Buyer’s Property Guide to Thailand
Buying property in Thailand can be risky. The first obstacle to overcome is the fact that foreigners are not allowed to own land.
Then the next problem is how to find a reputable property agent as anyone can be a property agent in Thailand as the industry is unregulated and no licenses are required or available. Another issue is that all of the paperwork is in Thai, so common sense says, up have to engage a lawyer.
Armed with the knowledge that foreigners are not allowed to own land, what are the options for you, if you who wish to live or invest in Thailand.
Watch our video on buying property in Thailand
Foreigners are not allowed to own land in Thailand by law. All foreigners have the following options: either a leasehold or purchasing through a Limited company. Condos and apartments can be purchased by foreigners if at least 51% of the development is owned by Thai nationals. Foreigners with a Thai partner have another option. In this case you may register the land in their name and register the building on the land in your name, with a legally-binding lease agreement between you and your partner at the land office.
Buying a Condo or apartment in Thailand
An easy way for a foreigner to acquire property in Thailand is to buy a condominium or apartment. The Condominium Act of Thailand (2008) allows non-Thai nationals to purchase up to 49% of the condos in a development and this kind of purchase is regarded as freehold. Although buying a condo in Thailand is quite straightforward, people should be aware of the associated risks. All paperwork and contracts relating to the purchase should be studied carefully, as different condominium developments may have separate by-laws and regulations.
Leasehold is a very popular way for foreigners to buy property in Thailand and the Thai authorities encourage foreigners to go this route. The most popular type of lease agreement involves registering the property for 30 years, which can then be re-assigned or passed on only if these clauses are written into the lease agreement before the registration at the Land Office.
Company Set Up
Setting up a Thai company is another way for foreigners to own a home in Thailand, but it can be complicated and expensive. You would certainly need good legal advice before considering this option.
If your partner is Thai, the land can be registered in their name and you could register a lease agreement but as always, we recommend that you take legal advice before hand
Finding an estate agent
As property agents in Thailand are unregulated and unlicensed, you need to be careful as anyone can set up as property agent without any prior experience.
Our advice is to use the Internet and read the local forums as the first step, in order to find a trustworthy property agent with a good reputation.
Do your homework
When you have found the property you feel is right for you, it’s wise to research the developer or owner online. Read the local Internet property forums and ask pertinent questions regarding the property.
After-sales support and estate maintenance fees are another issue, so again by talking to local residents and doing research online, you could save yourself a lot of trouble and costs in the future.
Before signing contracts make sure that a comprehensive examination of the land title deed at the Land Office is carried out. It is important to verify that the seller has clear and legal ownership of the land, and that there are no encumbrances or outstanding debts registered against the property before entering into a contractual agreement.
Make sure that you have it in writing that any deposit paid prior to signing contracts is fully refundable.
Checkout other property prices
There are many variables involved when evaluating the price of a property. In general, a buyer should check the prices of other properties in the area to determine whether the property is on sale at a realistic market value.
Properties in Thailand can seem incredibly inexpensive when compared to properties in your home country, but remember that looks can be deceiving as there may be a huge difference in the build quality. Thai construction standards may be lower than you are accustomed to, so take this into account when assessing property prices.
All builds require a building license whether the property is privately owned or part of a development, you must ensure there is a building license available. There is little in the way of planning consent in Thailand – another reason why it is so important to engage with a local lawyer to protect your interests.
The right of servitude basically secures access to the public road. Before buying any property, you should ensure it has unrestricted access to a public road. In many developments the internal roads are owned by the developer, who can block your access if a dispute arises.
In Thailand many properties do not have mains water supplied by the government via pipeline. These properties typically receive their water delivered by tanker from private companies. This water is often dirty, and availability can be unreliable.
Another issue worth consideration is who owns the electricity supply. Again, many developers register the supply in their name and charge residents a substantial mark-up. If a dispute arises, they have the right to disconnect the electricity supply to your property.
Transfer fees and taxes
All property transactions are subject to government fees. A rough guideline for this figure is approximately 6.3% of the total sale price of the property, in addition to annual property taxes.
Make a Last Will and Testament
It is highly recommended that you organise a Last Will and Testament for Thailand prepared in Thailand that includes your newly-purchased property. It is not a pleasant thought to think of your demise, however the last thing you want to do is cause additional stress to your family during this period. Your property in Thailand is a part of your estate once you sign the contract and make an initial payment, hence even before the handover of the property, you will have an asset to consider for your estate planning.
Find a lawyer
Engaging a lawyer is the most important step to protecting your interests in Thailand and should be one of the first issues you deal with when considering living or investing in Thailand.
Always use a local lawyer who is familiar with the area – which may not be the one recommended by your property agent or developer.
Before engaging a lawyer, speak to several law firms for free advice to ensure your interests are fully protected.
Any good lawyer should also be able to assist you with other important issues such as visas, local bank accounts, driving licenses and writing a Last Will and Testament – all of which are essential when living somewhere rather than holidaying.
Use common sense
Remember the old saying, if it appears too good to be true, then it probably is.
Don’t be impulsive and don’t be pushed into buying. Take your time and look around before deciding.
Research is easy these days with the Internet, so use it to your advantage…