Phuket Condo Exit Costs: Up to 12% of the Sale Price Disappears in 2026

Everyone calculates rental yield in Phuket. Almost nobody calculates the cost of getting out. Yet exit cost decides whether an investor stays in profit or hands two years of rental income back to the market.

We modelled a typical deal: a two-bedroom condo of 90 sqm (80 sqm interior plus 10 sqm balcony) in an established complex in southern Phuket, priced at 9.9M THB, freehold, foreign quota. It is let on a one-year contract at 75,000 THB per month. The exit numbers turn out far harsher than marketing yield calculators suggest.

The biggest surprise for foreign sellers: Thai withholding tax on a freehold sale is payable whether you made money or lost it. It is not a profit tax. Sell at break-even and you still pay.

Quick Answer

• Net rental income on the model condo is about 646,000 THB per year, roughly 6.4-6.5% of the purchase budget after expenses and withheld tax.
• Buying costs on a resale unit run about 149,000 THB: a 1% transfer fee (the 2% is split with the seller), a lawyer and due diligence (~50,000 THB), and minor registration items.
• Exiting after 2 years at an 11.5M THB sale price costs roughly 1,255,000 THB: agent 5% (575,000), Special Business Tax (SBT) 3.3% (~326,000), withholding tax (~114,000), plus the seller's share of the transfer fee.
• Selling at the purchase price does not save you: at 9.9M THB the exit still costs about 1,122,000 THB. Tax is tied to the appraised value and holding period, not to your gain.
• After 5 years of ownership SBT disappears but is replaced by a 0.5% stamp duty, and the withholding tax rate rises to roughly 2%. Total exit cost on the same deal drops to about 930,000 THB.
• Property tax: residential freehold from 0.02% of appraised value (about 1,360-1,600 THB per year); leasehold from 0.3% (about 20,400 THB per year at a 6.8M THB government valuation).

For context, local market data from 2026 suggests condos take 4-6 months to sell in the segment up to 10M THB, and that leasehold condos typically lose around 20-30% of price on resale because the buyer inherits only the remaining lease term.

Scenarios and Options

Scenario 1. Buy and hold for rental. The most underrated option. A 75,000 THB monthly contract yields about 646,000 THB net per year. Freehold property tax is symbolic. You pay no SBT, no withholding tax and no agent's sale commission. The trade-off: capital is locked up, and resale liquidity in Phuket varies sharply by district.

Scenario 2. Speculative exit within 2-3 years. SBT of 3.3% (calculated on the higher of appraised or contract value) plus the agent commission work against you. To merely break even, the market has to add about 12-13% to your purchase price. Growth of 5% a year is not profit; it only compensates for exit costs.

Scenario 3. Exit after 5-6 years. Economically the most sensible. SBT drops away, leaving the 0.5% stamp duty and a higher withholding tax. Exit costs fall by about a quarter, and five years of rent will already have covered the cost of exit nearly three times over.

Scenario 4. Leasehold. Nominally cheaper to exit: about 889,500 THB on the model deal at 11.5M THB, of which 575,000 THB goes to the agent. But the seller must declare and pay the tax personally through a return, and the contract structure (price split across three 30-year periods) can unexpectedly inflate the taxable gain.

Comparison Table

Main Risks and Mistakes

Treating withholding tax as a profit tax. It is calculated from the government appraisal using a formula based on holding period, and it is charged even at a loss. Mitigation: before signing, request the appraised value of the specific unit from the Land Office and model exits at 1, 5 and 10 years.

Ignoring the gap between market and government valuation. In our example the government valuation is 6.8M THB (80,000 THB per sqm of interior area and 40,000 THB for the balcony) against a 9.9M THB market price. Property tax and some fees are based on that figure. Mitigation: check the valuation before negotiating, not after.

Underwriting market growth on the seller's word. Last year's 6% in one complex does not carry over to the next five years. Mitigation: build a zero-growth base case; if yield survives it, the asset holds up.

Forgetting withholding on rental income. For Thai tax residents, 5% is withheld on official payments; for non-residents, 15%. This is an advance, not the final tax: annual income is recalculated on the progressive PIT scale and any overpayment can be refunded. Mitigation: keep a record of withholdings and file a return.

Underestimating leasehold costs. Property tax on leasehold is 15 times higher than on freehold, and resale tax is self-declared. Mitigation: agree the price split across lease periods at contract stage, not just before selling.

Understating the price in the contract. The Land Office checks against the appraised value and will simply refuse to process the deal. Mitigation: plan for the tax instead of trying to hide the base.

FAQ

What taxes does a condo seller pay in Phuket?

A 2% transfer fee (usually split in half), withholding tax based on appraised value and holding period, and either 3.3% Special Business Tax on sales within 5 years or a 0.5% stamp duty after that.

Is tax payable if the condo is sold at no profit?

Yes. Withholding tax and SBT are unrelated to the financial result of the sale. Selling at the purchase price still costs over 1.1M THB including the agent's commission by our calculation.

When is it best to sell a condo in Thailand?

After five full years of ownership, when the 3.3% SBT falls away and the 0.5% stamp duty applies. Total saving on the model deal is about 325,000 THB.

How much tax is withheld on rental income?

5% for Thai tax residents and 15% for non-residents on official payments. This is an advance; the final liability is computed on the progressive PIT scale and any excess is refundable.

Is there an annual property tax in Phuket?

Yes. Residential freehold starts at 0.02% of appraised value per year and leasehold at 0.3%. Registering the property as your residential address lowers the rate on a single unit.

Is leasehold cheaper than freehold when selling?

On one-off fees, yes. But annual property tax is higher, you must declare the income yourself, and the contract structure directly affects the tax base.

What is the real yield on a Phuket condo?

About 6.4% net on the model deal with a one-year contract, after maintenance (50-60 THB per sqm per month), letting commission and withheld tax. Short-term letting can yield more, but costs also rise.

Should I visit before buying?

Yes. Photos do not show road noise or the condition of common areas. Plan 4-5 days to inspect properties across several districts of the island.

Source: Gosthome Phuket

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