Q&A
Condominiums (Condos)
Foreigners can own up to 49% of the total area of a condominium building. The remaining 51% must be owned by Thai nationals. Foreigners must transfer the funds for the purchase from a foreign bank account, and the transaction must be recorded as a foreign currency transaction by a Thai bank. The foreign buyer will receive a Foreign Exchange Transaction Form (FET-form or Thor Tor 3) from the bank, which is required for the transfer of ownership.
Houses and Land
Basically it is not allowed for foreigners to own houses in Thailand, But actually there are ways to own house as a foreignesr. Typically, if a foreigner has a Thai wife, they can purchase a house under their Thai wife's name. Another option is to establish a company for purchasing the house through the company's documentation. This is commonly seen in places like Phuket and Pattaya, where foreigners own houses using these methods. Such processes can be carried out with the assistance of experts and lawyers. If you are interested in owning a house in Thailand, please feel free to contact us. We will help you to provide detailed assistance one by one.
Leasehold
Foreigners can lease land for up to 30 years, and this can often be renewed. Some choose to form a Thai company to buy land and build a house, but the majority of shares must be held by Thai nationals. This method has legal complexities and risks.
Usufruct Interest
This allows the foreigner to use the land and derive benefits from it (e.g., agriculture, residence, rent), but not to sell it.
Superficies
Foreigners can own structures upon land that they do not own, often used in conjunction with a long-term lease of the land. It's crucial to consult with legal experts and real estate advisors familiar with Thai property laws before making any decisions. Laws and regulations can change, and there are various legal complexities involved.
Eligibility Criteria
Thai banks are generally cautious when lending to foreigners. You may need to have a work permit or be a long-term resident to be considered. Some banks may require a Thai co-signer or guarantor.
Documentation
Proof of income, employment, and credit history are usually required. You may also need to provide a business or employment history in Thailand.
Loan Terms
Interest rates can be higher for foreigners. The loan-to-value ratio is generally lower, meaning you may need to make a larger down payment. Loan terms may be shorter compared to what is offered to Thai nationals.
Alternatives
Some foreigners opt for financing from their home country. Developer financing is another option, where the property developer themselves offer financing options, although these can be at higher interest rates.
Legal Considerations
As a foreigner, you can only own certain types of property (e.g., condominiums up to 49% of the total area). It's crucial to consult with legal experts familiar with Thai property laws and banking regulations before proceeding.
Offshore Financing
Some foreign banks that operate in Thailand offer loans to foreigners, but these usually come with strict conditions and require substantial documentation. It's advisable to consult with financial advisors and legal experts to explore your options and understand the risks involved. Laws and regulations can change, and each bank may have its own set of criteria and conditions.
1.Selecting the Right Property
First, you need to choose a suitable property. You can obtain extensive property listings through a real estate agent, who can recommend suitable properties for you.
2.Reserving the Property
Once you've found the right property, you can pay a reservation deposit to secure it. At this stage, the agent can assist in negotiating the price with the developer to get a better deal.
3.Signing the Purchase Agreement
After paying the reservation deposit, you'll sign a purchase agreement with the developer. The agent can help review this agreement to ensure its terms are favorable to you.
4.Making the Down Payment
Based on the agreement's terms, you'll need to make a down payment on a specified date. The agent can offer advice on payment methods and timings.
5.Securing a Loan
If you need financing, you can contact Thai banks or other financial institutions for a loan. The agent can assist in the loan application process, providing necessary documents and information.
6.Paying the Remaining Amount
Before the property is handed over, you'll need to pay the remaining amount as per the agreement. The agent can advise on payment methods and timings.
7.Property Handover
Once the property is built and ready for handover, the developer will notify you. You can inspect the property and complete the handover procedures. The agent can provide property inspection services to ensure its quality.
8.Inspecting the Property
Before the handover, you should thoroughly inspect the property to ensure all facilities are completed as per the agreement and there are no defects or damages. The agent can assist in this step, ensuring the property is in good condition.
9.Transferring Property Ownership
After the property handover, you'll need to visit the local land office to transfer property ownership. This step usually involves certain taxes and fees. The agent can assist in these procedures, ensuring everything goes smoothly.
10.Moving In
After completing all procedures, you can move into your new property. The agent can offer post-move-in services and advice to ensure a smooth settling-in experience.
1.Research and Understand the Legal Restrictions
Before starting the process, it's crucial for foreigners to understand the legal restrictions on property ownership in Thailand. Typically, foreigners cannot own land but can own the building on the land or a condominium unit. A real estate agent can provide clarity on these regulations.
2.Selecting the Right Property
Begin by choosing a suitable resale property. A real estate agent can offer a wide range of listings and recommend properties that fit your preferences and budget.
3.Property Inspection
Before making any commitments, inspect the property thoroughly for any defects, damages, or legal disputes. The agent can assist in this step, ensuring the property is in good condition and worth the investment.
4.Negotiating the Price
Once you've chosen a property, negotiate the price with the seller. The agent can use their expertise to help you get the best deal.
5.Drafting and Signing a Sales Agreement
After agreeing on a price, draft a sales agreement detailing the terms of the sale. The agent can help review this agreement to ensure its terms are favorable to you.
6.Making a Deposit
Based on the agreement's terms, you'll need to pay a deposit to secure the property. The agent can offer advice on payment methods and timings.
7.Conducting Due Diligence
It's essential to conduct due diligence to ensure there are no legal disputes or encumbrances on the property. The agent can assist in this process, ensuring the property's title is clear.
8.Finalizing the Payment
After due diligence, finalize the payment as per the agreement's terms. The agent can advise on payment methods and timings.
9.Transferring Property Ownership
Visit the local land office to transfer property ownership. This step usually involves certain taxes and fees. The agent can assist in these procedures, ensuring everything goes smoothly.
10.Moving In or Renting Out
After completing all procedures, you can either move into your new property or consider renting it out. The agent can offer post-purchase services, advice, and even property management services if you decide to rent.
When foreigners purchase property in Thailand, merely owning property does not grant them a visa directly. However, certain real estate development projects do offer the "Thai Elite Visa" as an added benefit for property buyers. This program, supported by the Thai government, aims to attract high-net-worth individuals to Thailand. The Elite Visa provides long-term residency rights, typically for 5, 10, or 20 years. In addition to residency, visa holders can also enjoy other privileges such as VIP airport services and golf club memberships.
Furthermore, while property ownership itself doesn't directly qualify one for a visa, it can serve as an investment or financial proof for applying for other visa types. For instance, foreigners might consider using the property as part of their investment to apply for an investment visa. There's also the LRT visa, or Long-Term Residency visa, typically for retirees aged 50 and above. However, if foreigners have substantial investments in Thailand, including real estate, they might also be eligible for this visa type.
In summary, buying property in Thailand doesn't mean foreigners can directly obtain a visa, but the property can serve as a criterion or proof for certain visa applications. Before applying for any visa, it's recommended to consult with local immigration lawyers or experts to ensure all requirements are met and to understand the latest visa policies.
New Condominium
Role of Agents: When buying a new condominium, agents can provide you with the latest project information on the market, help you filter out condos that meet your requirements, and assist in negotiations with developers. They typically have an in-depth understanding of the local real estate market and can advise you on prices, locations, and the reputation of developers.
Role of Lawyers: While it's not strictly necessary to have a lawyer when buying a new condo, if you want to ensure there are no unfavorable terms in the contract or want to understand legal matters related to buying, you might consider consulting one.
Resale Condominium
Role of Agents: The role of agents becomes even more crucial when purchasing a resale condominium. They can help you find available condos for sale, assist in negotiations with the seller, and ensure the transaction process goes smoothly. Agents can also provide historical information about the condo, such as previous owners and the maintenance status.
Role of Lawyers: When buying a resale condo, lawyers can assist in conducting a title search to ensure there are no legal disputes or outstanding debts associated with the condo.
Villa
Role of Agents: Agents can assist in finding villas for sale and provide detailed information about them. They can also help negotiate with sellers to ensure you get the best deal.
Role of Lawyers: The role of lawyers becomes paramount when purchasing a villa. Since foreigners typically can't directly own land in Thailand, lawyers can help set up a legal structure for land ownership or assist in arranging long-term leases. They can also review purchase contracts and ensure all transfer procedures related to the land and property comply with Thai legal regulations.
In summary, regardless of the type of property you're looking to purchase, it's advisable to at least consult with agents or lawyers to ensure your interests are protected and the transaction process is seamless.
In Thailand, condominiums and apartments can be categorized into two main types based on their furnishing.
Fully Furnished (FF): These units come equipped with all essential furniture and appliances. This typically includes beds, sofas, wardrobes, air conditioning, kitchen appliances, and sometimes even utensils and linens. They are ready for immediate occupancy without the need for the tenant or buyer to invest in additional furnishings.
Partially Furnished (PF) or Unfurnished: These units might come with some basic items, such as air conditioning units or curtains, but lack other essential furniture. Tenants or buyers would need to invest in additional furnishings to make the space livable.
While many new condominiums, especially those targeting expatriates or foreign buyers in prime areas, tend to be fully furnished, it's not accurate to say that all units in Thailand are fully furnished. The furnishing status often depends on the target market, the developer's strategy, and the specific location of the property. If considering a purchase or rental, it's always advisable to clarify the furnishing status directly with the seller, landlord, or agent.
Indeed, the real estate commission structure in Thailand differs from some other countries. In Thailand, when it comes to new condominiums or real estate projects, agents typically do not charge buyers a commission. Instead, they receive their commission from the developers or the project's sales side. This is because developers or sellers view agents as a channel to bring potential buyers, and hence, are willing to pay a commission to incentivize agents to promote their projects.
For the resale market, agents might earn their commission from the seller since they assist in connecting them with a buyer and facilitating the transaction. In such cases, buyers usually aren't required to pay any agency fee.
Despite not charging buyers, agents in Thailand are still committed to providing comprehensive services to them. This includes understanding the buyer's requirements, shortlisting suitable properties, arranging viewings, and assisting in the negotiation and transaction process. Their primary goal is to ensure that buyers have a seamless and satisfactory property purchasing experience.
However, whether you're a buyer or a seller, it's always recommended to clarify all fee and commission details with the agent before collaborating to avoid misunderstandings or disputes later on.
Common Area Maintenance Fees (CAM Fees)
For condominium owners, these fees are typically charged monthly or annually by the building's juristic person or management committee. They cover the maintenance and upkeep of shared areas such as lobbies, swimming pools, gyms, and gardens.
Property Taxes
Thailand imposes a few types of property-related taxes. The most common are the House and Land Tax and the Local Development Tax. The rates can vary based on the property's location and its usage (whether it's residential or commercial).
Insurance
Property insurance in Thailand can help protect against potential damages from events like natural disasters, theft, or other unforeseen circumstances.
Repairs and Maintenance
Regular maintenance of the property is essential. This can include activities like painting, addressing wear and tear, or fixing broken appliances.
Sinking Fund
Some condominium complexes charge a one-time sinking fund fee. This fund is set aside for future major repairs or renovations to the building.
It's important to note that the exact costs can vary based on several factors, including the property's location and type. Consulting with a local real estate expert can provide a more detailed understanding of these costs for a specific property in Thailand.
Condominium (Condo)
1.Transfer Fee
Typically 2% of the registered value of the property. It's common practice for the buyer and seller to share this fee equally.
2.Stamp Duty
0.5% of the registered value or assessed value, whichever is higher. This fee is usually shared equally between the buyer and seller.
3.Specific Business Tax (SBT)
3.3% of the selling price or assessed value if sold within five years of purchase. This fee is typically shared equally between the buyer and seller.
4.Withholding Tax
Deducted from the seller's income, varies based on ownership duration and assessed value.
5.Maintenance Fee
Some condos might require advance payment of a year's maintenance fees.
6.Sinking Fund
One-time fee for future major repairs or renovations. Amount varies by condominium.
House (For Foreigners)
1.Company Setup
Foreigners can't directly own land. A common method is setting up a Thai Limited Company to buy the land. The foreigner can own 49% of the company, with 51% held by Thai nationals.
2.Legal Fees for Company Setup
Approximately THB 50,000 or more, depending on complexity.
3.Transfer Fee
Typically 2% of the registered value. It's common practice for the buyer and seller to share this fee equally.
4.Stamp Duty
0.5% of the registered value or assessed value, whichever is higher. This fee is usually shared equally between the buyer and seller.
5.Specific Business Tax (SBT)
3.3% of selling price or assessed value if sold within five years. This fee is typically shared equally between the buyer and seller.
6.Withholding Tax
Deducted from the seller's income, varies based on ownership duration and assessed value.
7.Land Tax
Nominal annual tax on land ownership.
8.Utilities Installation
Additional costs might apply for new developments or remote areas.
9.Building and Construction Tax
Exempt if used for residential purposes by the owner (company). Otherwise, 0.3% of assessed value.
The cost of utilities in Thailand can vary based on the location, type of property, and individual usage. However, I can provide a general overview of the average costs for some of the primary utilities.
Electricity: The cost can range from THB 3.5 to THB 4.5 per unit (kWh) for residential properties. For a typical one-bedroom condo in Bangkok with regular air conditioning use, the monthly bill might range from THB 1,000 (approx. $28.57 USD) to THB 3,000 (approx. $85.71 USD).
Water: Water is relatively inexpensive in Thailand. For residential properties, the cost is usually between THB 20 to THB 40 per unit (1,000 liters). A typical monthly water bill for a one-bedroom condo might be around THB 100 (approx. $2.86 USD) to THB 300 (approx. $8.57 USD).
Internet: A broadband internet connection with speeds of 30-100 Mbps can range from THB 500 (approx. $14.29 USD) to THB 1,500 (approx. $42.86 USD) per month, depending on the provider and package.
Cable TV: Basic cable packages can start from THB 300 (approx. $8.57 USD) per month, with premium packages costing upwards of THB 1,000 (approx. $28.57 USD) per month.
Gas: For cooking, the cost of a 15kg LPG cylinder is around THB 350 (approx. $10 USD) to THB 450 (approx. $12.86 USD), but this can last for several months depending on usage.
It's essential to note that these are average figures, and actual costs can vary based on individual consumption, the specific location within Thailand (e.g., central Bangkok vs. a rural area), and the current market rates. Always check with local service providers for the most up-to-date pricing.
