THAILAND Law and Practice Contributed by: Olaf Duensing, Jerrold Kippen and Weeraya Kippen, Duensing Kippen, Ltd.
2.9 Condemnation, Expropriation or Compulsory Purchase
ity of contamination, buyers typically require the seller to warrant that they have adhered to applicable envi - ronmental law and to indemnify the buyer against any liability arising from contamination from the property during the buyer’s ownership or possession thereof. 2.8 Permitted Uses of Real Estate Under Zoning or Planning Law Thailand has three principal land use laws: • the Town and City Planning Act, which defines sev - eral zones of land use and controls what is allowed to be in each; • the Building Control Act (BCA), which controls the issuing of construction permits and details what is required to obtain such permits; and • the Enhancement and Conservation of National Environmental Quality Act, which limits the use of land, including construction thereon, to varying degrees depending on where the land is located. The Town and City Planning Act is applied by means of ministerial regulations issued under it that apply to specific regions. The BCA is applied by means of the royal decree issued under it which applies to specific geographic regions. The Enhancement and Conserva - tion of National Environmental Quality Act is applied by means of the ministerial regulations issued under it which apply to specific geographic regions, or by announcements issued under it that apply to specific geographic regions for specified periods of time. Other Applicable Laws Some other laws may apply to land use in some areas, such as the Marine and Coastal Resources Manage - ment Act and the National Reserved Forest Act. Thus, it is important for a buyer to review all such laws appli - cable to the purchase property at the time. There is no provision for a private party to apply for exemptions from applicable land use law in order to facilitate a development project. However, it is pos - sible for local government offices to issue regulations that would allow for more permissive variations to land use restrictions in a specified location.
Land may be expropriated by the government for public purposes in accordance with the Immovable Property Expropriation Act. Once it is determined that a property is to be expropriated, the process is as follows: • a regulation is issued under the Act that identi - fies the property to be expropriated and for what purpose; • a government committee is convened to appraise the value of the property and determine the com - pensation to be paid for it; • the government then attempts to agree on a pur - chase price for the property, and if the price cannot be agreed the owner or possessor may file an appeal; and • once the price has been determined, a new law that applies to that specific expropriation is issued and the affected owners or tenants of the expropri - ated land, buildings, perennial plant, or easements are paid and the property is transferred to the government. 2.10 Taxes Applicable to a Transaction The ownership transfer of immovable property in Thai - land is subject to the following. • Transfer fee – in an amount equal to 2% of the gov - ernment’s official valuation of the property. • Stamp duty – in an amount equal to 0.5% of the actual sale price or the government’s official valua - tion of the property, whichever is higher. • Specific business tax – in an amount equal to 3.3% of the actual purchase price or the govern - ment’s official valuation of the property, whichever is higher. • Personal income withholding tax – if the seller is a natural person and has owned the property for less than eight years. This tax is calculated using the government’s official valuation of the property as the tax base and applying a sliding scale from 0% to 35%, which is adjusted downward depend - ing on how long the seller has owned the property. If the seller has owned the property for eight years or longer, the full tax amount is applicable without such reduction. This tax may be treated as a final
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