Buying property in Thailand as a foreigner can be daunting. There are many factors to consider, and Thai law may not be an area in which you are well-informed. Below you will find an overview of the steps that need to be taken to buy property or real estate in The Kingdom of Thailand.
1. Find a Thai Property Agent
As a foreigner, it is essential that you have the assistance of a local expert when buying property in Thailand. A dedicated real estate agent will be able to communicate with other involved parties in their native language, and they will have better insight into the geographical area.
A real estate agent will save you a lot of effort and time by providing you with a suitable range of properties that align with your price range and needs. Despite what many believe, buying property directly from a developer may lead to more significant expenses than you first anticipated, as opposed to working through an agent.
As properties in Thailand are generally offered at a fixed price, a competent agent will serve as a valuable liaison between you and the developer or seller. They will be better positioned to get the most reasonable price and represent your interests at every step of the process.
2. Legal Planning with a Thai Property Lawyer
As you will likely be spending a great deal of your savings on a property in Thailand, it is critical to execute meticulous planning. This can only be achieved with a professional property lawyer in Thailand.
As a foreigner, there are likely many legal aspects that are unfamiliar to you, so before signing any contracts or agreements, you are advised to consult a Thai property lawyer and cover all the legal grounds of the purchase.
3. Complete a Title Search
A critical step in the property buying process is thoroughly examining the title deed that has been recorded at the Land Office. This ensures you verify that the seller possesses a legal title to the property before you enter into an agreement.
A comprehensive title search will provide a clear history of the property’s ownership and indicate all registered property interests, including liens and mortgages. The title search will further verify the reserved rights regarding access to the property, such as the building rights, environmental planning codes, and residential zoning applicable to the area.
4. Pay the Deposit
If you are satisfied with the property and its title, you will be required to make a deposit to indicate your participation in the processes that will follow. In return for the deposit, the seller will effectively reserve the property and continue to the next step of the buying process, which involves drafting the contracts.
The deposit is non-refundable unless you specify particular clauses, such as a “get-out” clause or a “subject to clear title” clause.
5. Review the Property Contract
It is highly recommended that you ask your Thai property lawyer to perform a diligent property contract review since the seller is the one that will be drafting the contract. By assessing the terms and conditions specified in the contract, you are protecting your interests.
According to the Purchase and Sales Agreement, a penalty will apply if your payment is late, which must be reasonable for both parties involved. The ratio and schedule of the payment must be practical and fair. Once you are satisfied with the terms of the contract, you will be required to make progressive payments.
The first 25% of the payment is due once the roof is secured on the property. The following 25% of the payment is due when all the windows and doors are secure, and the last 25% is allocated to fittings and fixtures.
Frequently Asked Questions About Buying Property in Thailand
Are Foreigners Able to Buy Land in Thailand?
A foreigner who wants to buy land and build a house in Thailand must obtain a long-term lease on the property. The lease may not exceed 30 years in total. To build a house, a foreigner must obtain a construction permit registered in their name. This is required so that the foreigner has an official long-term lease on the property and is the legal owner of the house.
The lease may specify that another person is permitted to become the legal owner in the case that the property is sold. There is also an option to sublease the property and purchase it in full when Thai property law changes in the future, allowing the foreigner to obtain freehold ownership. A lease is the most common and practical way for a foreigner to purchase Thai property.
Can a Foreigner Own A Condominium in Thailand?
Foreigners may own a condo in Thailand by entering into a long-term lease agreement or purchasing a unit with a freehold title. A foreigner who wishes to obtain freehold ownership of a condo in Thailand can do so according to the quota of the unit.
Thai law dictates that foreigners are permitted to own up to 49% of the saleable area of a condo project. They can then acquire the remaining 51% by entering into a lease agreement. A leasehold offers the right of possession and use of the condo for a dedicated period, and the lease remains transferrable. A foreigner can lease a condo for up to 30 years, and an additional 30 years is available upon renewal.
What Taxes are Associated with the Running Costs of Owning a Condo?
Depending on the price of the property, property tax applies to owning a condominium. All the co-owners of the condo will be required to contribute to the running costs and upkeep of the condo. This fee is known as the Common Area Maintenance Fee and is calculated on a month-to-month basis according to the size of the unit. Condominium owners are also subjected to a Sinking Fund Fee, which contributes to a reserve fund dedicated to major expenses.
Can a Foreigner Own and Build Structures on the Land they Own?
Any building is considered to be part of the property it sits on, according to the law. However, if a tenant leasing the land builds a structure on the property, the building is considered a separate entity. Thus, foreigners are legally permitted to own the buildings on the land they are leasing in Thailand.
If a foreigner has a Thai spouse and they wish to build a structure on their spouse’s land, they are advised to enter into a lease agreement that stipulates they are a tenant. That way, the foreigner and their spouse will have joint ownership of the building but not the land on which it is built.
Is it Better for a Foreigner to Buy Land or a Condo?
Whether a foreigner should buy a landed property or a condo ultimately depends on their investment goals and personal preferences. Buying land entails many opportunities for expansion and offers a beneficial price-to-value ratio. In comparison, condominiums are often associated with strict renovation and refurbishment regulations and limited control. However, a condo is the most lucrative option and offers buyers an easy exit strategy. Therefore, if flexibility and ease are your top priority, buying a condominium is the best option.
