You fall for a second-hand home at 3,000,000, and only at the deposit stage discover that deed tax, income tax, VAT, and brokerage fees could add another 100,000-plus. Resale-home transactions aren't as transparent as new builds: who pays which tax, and how much, depends on the contract and how long the seller has owned the property. Let's break down resale-home taxes so you know the numbers before you sign.
The Tax List: Who Pays What
Resale-home transactions mainly involve four charges: deed tax, personal income tax, VAT, and brokerage fee. By regulation, deed tax is paid by the buyer, income tax and VAT by the seller (though contracts often shift them to the buyer in practice), and the brokerage fee is negotiated (usually split or fully borne by the buyer).
| Charge | Legal payer | Rate / standard | Exemption |
|---|---|---|---|
| Deed tax | Buyer | 1%-3% (by area and number of homes) | 1% for first home under 90ใก |
| Income tax | Seller | 1% (assessed) or 20% of gain | Exempt if owned 5+ yrs and sole home |
| VAT | Seller | ~5.3% (incl. surcharges) | Exempt if owned 2+ years |
| Brokerage fee | Negotiated | Usually 1%-3% | Negotiable, no standard |
Two key terms: "5-year and sole home" (certificate held 5+ years and the seller's family owns only this home) exempts income tax; "2-year" ownership exempts VAT. These conditions decide whether you skip the biggest taxes.
Worked Example: Taxes on a 3,000,000 Resale Home
Assume a 3,000,000 resale home, buyer's first home, 100ใก (>90ใก), deed tax at 1.5% = 45,000.
Case one: seller owns 5+ years and it's the sole home. Income tax and VAT are exempt; the seller pays only minor fees. Buyer total = deed tax 45,000 + brokerage (say 1% = 30,000, negotiable) = about 75,000.
Case two: owned 2+ years but not 5. VAT is exempt, but income tax applies (assessed 1% = 30,000). If the contract shifts seller taxes to the buyer, buyer total = deed tax 45,000 + income tax 30,000 + brokerage 30,000 = about 105,000.
Case three: owned under 2 years. VAT (5.3% โ 159,000) + income tax 30,000 + deed tax 45,000 + brokerage 30,000, totaling about 264,000 โ more than a car just in taxes, before even counting land premium, appraisal, and registration fees.
So on the same 3,000,000 home, "5-year sole home" vs. "under 2 years" can differ by nearly 200,000 in taxes โ the big number you must compute when pricing a resale home. To compare scenarios, use the percentage calculator for each rate and the income tax calculator to double-check the income-tax portion.
Four Practical Ways to Cut Resale-Home Taxes
First, prefer a "5-year sole home." It exempts income tax and VAT, the biggest items; if the price already bakes in those taxes, have the seller explain it clearly โ don't pay someone else's tax.
Second, put "net price" or "each pays own taxes" in writing. Many disputes come from a vague "buyer bears all taxes" clause โ specify exactly who pays what before signing.
Third, claim the first-home deed tax rate. First homes get 1% (under 90ใก) or 1.5% (over), while second homes pay 2%-3%. Don't overpay if you qualify as a first-time buyer.
Fourth, negotiate the brokerage fee. The gap between 1% and 3% is large โ one point on a 3,000,000 home is 30,000. Shop around and bundle deals. Total up price, taxes, and fees, check affordability with the mortgage calculator, then decide whether and how to buy.
FAQ
Q1: What does "5-year sole home" mean, and why is it tax-free?
"5-year" means the certificate is at least 5 years old, and "sole home" means the seller's family owns only this property. Meeting both exempts income tax; owning 2+ years exempts VAT. These are incentives for long-term ownership and against short-term flipping.
Q2: Can seller taxes be shifted to the buyer?
By law each tax has a designated payer, but the contract can freely assign who actually bears it. In practice "buyer covers all taxes" is common โ write the arrangement clearly before signing to avoid disputes.
Q3: How is deed tax calculated?
By price, area, and home count: first home 1% under 90ใก, 1.5% over; second home 1% under 90ใก, 2% over; three or more homes usually 3%. Confirm with local policy.
Q4: How much is the brokerage fee, and can it be negotiated?
Commonly 1%-3%, with no fixed standard, and yes, it's negotiable. The larger the deal, the more room โ settle the fee in writing before closing to avoid surprises.