Specific Business Tax in Thailand: 7 Transaction Costs Every Investor Must Know in 2026

If you sell a Bangkok condominium held for less than five years, the Thai Revenue Department will charge you 3.3% of the registered transaction price. This levy - known as the Specific Business Tax (SBT) - regularly catches international investors off guard, particularly those accustomed to Western property transaction structures. Understanding SBT, however, is only the starting point.

Buying or selling property in Thailand generates at least four distinct fiscal charges: transfer fee, withholding tax, specific business tax or stamp duty, and - if you lease the unit - rental income tax. Cross-border investors also carry reporting obligations in their home country. The sections below break down each cost in precise terms, with rates applicable in 2026, and clarify exactly who bears each charge.

Quick answer

• Specific Business Tax (SBT) in Thailand is 3.3% (3% base tax plus 0.3% local surcharge) and applies to properties sold within 5 years of acquisition.
• When SBT does not apply, stamp duty of 0.5% is levied instead. The two charges are mutually exclusive.
• Transfer fee is 2% of the Land Department's appraised value, commonly split equally between buyer and seller.
• Withholding tax for an individual seller is calculated on a progressive personal income tax scale; for a corporate seller, the flat rate is 1% of the registered price.
• In Cambodia, the property transfer tax is 4%, and the annual immovable property tax is 0.1% of value above approximately USD 25,000.
• Thailand and Poland have a Double Taxation Treaty (DTT) in force since 1983. Cambodia has no DTT with Poland, creating real double-taxation risk.
• Rental income from both countries must be declared in a Polish personal income tax return, using the proportional credit method for Thailand and unilateral relief provisions for Cambodia.

Options and scenarios

Scenario 1 - Buying a Bangkok condominium for THB 5,000,000

Assume you purchase a newly built unit directly from a developer. The developer has held the land for under five years, so SBT applies on their side.

• Transfer fee 2%: THB 100,000. Market practice calls for a 50/50 split, so your share as buyer is approximately THB 50,000.
• Specific Business Tax 3.3%: THB 165,000. This is the developer's liability. The buyer does not pay SBT.
• Withholding tax: charged to the seller (developer). At 1% for a corporate entity: THB 50,000.
• Stamp duty: not applicable when SBT is triggered.

Your realistic acquisition cost as the buyer: roughly THB 50,000 in transfer fee contribution, plus legal and due-diligence fees (typically THB 15,000 to THB 30,000 for title verification and contract review).

Scenario 2 - Reselling the same condominium after 3 years for THB 6,000,000

You are now the seller. You have held the property for less than five years, so SBT applies.

• SBT 3.3%: THB 198,000 - your liability.
• Withholding tax: as an individual, calculated on a progressive Thai PIT scale. The Land Department withholds the tax at registration. At a THB 6,000,000 sale price with three years of ownership, the effective withholding typically falls in the range of THB 50,000 to THB 80,000, depending on the appraised base and the allowable deductions per year of ownership.
• Transfer fee 2%: THB 120,000. Negotiated split with the buyer yields approximately THB 60,000 on your side.
• Total seller-side burden: approximately THB 308,000 to THB 338,000, or 5.1% to 5.6% of the sale price.

Scenario 3 - Buying a Phnom Penh apartment for USD 120,000

• Transfer tax 4%: USD 4,800. Formally borne by the buyer in Cambodia, though parties may negotiate otherwise.
• Annual immovable property tax 0.1%: assessed on value above USD 25,000, giving a taxable base of USD 95,000 and an annual tax of roughly USD 95.
• No equivalent of SBT exists in Cambodia.
• No DTT between Cambodia and Poland means rental income may be taxed in both jurisdictions with only limited unilateral relief available.

Comparison table

Parameter	Thailand - buying	Thailand - selling (under 5 years)	Cambodia - buying	Cambodia - selling
Transfer fee / tax	2% (often split 50/50)	2% (often split 50/50)	4% (buyer)	No formal charge
Specific Business Tax	Not applicable to buyer	3.3% (seller)	Does not exist	Does not exist
Stamp duty	0.5% (when SBT not triggered)	0.5% (when SBT not triggered)	None	None
Withholding tax	Not applicable to buyer	1% (corporate) or progressive PIT (individual)	No formal WHT	20% capital gains tax (rules still being implemented)
Annual property tax	0.02%-0.3% (Land and Building Tax, in force since 2020)	Not applicable	0.1% above USD 25,000 threshold	Not applicable
Rental income tax	Thai PIT 0%-35% or flat withholding	Not applicable	10% WHT or 20% CIT	Not applicable
DTT with Poland	Yes (since 1983)	Yes	No	No

Risks and mistakes

1. Under-declaring the transaction price. The Thai Land Department compares the contract price against its own official appraisal and levies all taxes on whichever figure is higher. Attempting to record an artificially low price to reduce SBT or transfer fee is illegal and can result in registration refusal or criminal proceedings.

2. Excluding SBT from return-on-investment calculations. Many investors project exit returns without factoring in the 3.3% SBT on disposal. On a three-year hold with 20% capital appreciation, SBT alone consumes roughly one sixth of the gross gain. Always model the full cost-in, cost-out picture before committing to a short holding period.

3. Failing to report overseas income in the home country. Investors who are Polish tax residents must declare all worldwide income, including Thai and Cambodian rental receipts. The DTT with Thailand allows the proportional credit method under Article 23 of the treaty, which avoids double taxation but does not eliminate the filing obligation. For Cambodia, where no DTT exists, the only available mechanism is a unilateral foreign tax credit under Polish PIT legislation. The practical application of that relief to Cambodia requires specialist tax advice.

4. Confusing SBT with stamp duty. The two charges are mutually exclusive. A seller who has owned the property for more than five years - or who has been registered as a primary resident there for more than one year - pays stamp duty at 0.5% instead of SBT at 3.3%. On a THB 10,000,000 sale, that distinction saves THB 280,000. Confirming which charge applies before signing is essential.

5. Overlooking the annual Land and Building Tax in Thailand. Introduced in 2020, this recurring levy applies to residential properties at rates starting at 0.02% for a primary residence. For a second or investment property - the typical situation for a foreign investor - the rate rises to between 0.02% and 0.1% depending on the appraised value. The government has periodically applied discounts, but investors should monitor current ministerial notifications rather than assume relief will continue.

6. Not establishing a Thai bank account with proper foreign currency documentation. To register a condominium in a foreigner's name, Thai law requires proof that the funds originated overseas. This means the purchase amount must pass through your Thai bank account and be accompanied by a Foreign Exchange Transaction Form (FETF). Without this document, the Land Department will refuse registration. Funding the purchase from a local Thai source or through a third party creates a documentary problem that cannot be resolved retroactively.

7. Ignoring transaction cost sequencing. Buyers sometimes budget only for the headline property price, overlooking the cumulative weight of transfer fee, legal fees, sinking fund contributions (typically THB 400 to THB 600 per square metre on new builds), and foreign exchange conversion costs. On a THB 5,000,000 unit, these ancillary costs can add THB 150,000 to THB 250,000 before the first rental cheque arrives.

FAQ

What is Specific Business Tax in Thailand?

Specific Business Tax is a 3.3% levy applied to the seller of a Thai property that has been held for less than five years. The rate comprises 3% base tax plus a 0.3% local government surcharge. It applies to both individual and corporate sellers and replaces stamp duty when triggered.

Who pays the Specific Business Tax - the buyer or the seller?

SBT is formally and practically the seller's liability. The buyer does not pay it. That said, a seller may factor SBT into their asking price, so it can indirectly influence the negotiated sale price.

How can a seller legally avoid Specific Business Tax?

The only lawful exemptions are holding the property for more than five years or being registered as the primary resident at that address for more than one year. In either case, stamp duty at 0.5% applies instead of SBT at 3.3%. There are no other legally recognised avoidance strategies.

What transaction costs does a foreign buyer pay when purchasing a Bangkok condominium?

At purchase: typically half of the 2% transfer fee (approximately 1% of the appraised value), plus legal and due-diligence fees. At rental stage: Thai personal income tax on rental receipts and a home-country reporting obligation. At resale: SBT or stamp duty (as seller) plus withholding tax.

Does Poland have a Double Taxation Treaty with Thailand?

Yes. The treaty has been in force since 1983 and allows Polish residents to apply the proportional credit method - offsetting tax paid in Thailand against their Polish liability. The treaty does not, however, remove the obligation to file a Polish tax return.

Does Poland have a Double Taxation Treaty with Cambodia?

No. The absence of a DTT means rental and capital gains income may be taxed in both Cambodia and Poland. Polish investors can explore a unilateral foreign tax credit under Polish PIT law, but the applicability to Cambodia is not straightforward and requires consultation with a qualified cross-border tax adviser.

How much is the transfer fee in Thailand?

The transfer fee is 2% of the Land Department's official appraised value, which may differ from the actual contract price. In practice, buyers and sellers frequently agree to split this charge equally, though the allocation is negotiable and not fixed by law.

What is the annual property tax in Cambodia?

Cambodia levies an annual immovable property tax of 0.1% on the value of property exceeding approximately USD 25,000 (roughly 100 million KHR). On a unit valued at USD 120,000, the annual tax is approximately USD 95.

Must rental income from a Thai property be declared in a Polish tax return?

Yes. Polish tax residents are subject to unlimited tax liability on worldwide income. Rental receipts from Thailand must be declared in the annual Polish PIT return. The proportional credit method under the Thailand-Poland DTT typically prevents double taxation but does not waive the filing requirement.

What is a Foreign Exchange Transaction Form and why does it matter?

A Foreign Exchange Transaction Form (FETF) is issued by a Thai bank when foreign currency is converted into Thai baht. For condominium purchases, it serves as proof that the acquisition funds originated abroad - a legal prerequisite for registering ownership in a foreign buyer's name. Without a valid FETF, the Land Department will not complete the title transfer.

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