Below we list out some of the Frequently Asked Questions about buying property in Thailand

We have listed out some of the common questions asked by clients about buying property in Thailand. If you have a question which is not listed here and would like us to answer it please feel free to contact us anytime.

1. Why do I need a real estate broker to assist me to buy property in Thailand?
2. Can a foreigner Own a Condominium in Thailand?
3. Can a foreigner Own a House and Land in Thailand?
4. What is the procedure to buy a condo and what is a Tor Tor Sam (3) ?
5. Do they have Title Deeds in Thailand?
6. Can a foreigner Get a Mortgage Loan?
7. What about Land Appraisals and Valuations
8. What things Should I Look for in a Property?
9. My Wife is a Thai National, Can She Own Land?
10. How can I find a good Thai lawyer?
11. Do I have to pay ongoing Property Taxes in Thailand?
12. When I Purchase Property in Thailand, what kind of taxes and costs are applicable?

Why do I need a real estate broker to assist me to buy property in Thailand?

Buying property on your own, in a foreign jurisdiction can be often risky for many different reasons. Significantly in Thailand, local knowledge and negotiation skills of an experienced local real estate agent can be extremely useful when buying property. An experienced estate agent, posses the knowledge of market values of properties, legal requirements, understands cultural differences in negotiations of the process of buying property will be a very cost effective tool when you are buying property. They will help you make a fully informed decision by taking you out to see many potential properties before you a make a final decision to buy. Most of their services involved in assisting you to buy property will not cost you anything as a buyer. The real estate agent's commission which is normally a 3% on the selling price of the property is paid by the seller. Sellers often add this figure in to their selling prices to help them sell the properties through real estate agents. So there will be no significant price reduction because you do not use a real estate agent to assist you in buying. In fact a reputed real estate agent like us would assist you to negotiate with the owner in an effective way for you to get the lowest possible price for the property. Furthermore a real estate broker can also guide you through the legal procedures to ensure safe and secure transactions. So in many different ways it is wise to seek assistance of an experienced real estate agent such as Benchmark Property Consultants to assist your property purchase here in Thailand.

Can a foreigner Own a Condominium in Thailand?

In Thailand the most convenient way of buying a property for a foreign buyer is to buy a condominium. The only restrictions on purchasing a condominium, are that the percentage of units sold to foreigners cannot exceed forty nine percent (49%) of the total number of units in the condominium building and that the funds used to buy the condominium have been transferred from abroad and correctly recorded as such by a Thai Bank on a Tor Tor Sam. The balance of 51% should be in a Thai name or in a Thai registered company name. Foreigners buying condominiums is governed by the jurisdiction of the Condominium Act B.E. 2535 (1992).

The foreign condominium owner will get a title deed (called as " Chanod " or " Chanut " in Thai) which legally proves his ownership of the unit. The certificate also has a statement saying exactly what percentage of rights over the common areas of the building each owner has. This document will state the area of the condo that belongs to the owner privately and his name registered on that document as the only legal owner for the unit.

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Can a foreigner Own a House and Land in Thailand?

This is one of the most frequently asked questions about buying property in Thailand. The best way to circumvent the law that prohibits the foreigners to own land is to consult an experienced and reputable Thai lawyer to advice you about the best possible options available. Benchmark Property Consultants can assist you to introduce you to such a lawyer who can offer his services at a very reasonable cost.

Ownership of land is governed by the Land Code BE 2497 (1954), the Civil and Commercial Code, Land Reform for Agriculture Act BE 2518 (1975) and the regulations set forth by the Ministry of the Interior.

Although Thai law prohibits foreigners from owning land in Thailand, there are various options you can choose to legally become the owner of the land, and still comply with existing Thai laws:

1. Option 1: Nominee with Lease and Option to Buy - you can use a Thai Nominee to purchase the house/land and have a 30 year lease with a 30 by 30 year option from the nominee. In order to be enforceable, any lease for a period of longer than three years must be legally registered, which involves payment of a registration fee and stamp duty based on a percentage of the rental fee for the whole lease term. The original registered lease remains in force and effect even if the property is sold. The downside to a lease include the fact that the parties involved can contractually agree to renewals, but this right cannot be registered and is not effective against a purchaser of the property, and that the lessee cannot (without the lessor's consent) sublease, sell or transfer his or her interest.
2. Option 2: Nominee with Mortgage - you can use a Nominee such as a Thai friend, partner, etc to purchase the house/land and have a mortgage (registered with the appropriate land department office) on the property in your interest. However, in some circumstances the Thai courts have ruled that this was not a conventional mortgage, but rather it was a mortgage contrived to circumvent the existing laws of Thailand prohibiting foreign ownership of land. It is important to note that only the owner of the land is entitled to mortgage the land; the lessee of land does not have the same rights as the owner.
3. Option 3: Usufruct Interest (Sidhi-kep-kin) - This is a temporary way of having ownership rights to Land or related affairs. In practice, a usufruct is limited to a 30 year maximum period; like leases, the agreement can be successively renewed. In comparison to a lease, a usufructury interest can be sold or transferred, although it expires upon the death of the holder of the usufruct and thereafter cannot be inherited.
4. Option 4: Limited Liability Company - This is the most popular way of owning Land and House among the foreign clients or investors as structure of the company can be arranged in a way to ensure maximum protection for the minority shareholder where majority Thai ownership is compulsory under the Alien Business Law. The requirement of Thai law is 51% of the shares be held by Thai juristic persons, however, any company with more than 40% foreign interest that purchases land will be investigated by the Central Land Office in Bangkok (under Section 74 of the Land Code) to ensure that the company has not been organized in an attempt to circumvent the prohibition against foreign ownership of land. This results in the foreign ownership of the company being limited at 39%, but with the recommended changes to the company structure, the foreigner can be the sole director of the company, and the only officer of the company who can commit or bind the company in any contractual affairs - effectively giving the minority shareholder control over the company.

What is the procedure to buy a condo and what is a Tor Tor Sam (3) ?

Once you agree on a selling/purchasing price the common practice is to prepare a sales/purchase agreement that will mention all necessary details of the purchase such as the selling price, amount of deposit paid, time frame to complete the full payments, conditions of transfer fees, etc. Normally an experienced real estate agent or a qualified lawyer can prepare this agreement for you once they have completed the due diligence on ownership documents. It is a common practice to pay a reservation deposit to reserve the property you like and this prevents the seller from selling it to someone else once you have finalized your decision. This deposit normally can vary from Baht 50,000/= to Baht 500,000/= depending on the sales price of the property. After the purchasing agreement is signed by both parties with witnesses the buyer will get time to transfer funds from overseas (up to 30 days or negotiable) to their local bank account.

A Tor Tor Sam (3) is an official bank document issued by the receiving bank upon the receipt of foreign currency into your bank account in Thailand. You must request a Tor Tor Sam from your bank when you are remitting funds to Thailand for the purpose of purchasing a condominium, and the Tor Tor Sam must specify that the remittance is solely for the purpose of purchasing a property - Code 5.22.

Do They Have Title Deeds in Thailand?

The land title deed or "Chanod" as it is commonly known in Thai is a certificate of ownership for land which is completely in Thai language. A Title Deed is the purest form of evidence that an individual owns a piece of land. Title Deeds are given only for areas of Thailand which are surveyed. For areas which are not surveyed, there are other documents for land possession such as evidence of the possession of the right to utilise the land or other interests in the land. These documents are called "Nor Sor Sam (3) and Nor Sor Sam (3) Kor". Unlike the Title Deeds, these Nor Sor documents are issued to show the possessors' exploitation of the land. Though these documents do not provide ownership rights, as do Title deeds, they can still be registered for transfer of the lands for which they are issued.

Can a foreigner Get a Mortgage Loan?

Foreigners generally cannot mortgage properties in Thailand, however, most of the financial institutions in Thailand provide loans for real estate purchasing to Thais and Thai companies. It is common for a real estate developer to arrange for his customers to have a financing package from a financial institution. In most real estate development projects, a down payment can be made in installments from 10 to 24 months. After the down payment has been paid, the sale contract will be made and the balance amount is paid through the loan which is financed from a financial institution. The financial institution requires you to mortgage the property with it as collateral against the loan. There is another option available for buyers which is not very common but some private property owners offer owner financing with a down payment and installment payments with or without interest for 12 to 36 months depending on negotiations.

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Land Appraisals and Valuations

Finding the exact appraisal price for land is difficult, since there are generally three different appraisal rates; the government rate, the appraisal company's rate and the rate which is considered to be fair market value of the land. Over the last few years all of these rates have begun to come closer together. If you need any assistance in land appraisals and valuations we will be happy to assist you in every possible way with our staff’s experience in the property market. Please feel free to contact us if you need assistance.

What Should I Look for in a Property?

Whether you are considering renting, leasing or purchasing property there are several infrastructure and other considerations which must be taken into account:

1. Location - Roads, proximity and access to business, shops, hospitals and etc.
2. Telephones - Access to direct lines and IDD facilities
3. Internet-access to broadband (ADSL) or fast internet facilities
4. Water - Mains water and supplementary storage facilities.
5. Electricity - Mains connection, and backup generators for condominium blocks
6. Security - 24 hour security service, Alarm systems, door and window locks
7. Cable or Satellite TV connection
8. Pest Control - localised spraying and flywire screens on windows
9. Hot water facilities - nearly all in Thailand are instant and not storage
10. Air Conditioning - a necessity in Thailand
11. White Goods - Refrigerators and Washing Machines

My Wife is a Thai National, Can She Own Land?

Prior to 1998, any Thai woman who married a foreigner would lose her right to purchase land in Thailand. She could, however, still retain land that she owned prior to marrying the foreigner. However, the recent (1999) Ministerial regulation now allows Thai national's married to foreigners the right to purchase land, but the Thai spouse must prove that the money used in the purchase of freehold land is legally solely theirs with no foreign claim to it. This is usually achieved by the foreign spouse signing a declaration stating that the funds used for the purchase of property belonged to the Thai spouse prior to the marriage and are beyond his claim.

How can I find a good Thai lawyer?

Finding a good lawyer in Pattaya would not be an easy task for a first time visitor or a foreigner without expert advice. When you are looking for a lawyer important things you need to consider are his professional background, experience, local knowledge and most importantly whether his fees are reasonable or not. It is highly recommended that you consult an experience real estate agent such as Benchmark Property Consultants who can give you unbiased advice on choosing the "right" lawyer. Choosing a lawyer is something you need to get right the first time because if not, it can end up with a lot of unwanted confusion and problems. Benchmark Property Consultants can recommend you several lawyers who are well qualified and experienced in their profession and also have given their service to many clients who are satisfied with their service. Please feel free to contact us if you need a Thai lawyer to assist you.

Do I have to pay ongoing Property Taxes in Thailand?

There are no property taxes as such in Thailand that are exactly equivalent to the property taxes in the west, however, the most comparable taxes on properties in Thailand are the Land Tax and the Structures Usage Tax. The Land Tax levied on land is so miniscule, that in practice the body charged to collect it, rarely bothers to do so, and if they do, they usually wait several years until the amount accumulates. The second tax, the Structures Usage Tax, relates to buildings, is collected by the municipal office or district office, and is only applied to properties used for commercial purpose.

When I Purchase Property in Thailand, what kind of taxes and costs are applicable?

On all purchase/sale of property in Thailand there is a stamp Duty of 0.5%, a transfer fee of 0.01%, a business tax of 0.11% levied against an owner who has been in registered possession of the property less than 5 years, and Income Tax. There is no Capital Gains Tax in Thailand, unlike many countries, and Income Tax (usually between 1.0 - 3.0%) on property is the comparable replacement. There are no set rules on who pays the income tax, and it is just another part of the bargaining process, as with all the other costs of the transfer of ownership

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