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Question about Buying

Buying a condominium unit in Thailand has become easy and straightforward since the “1992 Condominium Act”, and is accessible to all foreigners (individual or company)

The 3 conditions to purchase a condo as a foreigner

All the conditions listed below must be checked by your property agent and your lawyer before the acquisition

1) The residence is registered as a condominium

2) The funds necessary to purchase the condo must have originated from outside Thailand, in foreign currency (EUR, USD, HKD, SGD, GBP, AUD, etc.).

The Thai bank that receives the funds issues a Foreign Exchange Transaction Form. The foreign buyer must present this form to the land department to become the legal owner of the condo. The purpose of the transaction must be indicated (ex: “purchase of a unit in the condominium X”).

If you don’t have a Thai account, you can send the funds to the account of your Thai lawyer assisting in the transaction.

3) The foreign quota of 49% of the total space of all units in the residence is not reached yet See section 19 of the Condominium Act on http://www.dol.go.th/

In case the quote is already reached (some condos are in this case already, contact us for more information), the solution is to purchase the condo through a Thai company

Although not often clearly explained by developers of new projects, it is critical for foreign investors to assimilate the difference between “freehold” and “leasehold”.

  • Freehold: the purchaser fully owns the property without limitation of time; the property can be donated.
  • Leasehold: the purchaser doesn’t own the property but leases it for a long period of time.

– Condominium: Residential building where each unit is owned individually. There are as many title deeds as units in the residence. The owners share rights and duties on the condominium with other co-owners.

– Apartment: Residential building that is owned by a single owner (Thai individual or company). There is only one title deed. A unit in an apartment building can’t be sold/purchased

A Serviced Apartment is a residence offering more services (included in the lease agreement) than regular apartments, e.g. housekeeping, cable TV, internet, full kitchenware, etc. Generally favored for short-term rental, when expats just relocate to Bangkok

 

  • Foreigners are allowed to own directly standalone properties (land, house, villa, hotel, factory…) but they cannot directly own the land on which the property is built
  • However, numerous villa developments targeting foreigners offer a legal structure offered based on leasehold investment, generally 30 years extendable, sometimes more
  • Owning a land through a Thai company is also possible for foreigner buyers
  • Identification of the costs implied (purchase price, taxes and commision)
  • Checking of the residence (financials, status, ongoing works, etc)
  • Paperwork (Memorandum of Understanding, Sale and Purchase Agreement)
  • Technical inspections
  • Transfer of ownership
  • Registration of the condominium unit by a foreign owner

The tax regime for condo investors in Thailand is very favorable compared with western countries. From low conveyance taxes (transfer taxes) to the absence of tax on capital gains.

Foreigners looking to purchase a condominium unit in Thailand can finance a part of their investment through a loan, under certain conditions.

Question about renting

  • Most properties are for long-term (1 year+)
  • Signing a 2-year contract upfront helps to negotiate better conditions
  • In order to book the property before signing the agreement, a fee can be offered to the landlord (up to 1 month of rent)
  • Equivalent to 2 months of rent
  • Deposit put down at the signing of the lease agreement
  • Refunded when the tenant moves out minus potential repair and unpaid bills
  • Properties for rent in Bangkok are generally fully furnished
  • Condos up to 2 bedrooms and apartments are always fully furnished
  • Condos and houses of 3 bedrooms (or more) may be unfurnished
  • Requests to remove or add furniture are treated case-by-case
  • Attached to lease agreement
  • The check-in inventory is completed on or before the move-in date
  • Specific requests are addressed case-by-case
  • It is not unusual to request to repaint the premises or repair a few things
  • “Our brokerage service is free and non-binding for the tenant”
  • We receive a commission from the landlord when the lease agreement is signed
  • There is no charge for property hunting services offered by our agency
  • In case of specific services requested that are not directly related to property search, e.g.moving furniture, a fee may be applied by our agency (to be discussed)
  • Market practice is 1 month for the first year of rent and 1/2 month in case of extension

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