Thailand is a fantastic country and comes with a wide variety of properties for you to choose from.
This guide is to assist you in your buying process.
Why invest in property in Thailand?
Everyone has a different purpose of purchasing a property, so its’s very important to ask yourself in what type of property you wish to invest in. Some are planning to buy for Investment and generate rental income and capital appreciation, others would like to buy for their own residence or Retirement home or office.
The main factors on your decision would be:
- Location of Property
- Accessibility to public transportation (BTS/MRT)
- Unit Size
- Proximity to Amenities
What Type of Ownership Structures are there?
In Thailand there are 2 types of Ownership Structures:
- Freehold Condominiums
- Leasehold Condominiums
Freehold ownership offer absolute (100%) ownership of the property and is the best form of ownership for Foreigners. Foreigners can maximum own 49% of the total floor area in a condominium building, the other 51% have to be owned by Thai Nationals, therefore it is very important to check the foreign quota in a building before purchasing.
Leasehold ownership is another option for Foreigners to own a property for maximum 30 years. Foreigners can register the leasehold rights (Lease of Condominium or freehold land) with the district Land Office. After 30 years the lease term can be (most likely) be renewed again.
How does the buying process work?
1) When you find the condominium you wish to purchase, a reservation agreement will be made up between Buyer and Seller to secure the Booking of a unit. The buyer will give a copy of his National Passport and make a down payment deposit. (The Amount of Deposit is for each project different)
*For Foreign Buyers who have purchased properties in the past, it is important that the buyers name in Thai is exactly the same as the name used for previous purchases.
*The Seller will show the title deed to the buyer in order to proof that he/she is the legitimate owner of the condominium unit together with a copy of her ID card.
* The buyer should also request to see a copy of the Tabien Baan and to check whether the seller registered the condominium unit as its personal registered address. If it is the case the seller will have to move its registered address out of the condominium unit.
2) Sale & Purchase agreement.
The second step is that a Sale and Purchase agreement will be made up. Herein is written the sale and purchase price, the amount of the deposit which have been paid (Between 5-20%) and costs of transfer including taxes, between buyer and seller.
* Usually transfer fees and Stamp duty are shared (50/50) between the seller and the buyer but depending of the outcome of the negotiations the seller or the buyer may be liable for 100% of all costs and taxes.
3) Transfer of the Funds.
To purchase the condominium, the foreign buyer will have to prove that the total purchase amount, declared at the land department, is to be paid out of foreign currency transferred to Thailand by the foreign buyer.
How can I prove that the money comes from Abroad?
It is necessary that foreigners present a source of funds declaration and documentation to the land Office when registering ownership. When you either Transfer money or bring a foreign Currency into Thailand valued at USD 50,000 (Or equivalent in other currencies), The Bank will issue a Foreign Exchange Transaction Form.
*If you bring the money in cash into Thailand, you need to declare it to the customs officer and present a receipt from the customs to the Bank in order to issue a confirmation letter.
Please keep in mind that when you transferring funds from a foreign currency into Thailand, That the name of the beneficiary in the Foreign Exchange Transaction Form MUST be the same as name of the Buyer, specified in the Sale and Purchase agreement.
*The Total amount of transferred funds must not be less than the net price (Thai Baht) of the Condominium unit as specified in the Sale & Purchase agreement.
* Please clearly specify the purpose of the transaction as “to purchase a condominium in Thailand”.
The last information you need to know for transferring the payment to Thailand is:
- Bank Name
- Bank Account Name
- Bank Account Number
- Bank Branch and address
- SWIFT CODE
- Purpose of Funds transfer (Purchase of a condominium in Thailand)
4) Documents for Transaction at Land Department
*The buyer has to provide a copy of his passport (Including the page with visa stamp)
*Copies of the buyer certificate of marriage and of the passport of the spouse. (Marriage certificates in English language do not need to be translated, other languages need to be translated and the translation need to be certified)
* If the seller does not have a lawyer, the buyer Broker/Agent should remain the seller to obtain the letter from the juristic person attesting the foreign ownership ratio (Foreign Quota) and that the common area fee for the units has been fully paid.(No Due Certificate) Without this document the transaction may not proceed. If the seller is late with the payment of its CAM Fees the seller must clear the debt before the sale being able to proceed.
* The seller shall request his/her bank to issue the Foreign Currency Exchange forms that will serve to prove that the sale and purchase price is paid out of foreign currency transferred to Thailand
* If the unit is mortgaged the seller must contact the bank that hold the mortgage and request the bank to calculate the final amount due to clear the mortgage and send to an officer at the land department on the date of the transaction to clear the mortgage prior to the transfer.
5) Prepare the Payment at the Land Department
* The Buyer and/or the Seller will pre-calculate the amount of taxes to be paid at the land department office on the date of the transfer of ownership.
* The Buyer will prepare cashier cheque equivalent to the amount of the net purchase price.(Taxes and expenses not included)( If the unit is mortgaged and it is necessary to pay the bank the buyer shall prepare a cashier check equivalent to the amount of the debt to be settle to the bank)
* Once received the cashier cheque, the buyer will send the copies of the cheque to the seller and/or his bank to give them the opportunity to verify with the issuing bank that the check are indeed real.
* The Seller and/or the Buyer must prepare in cash the amount necessary to pay the taxes and government fees due on the date of the transfer.
6) Transfer at Land department
*The Buyer, Seller and the Bank (if the unit is mortgaged) or their authorized representative must all attend the Land Department on the agreed date of the transfer. If one party is missing or not represented the transaction cannot go ahead.
* The buyer representative will shows the original cashier cheque to the seller and or the bank representative (to release the mortgage on the unit)
* The seller and the buyer (Or representatives) will sign the sale and purchase form prepared by the land officer and the documents required for the transfer of the unit (Original duplicate of the title deed).
*The Land Officer will change the original duplicate of the title deed and will give it to the buyer (or representative) mentioning the name of the buyer as the new owner of the unit. Both parties (See agreement) will pay the taxes and costs due for the transaction to the Land Officer.
Note: It’s the seller’s duty to prepare the documents for the transfer of the electricity and water meters to the buyer. The buyer will have to refund to the seller the deposit paid by the seller to the electricity authority if this matter was not included in the sale and purchase price.
If you still have questions or concerns after reading the information above, please feel free to contact the property agent Amazing Properties, they would be able to answer your questions.