The property market in Thailand is just booming as never before. After we have spent 6 years in property for sale in Thailand and we have collected a list of frequently asked questions from all kind of potential investors. Most of the answers are based on real life up to date experiences, keeping the Thai laws in mind, open and honest. We give you the answers and you make your own conclusion concerning your decision to buy property Thailand.
Can I own a property in Thailand? Although the law does not allow foreigners to own land in Thailand, they can own the buildings on the land. However, there are exceptions: A foreign company may buy land if it has Board of Investment (BOI) privileges and the land is part of the project (usually manufacturing). Ownership is tied very strictly to the BOI terms and conditions agreed with the company. A new law (Land Code Section 96, 2002) allows a foreigner to buy up to one Rai. Companies and partnerships also fall under the strict laws on land ownership by foreigners. A foreigner can only own up to 49% of a company and this restricts the ownership of land as well. It is often difficult for even a company with 51/49% ownership unless you use an experienced real estate lawyer like CMS Law Associates Co., Ltd. Leasehold: Thai law allows a maximum lease period of 30 years, with the possibility to extend for a further 30+30 years. At the end of each term, both parties must register the renewal with the Land Department and pay government fees, including stamp duty. This gives the lessee “ownership” of the land. The downside is that the Lesser may not wish to renew, or the law may change to your detriment in the future. Any capital you invest into leased property is therefore liable to be lost. In addition, leased land is not easy to trade. Nominee: You can nominate a Thai to own the property for you. Definitely not recommended. Nominee with a mortgage: You can lend the price of the property to a Thai under a legally executed mortgage or loan agreement. There is a small fee payable at the Land Office to register it. The advantage to this is that the nominee cannot sell the property until the mortgage or loan has been repaid in full. Your lawyers should also set up a Last Will & Testament when they set up this type of transaction so that if the foreigner dies first the mortgage or loan is discharged in full and the Thai can inherit the property. If the Thai nominee dies first the foreigner can inherit the land, but must sell it to a Thai within 12 months. Foreigners buying property in Thailand should always write a new will to avoid any future problems for the Executors and Beneficiaries. Freehold: Foreigners can buy and own condominiums Freehold, giving you full ownership rights to buy, sell, trade and bequeath your condominium. However, the law states that foreigners may only own up to 49% of any condominium building. So make sure your lawyer checks this before buying a property. The seller must also provide a document from the Juristic management office stating that the condominium is free from all debts. Company Ownership: A highly recommended way to buy and own property is by setting up a company when buying a house, land, or other property that is not a condominium. An experienced real estate lawyer can help you do this and ensure that you control the property without interference from your nominee Thai partners.
Can a real estate agent help me to decide what and where to buy? Yes indeed, the decision will come from you only but our service is very personal and is starts with a friendly but to the bottom conversation. The more details we know about you and your strict requirements about property in Thailand, the closer we can get to the perfect match. We can help you make de decision based on hard facts, realistic figures and our own knowledge and years of experience in the world of Thailand Property and while you get your dream property, we protect you against mall practices.
What can a good real estate agent do for me? Coming to us to buy property gives you an end to end solution because our services cover all aspects of buying property in Thailand. That will start from a very personalized assistance from finding the right property that fits your budget and requirements for a fully 100 percent. Once we have found that, we will assist you with the purchase process. We bring in a team for professional and legal advisers.
What does the real estate agent do after sales? After sales service that we proved is part of the service, it concerns: manage your property, renovations, rentals and resell your property again.
Can I save this money and to direct to the developer? It is known that some agents in Thailand will collect a 5% fee for their services. But to get a potential buyer, they have spent lots of marketing budget such as advertising to help promote the developer. Developers need agents to sell their property so they will almost never sell behind the agents back. That will cost them lots of business in the future, once the act is know and it always will come to the surface. You can go direct to the developer but will not get any direct advantage of that, surely not financially.
Is it better to buy off plan? If you ask us this question, you know already about buying property in Thailand. For the ones who do not know this system: buying off the plan means buying a property before it has been built. This is impossible if your dream property is already built but many large apartment and villa developments are sold this way. Usually 90 percent of the project is sold before building really starts. Off the plan buying lets you purchase a future property at present prices, so cheaper than it ever will be. It can result in large capital gains before you even move in and it is a perfect situation for investors.
Can I finance my payment? The Thai government and also the banks in Thailand are not keen to give loans to foreigners who want to buy a property in their country. The only official finance is only available when you are going to buy a condominium in FREEHOLD. That can be done through either the Bangkok Bank’s Singapore Branch or the United Overseas Bank of Singapore (UOB). Keep in mind that it is a long and difficult procedure to follow and you will have to fulfill many requirements.
How do I pay my property? Although there is not a fix rule, most of the payments would be like this. First, when you sign the contract in Thailand, you leave a deposit on the payment with a credit card or cash. Most of the sellers would mention that this money is ‘non refundable’ so if you change your mind, you will lose this deposit. Mostly is this 10 percent from the selling price or fixed on 50.000 or 100.000 THB. This is called a reservation fee but legally, it is not obligated. For that deposited, the seller will keep the property for you and not selling it to another buyer for at least 14 days up to 1 month. After that period, you suppose to pay 20 to 50 percent from the selling price by bank transfer, from your country to the seller account in Thailand. Another 25 percent is paid later and at the ‘hand over of the title’ the fully 100 percent suppose to be paid. In some developments there is a steady payment plan worked out because the property is not ready to move in and your payments follow the evolution of the property.
Do I have to pay the real estate agent a commission? No, you do not have to pay the agent because this amount is paid by the seller directly to the agent or broker. Mostly in Thailand the standard commission is 3 percent but already several owners and developers are offering 5 percent of more to motivate the agents to sell their property. The agent’s commission is paid by the seller because the agent is putting in efforts by marketing to find the buyer. Although you do not directly pay the agent, he will take care of you when you buy from him.
Does the agent show me many properties? That is absolutely not so. A good agent likes to save you time to see what you want. It is a short process in 2 major steps. The first step is a confidential, productive and very interactive meeting with our property advisor. Although it is business, brief and to the point, you are our friend in the first place. By having a honest and open conversation about how your perfect dream property looks like in all of its aspects, our representative can narrow down the overwhelming amount of property offers to just 3 potential matches.
How much is the “normal” price for a property in Thailand? There is no such a thing as a “normal” price for property in Thailand. To determent to price for a property, there are lots of factors that coming together and all of them together will determent the selling price of a property in Thailand. Here are a few important price determent factors: Location swimming pool cost, quality, sea view or mountain view and the desperation of the seller to sell it.
Are there any ‘hidden’ costs involved? Indeed and ‘hidden’ is here the right word because most of the sellers does not even mentions them. Luckily as in most of the European countries, there is not property tax to be paid to the Thai government. It just does not apply to a property being used for private residential purposes. But you do have to pay some costs applied only upon official transfer of ownership from the present owners name to your name for the future. These are falling into 4 categories.
Transfer fees what involved 2% to 3% of the official selling price, depending of the area the transaction is done, stamp duty and that is 0.5% of selling price, 3.3 % Business tax and capital gains tax. But do not worry too much on this total amount. Most of these four fees are calculated relative to the government’s ‘tax assessment value of the property’ and this value is well below market value. The precise methods of calculation are very complex, too complex for us to understand. So finally the real ‘hidden’ cost for you is between 1 and 5 % from the ‘official’ selling price.
Do I need a Lawyer? Absolutely yes!!! It does no matter how small the investment is, we always advice you to engage the services of a Lawyer. That is first of all for your own piece of mind and secondly to protect you against everything that can go wrong. Even if you should buy from an established resort or property developer we advise you to use a good lawyer. Most of the developers have their own lawyers but as we mention, they are their own lawyers and in case of conflict they will take side of their client, in this case the developer.
Your own lawyer can check things that we cannot such as land titles, construction permits and taxation.
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