May 2, 2022

🏘 Individual or Company ownership of a Property – Which is Best for You? 💯

🏘 Individual or Company ownership of a Property – Which is Best for You? 💯

Sometimes both foreigners and Thai companies consider the merits of owning property either under a company structure or an individual. There are a few pros and cons to owning a property via a company versus an individual which we explore in this Flash.

🏘 Individual or Company ownership of a Property – Which is Best for You? 💯

🏘 Individual or Company ownership of a Property – Which is Best for You? 💯

Sometimes both foreigners and Thai companies consider the merits of owning property either under a company structure or an individual. There are a few pros and cons to owning a property via a company versus an individual which we explore in this Flash.

A corporate structure can allow the depreciation of the building over 20 years, and this will reduce the book-value of the property and create a loss on the property that can be used as a tax credit on rental earnings. If you live in the property yourself, you should also pay a rent to the company. 

If the land and building value increases overtime while depreciating the building reduces its cost value and the land is appraised according to the government, then the market value could become higher than the cost that is booked. This means that the company will need to pay corporate income tax on the difference between the sale price and the lower cost price. Therefore, unless you plan to keep and maintain the building for many years then you need to weigh up if there is any ongoing tax benefit for you by owning the property via a company especially if you plan to live in it.

There are costs involved in setting up a company and arranging a legally workable shareholding structure. There are also ongoing costs such as accounting fees and tax submission. A company is also less likely be able to obtain a mortgage than an individual and might not be able to secure bank loans if there isn’t a real business besides renting the property to yourself. Paying cash for a property can tie up capital resulting in an ‘opportunity (lost) cost’ while the only benefit is that you can have a degree of control by having a company that can purchase land.

A foreigner can hold 49% of a Thai company and have two or more Thai shareholders holding 51%. MBMG’s legal team says that there are legal means to achieving an outcome that might work for you.

The only tax advantage of individual ownership when it comes to the sale of a property is if the property has been registered with the local authority and the owner has the registration book. In this case, the individual won’t be subject to the business and local tax of 3.3% of the appraisal value or selling price of the property (whichever is the higher).

For many people the key advantage of individual ownership of a property is the ability to obtain a mortgage often at an attractive rate compared to a typical lending rate at the time. In Thailand. A foreigner with Permanent Resident (PR Certificate) can apply for a mortgage from a Thai commercial bank. The mortgage fee in Thailand is regulated and is 1.0% of the mortgage and this is non-refundable even if the mortgage is soon afterwards paid-up.

If you sold a property and land for THB 10,000,000 as an individual then after five years you would be liable for the following withholding tax (a final tax):

For 2022, Land & Property taxes for residential properties remain at a discount. There are different rates for residencies depending upon if it’s a prime residence which is registered or not, and tax rates range between being exempt to 0.1%. Vacant, unused land have the highest tax rates of 0.3-0.7% of the appraisal value. We will look at Land & Property Tax in more detail in our next Flash.


Please Note: While every effort has been made to ensure that the information contained herein is correct, MBMG Group cannot be held responsible for any errors that may occur. The views of the contributors may not necessarily reflect the house view of MBMG Group. Views and opinions expressed herein may change with market conditions and should not be used in isolation.


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