Many foreigners and expats who come to Thailand end up falling in love with the country and want to stay. Some marry a Thai and want to start a family and build their lives in Thailand. It’s natural that you would then be looking for something more permanent than a rented condo or apartment. Purchasing property in Thailand is not straightforward. For one, foreigners are not allowed to own land in Thailand. Though there are some loopholes around this, the most popular one is letting spouses or companies own the land that the accommodation is built on. Foreigners can own condos and houses, and many do, they just don’t own the land. Recently, the government has focused more attention on foreigners who are attempting to get around the law using this technique. Still, there are thousands of foreigners living in houses they have built on land owned by their spouses or companies.
Most expats in Bangkok will probably be most interested in buying a condo. Besides the obvious advantages in owning your own home, there is also the possibility of earning an extra income through letting your condo or from the appreciation of your property. The Thai real estate market has been hit by the global downturn, just like everywhere else, but there are still new projects being built and, now more than ever, plenty of opportunities to buy for the future.
Until recently, foreigners were restricted to only owning 40% of a condominium project’s total units. This has since been raised to 49%, which has brought more condos onto the expat market. If you find a condominium that you would like to buy, but the foreign quota has already been met, you can work around this by forming a company under Thai law (contact a lawyer for more details). There are a number of regulations put on foreigners if they want to purchase a condo, but basically if you are legally in Thailand, then you can make the purchase happen.
When you have found a condominium that you would like to buy there are a number of things to consider:
How old is the condominium building? Is it more than 20 years old? If you are buying to invest or for long term living, it may be too risky to buy anything older than 20 years. It could be demolished and may not be properly maintained. Ask the management what the future holds for the building.
Other questions to ask before buying are:
- How much is the yearly maintenance cost? Usually this cost is calculated per square meter.
- Does the condominium project have a ‘sinking fund’. This is a fund set up to maintain the condo. Make sure you know how much it will cost you.
- Is there an annual insurance premium and how much is it?
- How much experience does the management have with maintaining the condo? Have there been any issues?
- Who will pay the transfer fee’s? Currently, fees are 2% of the price and the owner should pay them, but they can be split.
- All funds needed for purchase must be brought in from abroad–you will not be allowed to obtain a mortgage in Thailand. It’s best to wait until you are ready to buy to bring the money into Thailand.
- Is the condo freehold or leasehold? Leasehold is essentially only the same as renting the property for a number of years. Freehold is full property rights and obviously preferred.
- How much is the booking fee?
- How soon after deposit must the full price be paid?
Once you have decided on a condo to buy, the actual process is quite easy:
First of all, you should ally yourself with a reputable lawyer. This is necessary to help you with the paperwork and to make sure you understand the conditions of the purchase.
When you are ready to buy, make an appointment with the seller and your lawyer to meet and have your lawyer go over the terms and conditions of the transaction. Bring your back account and passport details. You will also need to let your lawyer know your Father’s and Mother’s name.
You should use a bank cheque for the deposit in return for a receipt stating the terms and conditions of the deposit. They are usually:
- The deposit will be forfeited if you pull out for any reason except if the Due Diligence report comes back negative.
- The deposit will be returned with a penalty payment if the seller pulls out for any reason.
The seller will then give your lawyer a copy of the land deed, so your lawyer can perform the Due Diligence check. The deposit will not be cashed yet though, but will be kept in escrow with a bank account set up by your lawyer.
Your lawyer will then send someone to verify the ownership of the condo and make sure that there are no debts or other obligations.
If all goes according to plan and the checks turn out positive, you will meet with your lawyer to sign the Sales and Purchase (S&P) agreement.
The next step is for your lawyer to prepare the final sales documents. This can take anywhere from a few days to a week, which means it’s time for you to bring in the rest of your funds. Then when all is done and ready, you will go to the bank with a lawyer to get a cheque and a form stating the money is to be used for a condo purchase.
The last step involves meeting with your lawyer again to sign all papers. When this is done, you, your lawyer and the seller can go to the land office to complete the transfer of the deed. This can again take anywhere from a few hours to a week. Then when the transfer is finalized you will hand over the rest of the payment and receive the land deed in return.
In conclusion, it is actually possible to own property in Thailand, but you should make sure to get good legal advice before purchasing.
Thai Real Estate Lawyers