Specific Business Tax's 5-year exemption: how the clock is counted and which sales qualify

Does Specific Business Tax (SBT) apply to every property sale in Thailand? No — it applies only when the sale counts as "commercial or profitable" under Royal Decree No. 342 (B.E. 2541), the decree issued under the Revenue Code that sets out exactly when a sale triggers it, and two exemptions cover most individual sellers of a single villa: the 5-year holding period, and the 1-year house-registration rule. Both interact directly with Withholding tax on a property sale, which already covers the separate 1% company-seller and progressive individual-seller withholding calculations — this guide covers the tax that sits alongside that withholding: SBT itself.

The rate, and the alternative

SBT is charged at 3% of gross receipts (whichever is higher of the government-appraised value or the actual sale price) plus a 10% local (municipal) tax on top of that 3%, for a combined 3.3%. SBT and stamp duty are mutually exclusive on the same transfer — a sale never pays both. When SBT doesn't apply, stamp duty of 0.5% is charged instead, making the exemption worth roughly 2.8 percentage points of the transaction value.

Exemption 1 — held more than 5 years

If the seller has held the property for more than five years from the date their name was registered on the title deed, the sale falls outside the "commercial or profitable" test and SBT does not apply — stamp duty (0.5%) is charged instead.

• The clock starts at registration, not the purchase contract date — the day ownership was formally recorded at the Land Office, which can be materially later than the day a deposit or purchase agreement was signed.
• Where land and a building on it were acquired at different times (for example, land bought first, house built or registered later), the 5-year count runs from whichever acquisition was most recent.
• Part of a year counts in the seller's favour once the fifth anniversary has passed — the test is a hard five-year threshold from the registration date, not a rounded number of tax years.

Exemption 2 — one year on the house registration

Separately from the holding-period test, a seller whose name has been on the house registration (tabien baan) for that specific address for at least one year before the sale is exempt from SBT regardless of how long they've actually owned the property — the logic being that a genuine primary residence, not a short-term flip, shouldn't be taxed as a commercial sale. This exemption is available to a foreign owner registered on the yellow (non-Thai) house registration book on the same basis as a Thai national on the blue book, provided the one-year registration is genuine residence rather than a registration made solely to access the exemption.

Other recognised exemptions

• Inherited property — a transfer by inheritance is not a "sale" for SBT purposes and falls outside the tax regardless of how long the deceased held it.
• Expropriation or compulsory transfer to a government agency, and property exchanges with government entities, for equivalent reasons.
• Gifts to a legitimate child without consideration — a genuine, uncompensated transfer to a biological child is treated separately from a commercial sale.

Why this matters when planning a sale

• A sale in year four looks materially different from a sale in year six on the same villa — the 2.8-point gap between 3.3% SBT and 0.5% stamp duty on, say, a ฿10,000,000 appraised value is ฿280,000, which is worth timing a sale around if the seller has flexibility.
• The house-registration route is a legitimate way to qualify early if the seller has genuinely lived at the address, but registering purely to game the exemption without real residence is the kind of pattern the Revenue Department can and does scrutinise.
• This is separate from the withholding tax due at the same transfer — see Withholding tax on a property sale for how that figure is calculated, since SBT (or stamp duty) and withholding tax are both collected at the Land Office on completion day, as distinct line items alongside the 2% transfer fee. For the full cost picture, see Costs, taxes and the FET form.
• A Thai company seller doesn't get either exemption on the same terms — a company can't hold a personal house registration, so the 1-year route is closed to it, and company sales are more often structured or timed around the 5-year holding count instead; see A Thai company for property.

The Land Office official calculates and collects SBT (or stamp duty, whichever applies) on the day of transfer, based on the registered dates already on file — there's no separate application. The only thing a seller controls in advance is timing the sale, or the residence-registration date, correctly. Confirm the exact registration date on the chanote and the tabien baan history with a Thai lawyer or accountant before setting a sale date, since both exemptions turn on specific dates that are easy to miscount by a matter of weeks.