Advice and answers to legal, tax, rental, leasehold and purchase questions regarding property in Thailand

Before 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 before marrying the foreigner. However, the recent (1999) Ministerial regulation now allows Thai nationals 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 belonged to the Thai spouse before the marriage and are beyond this claim.
 

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.
 

There are no property taxes as such that are exactly equivalent to the property taxes in the West. But the most comparable taxes on properties 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. It is collected by the municipal office or district office and is only applied to properties used for commercial purpose.
 

Whenever a property in Thailand is bought and sold there are four taxes that need to be taken into account (many buyers, especially foreigners, fail to take these into account). In 2001 the government reduced the property tax to 0.11 percent to stimulate the property sector.

However, in December 2003 the Cabinet issued a resolution on property taxes, and from 1 January 2004 the business tax returned to the original 3.3 % rate as a result of the recovery of the property sector. Similarly, the transfer returned to the normal rate of 2 percent instead of the reduced rate of .01 percent.

The following fees are now payable on property transfers:

1. Land registration (Transfer fee) of 2.0% of assessed value of the land.
2. Stamp Duty/Fee of 0.5% of the assessed value or the sale price-whichever is higher.
3. Specific Business Tax of 3.3% of the assessed value or the sale price; whichever is higher. This will be applied to all sales by companies and to any private sales that occur within 5 years of the date of purchase.
4. Income Tax this is calculated on a very complex formula based on the assessed value of the property, the length of time owned and the applicable personal income tax rate. In practice, this will work out to under 2% of the price for low to medium value properties, and up to 3% for higher value properties.

Because of the local system of taxing property on an arbitrary assessed value as determined by the Land Department, rather than true market value, these taxes could amount to a considerable percentage of the purchase price.
Therefore, if you haven't determined during the negotiations that the seller will pay the taxes upon transfer, you could get a nasty shock when a tax bill arrives; often some two or three months after the sale is completed. As in all business transactions anywhere, caveat emptor (let the buyer beware) rules. There are no set rules on who pays for which taxes and it is just another part of the bargaining process make sure you discuss it with the agent and your own lawyer.

 

A condominium is like a flat (apartment) that you can own in common with other owners of units within a high-rise with complete facilities. This means that each tenant is a shareholder in the building and surrounding common property, and they pay a monthly management fee based on the square meter size of their apartment to maintain the building and public areas.

Foreigners may own a condominium freehold; with full rights of ownership.

An apartment is a building owned by one owner who lets out units within the building on a short or long-term basis.

 

A townhouse is a single vertical dwelling in a block of similar vertical dwellings, each owned by one owner.
 

Yes of course! You can call on us any time for help. However, most condominium and apartment building managers speak at least some English and should be able to understand you.
 

If you are renting, most buildings will pay the bills for you and add them to your monthly rent. It is a good idea to find out the cost of utilities before you move in so that you know how much you will have to pay. If you are living in a house, we can advise you on the best methods of payment. For example, most utility bills can be paid direct from your bank account and the receipts sent to your residential address. Nowadays, you can also pay utility bills at any 7/11 store. When buying, you should also inquire about telephone and electricity connection fees.
 

Thailand has an enviable reputation as a very safe place to visit and to live. The people are friendly, and there is relatively little crime against foreigners. However, like anywhere else in the world, there is always the potential for crime.

If our agent feels an area you visit is not safe, he should advise you and suggest alternatives. We all want you to enjoy your stay here!

You have probably read the recent news about the Muslim unrest in the three southernmost provinces. The government is working to solve this problem. Despite the rhetoric of a few Muslim hot heads, relations between Muslims, Thais and foreigners throughout Thailand have always been friendly and tension-free. Knowing some of the people involved in security work in the Kingdom, we are confident that Thailand will continue to remain a safe and pleasant country to live in.

 

There are plenty of fully furnished apartments and condominiums available. If you don't plan to stay in Thailand permanently, it may be better to leave your furniture in storage back home. It will probably be too heavy for the tropics anyway. Even if you plan to rent or buy a house, you can always get one fully furnished. If you prefer to furnish it yourself, your agent can advise you on the best places to shop.
 

In the bad old days floods were a problem every year. Some years were worse than others. But since the Bangkok government has installed anti-flooding measure, flooding is not a big problem in Bangkok any more. The drainage system has been upgraded and is well maintained so that even the worst floods will drain away within a few minutes...hours if we have a particularly heavy downpour. If you plan on living outside Bangkok your agent can advise you on the best places to live to avoid the problem.
 

As fast as possible. We will prepare a list of properties that have the features you are looking for after we discuss your needs with us.
 

Most rental periods are for one year, although some shorter terms are available. In most cases you will need to pay a 2 month deposit, and one month rental in advance when you sign the contract. Sometimes, especially for longer contracts, the landlord may require 3 months deposit. The deposit is refundable when you move out, although the landlord may deduct expenses for any damage to the property during your tenancy.
 

If you plan to stay here for more than 1 year and you have never been here before, we recommend you take a cross-cultural seminar that will explain the many strange and different things you will encounter in your daily life.
 

There are a number of possibilities. Our lawyers, Barristers & Solicitors Co., Ltd, will be able to advise you on the best solution for your needs. The following briefly explains the various ways to own property in Thailand:

1. Leasehold: Thai law allows a maximum lease period of 30 years, with the possibility to extend for a further 30+30 years. At the end of each term, both parties must register the renewal with the Land Department and pay government fees, including stamp duty. This gives the lessee "ownership" of the land. The downside is that the Lessor may not wish to renew, or the law may change to your detriment in the future. Any capital you invest into leased property is therefore liable to be lost. In addition, leased land is not easy to trade.
2. Nominee: You can nominate a Thai to own the property for you. Definitely not recommended.
3. Nominee with a mortgage: You can lend the price of the property to a Thai under a legally executed mortgage or loan agreement. There is a small fee payable at the Land Office to register it. The advantage to this is that the nominee cannot sell the property until the mortgage or loan has been repaid in full. Our lawyers will also set up a Last Will & Testament when they set up this type of transaction so that if the foreigner dies first the mortgage or loan is discharged in full and the Thai can inherit the property. If the Thai nominee dies first the foreigner can inherit the land, but must sell it to a Thai within 12 months. We always recommend that foreigners buying property in Thailand also write a new will to avoid any future problems for the Executors and Beneficiaries.
4. Freehold: Foreigners can buy and own condominiums Freehold, giving you full ownership rights to buy, sell, trade and bequeath your condominium. However, the law states that foreigners may only own up to 49% of any condominium building. So make sure your lawyer checks this before buying a property. The seller must also provide a document from the Juristic management office stating that the condominium is free from all debts.
5. Company Ownership: We recommend setting up a company when buying a house, land, or other property that is not a condominium. Our lawyers can help you do this and ensure that you control the property without interference from your nominee Thai partners.

 

Although the law does not allow foreigners to own land in Thailand, they can own the buildings on the land. However, there are exceptions:

1. A foreign company may buy land if it has Board of Investment (BOI) privileges and the land is part of the project (usually manufacturing). Ownership is tied very strictly to the BOI terms and conditions agreed with the company.
2. A new law (Land Code Section 96, 2002) allows a foreigner to buy up to one Rai (half an acre) of land to build a house in approved metropolitan areas like Bangkok and Pattaya, providing they also invest at least 40 million Baht for five years in government bonds, recognized property mutual funds or BOI projects. Permission for this must be obtained from the Interior Ministry and the ownership is monitored by the Land department.
3. Companies and partnerships also fall under the strict laws on land ownership by foreigners. A foreigner can only own up to 49% of a company and this restricts the ownership of land as well. It is often difficult for even a company with 51/49% ownership unless you use an experienced real estate lawyer. This is why Bangkok Property Agents recommends Barristers & Solicitors Co., Ltd to all our clients. The Alien Business Law does not allow foreigners to engage in "land trading".



 

Until recently foreigners could not get a mortgage on property in Thailand. This has changed since August 2005, and some overseas financial institutions have set up shop to offer special deals to foreigners, including direct personal loans to buy property, mortgage loans on property owned by the applicant in Thailand or overseas. These companies will allow you to mortgage your overseas property and bring the money into Thailand to buy property.

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 over 10 to 24 months. After the down payment has been paid, the sale contract will be made and the balance is paid through a loan which is financed from a financial institution. The financial institution requires you to mortgage the property with it as collateral against the loan.

Bangkok Bank in Singapore is now providing home loans to approved customers in a number of currencies, British Pounds, Japanse Yen, Singapore Dollars, Euros and Hong Kong Dollars.

Bangkok Property Agents is happy to help facilitate your loan application through Bangkok Bank, Singapore for a fee of 1.0% of the loan amount.

 

When you rent an apartment, you sign a Lease. Typically, a lease is for a minimum 12 months in Thailand, although some landlords may consider a shorter or longer term. When you sign a lease, you are required to pay a 2 month deposit which is refundable when you move out, less any charges for damage to the property.

There are 2 types of Land Title Deed: Freehold and Leasehold. Leasehold means that the buyer is only leasing the property from the land owner for a pre-determined period of time. Thai law stipulates that a property sold with a Leasehold title deed is only valid for up to 30 years. Renewal for a further 30 years only is at the discretion of the lease holder (land owner). Property owned by the Crown Property Bureau is always Leasehold. Some private property owners may also sell their property with a leasehold title deed. These are the conditions in operation today (2006), but they may change at any time in the future. Obviously, buying leasehold property has its drawbacks.

A Freehold Land Title Deed, on the other hand, gives full ownership rights to purchasers, including the right to buy, sell, or lease the property, pass it on to their heirs, and to develop the property within the guidelines under Thai law. Foreigners may own a condominium freehold; with full rights of ownership. You should always consult a qualified real estate lawyer before signing any purchase agreement.Here we recommend Barristors And Solicitors Co.,Ltd. Please contact us for contact details.

 

You can apply for a visa, depending on the type of residency laws you would like to stay here under. For example, if you plan to buy a property and run a business, you can apply for a business visa. Or if you plan to retire you can apply for a retirement visa. The answers to this question are far too complex to go into here. We recommend you talk to your lBarristers and Silicitors Co., Ltd about this before buying any property,please contact us for their details.
 

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

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

 

Bangkok Property Agents will help in your decision on where to live based on your requirements.
 

Thailand offers a wealth of sports, including golf, trekking, para-gliding, diving, fishing, golf, squash, jogging venues, and so on. Serviced apartments and condominiums usually have their own exercise rooms and swimming pools. Bangkok Property Agents have a good knowledge of the buildings and will be able to show you properties that meet your requirements.
 

Bangkok boasts some of the best international schools in the region. Fees are high, but so are their teaching standards. In addition, there are some excellent private Thai schools. You will be able to see through the search engine on the Bangkok Property Agents website which schools are located in the area you would like to live.
 

Only if the rental contract is shorter than one year, then we charge the eqivalent of one half months rent. Otherwise the seller or lessor will pay our fees.
 

The procedure for buying a condo is extremely easy. The first step is to select the property you want to buy and ensure that it has a Chanote (or at least a Nor Sor 3 Gor) freehold Land Title Deed. Bangkok Property Agents will negotiate the best possible price for you and the seller. When you have agreement, ask for a copy of the Land Title Deed from the seller. The buyer pays for the lawyer's fees. The seller (usually) pays the transfer fees and taxes, as well as our commission. Then follow these steps:

1. Visit your lawyer (we recommend Barristers and Silicitors Co.,Ltd.) with the seller and Bangkok Property Agents where we will lay out the terms of the deal, and give the lawyer all the documents, including a copy of your passport and bank account details from you, and the land title deed. At this stage, you may be asked to give a deposit to the seller, usually 20% of the purchase price. You will be issued with a receipt that states you will forfeit the deposit if you pull out of the deal for any reason. The seller should be required to repay your deposit in full plus 50% if they pull out of the deal for any reason, or if the land title deed does not clear at the land office. Your agent should ask the seller to allow the lawyer to hold the money in escrow until the deal is completed. Once these arrangements are made we can leave the rest of the work to the lawyer until you are ready to sign the sale papers and pay the purchase price.
2. The lawyer will prepare a Sales and Purchase Agreement ready for both parties to sign.
3. The lawyer will send one of his staff to the land office to check that the land title deed is free and clear from any encumbrances, debts, etc. He will advise if there are any problems with the title deed.
4. Meanwhile, Bangkok Property Agents or your lawyer will take you to the bank to open a bank account if you don't already have one. New restrictions have been imposed on foreigners opening bank accounts in Thailand, but your lawyer should be able to help you overcome these legally.
5. You will transfer the full cost of the condominium to your bank account, less any deposit you have already paid.
6. The lawyer will accompany you to the bank when the money arrives to work with the bank to get the proper paperwork required for a condominium purchase.
7. The lawyer will call another meeting when everything is ready to conclude the deal. You normally meet at his office, sign the papers, and hand over to the seller the cashier's cheque (or money in whatever form you are paying).
8. When this is done the lawyer will accompany you and the seller to the land office to complete the transfer of the land title deed to you, the new owner. This should only take a few hours, but it could take up to 4 or 5 days in some circumstances. Don't worry. Once you and the seller have signed all the sales and purchase papers and handed over the money the property is legally yours and you are fully protected under Thai law.