The process of purchasing a villa ( or a detached house) in Thailand may consist of several transactions. Since houses are considered as structures based upon the land, and the property law dictates that foreigners are not permitted to own land, generally, a lease of the land is provided for buyers to enter into - and this is where you are going to need Juslaws & Consult. The villa itself can be transferred separately from the land on which it is built, since in Thailand, the land and the house can have different owners; this is normally done via execution of a long-term lease agreement. The transfer of ownership of the villa must be registered with the Land Department or Provincial Land Office, depending on the location of the land and villa in question. Moreover, you can secure your ownership through the right of usufruct under sections 1417 - 1428 of the Civil and Commercial Code of Thailand.
Villas tend to be luxurious, expensive, and sometimes can only be found in specific gated complexes. The villas within such a complex often have a similar theme. Buying a villa is very appealing, as this type of property offers a truly exclusive homeownership within a secured complex, and some even offer excellent facilities within the area. Developers of villa projects must adhere to specific guidelines outlined in their building licenses, ensuring consistency within the community. Consequently, villas within such projects usually benefit from professional property management services. These services, including maintenance tasks such as gardening, electricity, water systems, and waste disposal, are typically covered by monthly maintenance fees. This arrangement significantly reduces individual homeowner responsibilities.
The process of purchasing a villa in Thailand is divided into two separate juristic acts - a land lease, and a villa sale-purchase. The land lease agreement is executed for the period of 30 years and registered at the local Land Office. A separate Sale-Purchase Agreement will also be in place for the purchase of the villa as a separate structure. This agreement will then be attached to the Land Title Deed kept at the land department. However, depending on the area yof purchase, this may not always be the case. The other transaction that may be entered into is a land lease agreement executed for the maximum period of 30 years with the developer; subsequently, the individual building permit for the villa itself will be transferred to the buyer by the developer. In this process, the permit holder is required to submit a statutory notice to the land department, accompanied by a 30-day notice issued by the Land Office for the transfer of the property. During this period, the developer or seller must present the construction or building permit, the Tor Ror 900 document, and the House Registration booklet to the land office. Upon the expiration of the 30-day period, ownership of the house is transferred to the buyer, and the lease is officially registered at this time.
Step 1: Finding a Property in Thailand
The Real Estate market in Thailand has grown substantially over the past ten years, as foreign ownership has steadily continued to increase. If you do plan to purchase property in Thailand, then you should be wary of the following:
- Whenever you are buying property in Thailand, you shall use services of a property lawyer and real estate agent. They can help to protect your interests in acquiring real estate.
- Research is essential.
Before commencing your property search, familiarize yourself with the laws and regulations.
Step 2: Setting up Your Thai Company
This step is somewhat outdated in the newer market, but since only a Thai persson or entity may own land, some people still find it useful to embark on a property purchase this way. In order to help you make the decision, always consult with a Thai property lawyer before chhosing any options.
There are different business entities that may own property in Thailand - for instance, a Thai limited company. If you decide to establish a Thai company, it is best to know for sure which kind of company you are going to register. If you do end up selecting this option for buying property in Thailand, then you will have to perform legitimate business practices, as the company must remain active. You will also be liable to business tax according to Thai law.
Step 3: Buying a Villa in Thailand
When your Thai Limited Company is registered, some further actions shall be taken, including consultation with a property lawyer. This lawyer will complete the title search before any contracts are signed. This step is extremely important because the buyer must be certain that the person selling the property is its legitimate owner and is therefore entitled to sell it. Thai real estate was a target industry for fraud against foreigners in the past. There are several different types of title deeds in Thailand:
-Possessory right title deed is not generally recommended because there has been no substantiation from the Land Department; the only substantiation exists through tax payments made to the Local Administrative Office.
- Standard Nor Sor 3 Certificate, if the title has not been measured by the Land Department yet, so no precise boundaries exist for the land.
- Nor Sor 3 Gor Certificate - the land can be mortgaged, transferred, or sold in the same manner as land that has a freehold title deed. This is the land awaiting its full title deed.
- Freehold title deed which grants the holder full rights over the land in question.
If you're considering purchasing pre-construction projects, it's advisable to seek legal counsel. Additionally, you'll need guidance on Thailand property taxes and the transfer fees associated with your villa purchase. Utilizing a property transfer calculator that accommodates foreign currency conversions can provide insight into potential costs.For more detailed information on foreign ownership regulations and the process of buying property in Thailand, we invite you to contact us. Our team can provide the latest insights and guidance related to the Thai property market.
The transfer of villa ownership is conducted at the land office, where it's essential to note that certain laws, such as the Land Code and the Condominium Act, have been replaced by newer legislation. Despite these changes, the sole government authority in Thailand authorized to oversee this administrative process remains the land office.
When buying property in Thailand, you will require the following documents are required to transfer the property:
- Building permit;
- Tabian Baan (house book);
- Title deed;
- Passports/ID cards of the buyer and the seller; and
- Official documents related to the property
Whether you're considering the purchase of a villa or any other type of property, it's highly recommended to seek guidance from a lawyer or solicitor to ensure a smooth and legally sound transaction. At Juslaws & Consult, we prioritize adherence to correct purchase procedures, as encountering property-related issues in Thailand can be both inconvenient and stressful for foreigners.
For more comprehensive information on buying land, purchasing a condominium, or conducting real estate due diligence in Thailand, please feel free to reach out to Juslaws & Consult. You can contact us at our Bangkok or Phuket office for further assistance and guidance.