What you should know before transferring land to your child?
What should you know when legally transferring land to your child?
First, let's explain what a "legitimate child" is. It refers to a child born to parents who are legally married. An "illegitimate child" is a child born to parents who are not married. Here are some things to know about legally transferring land to your child:
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1. Prepare the necessary documents for transferring land to your child.
There are five cases for preparing documents to transfer land to a child:
1) Both parents transfer simultaneously. The required documents are: land title deed, both parents' national ID cards, both parents' house registration certificates, and marriage certificate.
2) Only one parent transfers the land to the child. If one parent is not present, the transfer is still possible, but the other parent's documents are required: a copy of their national ID card with a certified true copy signature, a copy of their house registration certificate with a certified true copy signature, and a letter of consent from the spouse for the transaction. For those who do not submit documents in person:
3) If the child is transferring the land along with their parents, bring the child's national ID card and house registration certificate.
4) If the child authorizes someone else to act on their behalf, provide photocopies of the child's national ID card and house registration certificate with certified true copies, as well as the national ID card and house registration certificate of the person acting on their behalf. A Land Department power of attorney form (T.D. 21) is also required as supporting evidence for the transfer.
5) In cases where there is an executor of the estate because the parents, who owned the land, have passed away, the required documents are: a court order or judgment, or a will appointing the applicant as the executor; proof of death of the deceased; the house registration certificate and identification card of the executor; and the land title deed or certificate of utilization.
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2. Expenses for Transferring Land to a Child
If parents legally transfer land to their children while they are still alive, the land transfer tax and fees will be as follows:
Types of Transfer Fees and Their Costs:
• Land Ownership Transfer Fee - 0.5% of the appraised value
• Land Registration Fee - 0.5% of the appraised value
• Stamp Duty - 0.5% of the appraised value
• Witness Fee: 20 Baht
• Application Fee: 5 Baht
• Duplicate Copy Stamp Duty: 5 Baht
• Personal Income Tax - 5% of the appraised value, only for the amount exceeding 20 million baht
Note: In the case of transferring land to an illegible child, where the parents are not married or the father has not registered the child as his own, the land transfer tax will be as follows:
– Land Ownership Transfer Fee: 0.5% of the appraised value (same as transferring land to a legitimate child)
– Stamp Duty: 0.5% or Specific Business Tax: 3.3% of the appraised value (either one)
– Personal Income Tax: Based on the progressive tax rate of the appraised value 50% deduction for expenses is allowed.
For land transfers to relatives other than children, such as siblings, parents, grandparents, grandchildren, or even adopted children, if it's not inherited property, the land transfer tax will be as follows:
– Land transfer fee: 2.0% of the appraised value.
– Stamp duty: 0.5% or specific business tax: 3.3% of the appraised value.
– Personal income tax based on the progressive rate of the appraised value, with a 50% deduction for expenses.
In the case of land transfers to legally recognized children after the owner's death, the land transfer tax and fees will be as follows:
If the owner of the house, condo, or land dies, the property becomes an inheritance that passes only to legal heirs. It cannot pass to illegitimate heirs.
Transferring land to a child will only incur the transfer fee; stamp duty, specific business tax, and personal income tax are not required. However, inheritance tax will be levied if the net value of the inherited property exceeds 100 million baht.
This applies to inherited land transferred to legally recognized children/parents/registered spouses. Including direct blood relatives (children, grandchildren, great-grandchildren, and lower generations), a transfer fee of 0.5% of the appraised value will be charged.
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3. Procedures for Legally Transferring Land to a Child
– Take a queue number to wait for document verification with the public relations officer, or pick up an application form and attach all the prepared documents.
– Submit the documents and application form to the public relations officer for verification. Once verified, you will be given a queue number to proceed to the specialist department.
– At the specialist department, there will be a signature process for both the recipient and the transferor. Then, the land will be appraised, along with various expenses, which will be paid at the finance department.
– After payment at the finance department, submit the receipt to the specialist department. The parents must keep the blue receipt as proof, while the yellow receipt will be kept by the officer.
– The specialist officer will print the endorsement information on the title deed and give it to you for review. Once everything is complete, the legal transfer of the land to the child is finished.
These are the important things to know for those who wish to legally transfer land to their children, whether the parents are still alive or have passed away. There will be different details regarding the documents and costs for land transfer.
Furthermore, giving land to a child is the cheapest way to pay transfer fees and taxes. It's also a gift that can be revoked if the parents later deem the child to have committed serious ingratitude.
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Thank you for the helpful information from DD Property.
