The country attracts many expats looking to buy property either as a lifestyle or investment. Bangkok has a wide range of newer and legacy properties, and the Andaman coast is home to popular Phuket with its luxury pool villas.
While it is possible for foreigners to purchase freehold land, most prefer condominiums as they offer rental yields over 5%. Depending on the location, prices can fluctuate.
Land
Foreigners are prohibited from owning land in Thailand. However, they may apply for a long term land lease. This allows them to build structures like houses or townhouses on the property registered under their name.
Buying land in Thailand is a little bit more complex than it might be for some people. Rumours about the price of properties can artificially inflate prices, leading buyers to pay over the odds. However, this trick doesn’t work when it comes to calculating the value of the land for transfer fees and specific business taxes.
Purchasing freehold land requires you to set up a Thai company in order to acquire it. This does involve a certain amount of additional work and cost (incorporating and maintaining the company) but is not as expensive as you might think. The advantage of this method is the high potential resale value and outright ownership. In addition, the company can be sold or transferred at any time and still maintain its rights to the land.
Condominiums
A condo is a good option for a first time property buyer in Thailand. Purchasing off plan will require an initial deposit while the building is being constructed and monthly instalments paid while the property is registered to the investor’s name.
When buying a condo it is wise to speak with real estate agents who specialize in the market you are interested in. Advertisements are often not the same price you will pay for the property and there could be hidden expenses such as furniture, electrical fittings and cleaning fees that buyers are unaware of.
Foreigners are allowed to buy condominium units in Thailand under the Condominium Act, however the process should be overseen by a lawyer who knows the regulations and laws governing the condominium transaction. Obtaining the correct documents to avoid any problems can be time consuming and frustrating. Once the transfer is completed you will receive your Tabien Ban book – blue for Thais and yellow for foreigners – showing that you are the new owner of the property.
Villas
Buying a villa in Thailand can be an ideal investment for those looking to gain access to the unique East-meets-West culture of this beautiful nation. It also offers a more private setting than apartments or condos. But it is essential to understand the rules and regulations surrounding land ownership for foreigners before making any serious decisions.
Under Thai law, a foreigner cannot own the land on which a villa is built. However, if the house is to be owned by a foreigner, then the structure must be leased from the government under a land lease agreement. In order to obtain the lease, foreign investors must present proof of remittance in Baht and a signed Exchange Control Form.
Foreigners must also pay various fees and taxes when acquiring a villa in Thailand including income withholding tax, transfer fee and specific business tax based on the registered sale price or government appraised value. Most villa estates will also charge a yearly maintenance fee for common areas.
Townhouses
Buying townhouses in Thailand can be tricky for foreigners. It is a better option for them to buy condos because they don’t have to worry about ownership laws and there are usually more convenient amenities like swimming pools. They also offer 23/7 security including CCTV and are often gated. However, they can be more expensive than a townhouse and there will be extra monthly fees for the condo development.
It is essential to have a specialist real estate lawyer who can perform due diligence on the property and the developer before any financial transaction takes place. Failure to do this can lead to unnecessary complications, delays and even legal disputes. They can check that the land has a legally issued land title deed and that it has not been encumbered by other owners or the government. They can also verify the construction quality and the building materials used. They can also check the land and house taxes that are associated with a particular piece of property.
