes, which may (depending upon the value of the interest transferred) amount to a saving of several thousand U.S dollars, provide prospective buyers with a valuable incentive to invest in their dream home in Thailand now rather risk considerable additional costs post 28th March 2010.

This Article was Co-written by Christian Glanville, Partner of Belmont Limcharoen (Samui) and Eddie O’Shea, Senior Associate at Belmont Limcharoen (Phuket).