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Learn more about a foreigner buying a condo in Thailand
Foreigner buying a condo in Thailand is an attractive option for many foreigners. Although Thailand’s property law prohibits foreigners from owning property in Thailand, at least condominiums can be purchased, as the condominium law places fewer restrictions on citizenship.
Table of Contents
◊ Navigating the Condominium Buying Process in Thailand as a Foreigner
Embark on a comprehensive journey through the multifaceted process of buying a condominium in Thailand as a foreigner. This section aims to unveil essential insights, practical advice, and legal considerations that every foreign investor should be armed with to navigate the Thai real estate landscape successfully.
Navigating Legal Restrictions: A Foreigner’s Guide
Explore the specific legal restrictions that foreigners must navigate when purchasing a condo in Thailand, including property laws and financial regulations, to ensure a smooth and compliant transaction.
Cultural Considerations in Real Estate Transactions
Discover how cultural aspects can influence the condo purchasing process in Thailand for foreigners, and how to successfully navigate these cultural nuances to foster positive relationships and transactions.
The Role of Real Estate Agents for Foreign Buyers
Understand the significance of selecting a reliable and knowledgeable real estate agent in Thailand, and how they can facilitate and simplify the buying process for foreign investors.
Evaluating the Right Location: Tips for Foreign Buyers
Gain insights into evaluating and choosing the right location for a condo in Thailand, considering crucial factors such as proximity to amenities, security, and potential resale value.
Understanding Maintenance and Management Fees
Explore what foreigners need to know about maintenance and management fees when purchasing a condo in Thailand, and how these fees can impact the overall investment and living experience.
The Resale Process: What Foreigners Should Know
Uncover the essential steps and considerations for foreigners when reselling a condo in Thailand, including legal and financial implications, to ensure a successful and profitable resale process.
◊ Understanding Condominiums: A Foreigner’s Perspective in Thailand
A condominium is categorized as a piece of property contained in a multi-unit structure surrounded by common areas. It is usually built in the style of an apartment which, unlike rental apartments, is owned. All owners of independently owned units are also co-owners of the common areas, including hallways, corridors, swimming pool, gyms, laundry rooms, elevators, and other utilities. For a foreigner, it is vital to understand that such a purchase entails specific legal aspects.
◊ Legal Framework: Foreigner Buying a Condo in Thailand
In Thailand, condominiums can be classified as comprising condominiums registered in accordance with the Condominium Act and classified by holding a condominium permit and not being ‘qualified’ under the Condominium Act. The classification identified that those condominiums registered with the Condominium Act and classified registered by the MLA shall contain full private ownership and government issued the title . For example, the Condominium Act will guide on how a condominium is converted to a condominium which is based on procedures and requirements.
◊ Procedure Simplified: A Foreigner’s Journey to Buying a Condo in Thailand
Section 19 of the Common Property Act stipulates the ownership of a condominium by a foreigner or legal person recognized as an unjust foreigner. The conditions are as follows:
The foreigners have the right to reside in a country under the Immigration Act
The right to enter the country under the Investment Promotion Act
The person has been legally registered under the Thai law
Legal persons are notified as foreign parties by the State Executive Council and have received a certificate of sponsorship under the Investment Promotion Act. Legal persons who receive a guarantee certificate by the Promotion Act shall be declared liable
Couple or who are considered foreigner or legal person and has brought foreign currency in the Kingdom of a partner or sells in a Thai bank account of a certain person, or who is to bring the money back. Kingdom of Thailand Foreign currency account
- The law provides that Section 19 applies to foreigners.
- Under this section, the price of the house must be transferred to Thailand in a foreign exchange bank and converted into Thai currency at the bank in question.
- A foreigner shall be deprived of the right to finalise a property owner in the buyer’s name and shall report the allocation to an immigration office under law.
- Any foreigner can not own the entire condominium. The only time a foreigner can own an apartment is when they apply to register the foreign share and the foreigner can only own up to 49% of the apartment available.
- When it comes to buying a used condo or a condo, the seller must prepare a certificate for the condo association which is part of the 49% of the house in question. This does not apply to condos that sell to construction sites and the certificate will be obtained by the notary if there is a condo.
◊ What is the procedure for buying a condominium in Thailand as a foreigner?
To buy a home in Thailand, the following steps must be followed:
- Step 1: Initial due diligence
- Step 2: Financing options
- Step 3: Reservation agreement
- Step 4: Purchase contract
- Step 5: Transfer of overseas funds
- Step 6: Payment and transfer of title to the landowner
- Step 7: Obtaining the blue book
- Step 8: Make a will
For a foreigner buying a condo in Thailand, it’s essential to understand these aspects and the legalities involved in the purchase process.
◊ Essential Documents: What a Foreigner Needs when Buying a Condo in Thailand
For purchasing an existing or resale condominium, the seller should provide the certificate from the corporate co-owner that the condominium complies with the 49% foreign ownership quota and no participation fee has been paid from the seller to the corporate co-owner. Moreover, the other documents required for the transfer include FET form, nationality identity card or passport, marriage or divorce certificate , and Tor Dor 21, the land office power of attorney of the housing authority to transfer such of ownership.
Foreigner buying a condo in Thailand should provide a passport copy, proof of fund transferred from overseas, a sale and purchase agreement, and a condo ownership certificate . In addition, Foreigner must get Foreign Exchange Transaction Form, certified to transfer fund and present evidence where such fund came from. Finally, Foreigner needs to get an acquirement from government authorities such as Land Department and Condominium Juristic Person.
◊ Financial Considerations: Insights for a Foreigner Buying a Condo in Thailand
According to the 1991 Condominium Act, non-residents purchasing a condominium in Thailand must remit funds in foreign currency from abroad to pay for the condominium.
The buyer must obtain a “Foreign Exchange Transaction Form” from the receiving bank for each payment. However, if the foreign buyer is a Thailand permanent resident, he can purchase the house in Thai Baht and does not need a “Foreign Exchange Transaction Form.”
In addition, Thailand non-residents must submit these certificates to the Land Registry Office for condominium registration. When transferring funds to Thailand, the buyer must indicate in the instructions that the purpose is to purchase a condominium. The Buyer must obtain a certificate from the bank once the fund arrived in thailand and has been convert in Thailand by his Thai Bank.
Funds do not necessarily have to come from abroad without an agreement when a foreigner buys a condo in Thailand. The source of funds can come from both local and foreign sources, subject to rules and regulations set by the Bank of Thailand. Contact a lawyer well-versed in Thai property law and banking procedures is recommended to make the transfer and purchase process smoother. Ensuring that all necessary taxes and fees are paid promptly and in compliance with Thai law is also essential.
For a foreigner buying a condo in Thailand, it’s essential to understand these aspects and the legalities involved in the purchase process.
◊ Can foreign companies own a condominium ?
Foreign companies can register up to 49% foreign ownership like foreign individuals. The purchase process requires preparing, notarizing, and translating the company registration documents, which it must submit to the Land Registry with the foreign currency transaction forms and other documents.
◊ Can you buy a condominium with my Thai spouse ?
If the condominium is registered as a condominium in the Thai wife or husband’s name, it is always considered full ownership of the condominium abroad. A condominium purchased by a Thai citizen and a foreign spouse is considered 49% foreign ownership unless legal proof is that the money used to purchase the condominium is property. Personal data of Thai nationals. In this case, the condominium belongs to a part of the Thai side.
◊ Can you buy a condominium on a plan ?
The most typical experiences that foreigners have when they are purchasing a condominium in Thailand are either the developers go broke or run out of money to complete their project or it takes much longer time to complete or even finish. What typically happens is a real estate project is not planned, and the developer during construction places all the money from the sales contract in a bank account, not in a reliable third party escrow account. In Thailand hardly ever escrow arrangements are used and it gives developers complete freedom to ask customers for any pre-payments or deposits that go without any protection or insurance. This means that the buyer usually takes some risk and it is not advisable.
◊ Due Diligence: A Crucial Step for Every Foreigner Buying a Condo in Thailand
The contract of sale of a dwelling states the obligations of the buyer and home seller, the agreed price and payment schedule, the date of transfer, the exact details of the condominium, transfer fees and tax obligations, warranties, and due diligence issues. This is a contractual act, so a standard sales contract should comply with condominium and consumer protection laws. The transfer of title takes place at the province or municipal land office. At the time of transfer, the respondent should sign a second formal sales contract with the Thai Ministry of Land and Transport and to pay transfer fees and taxes.
◊ How is the condominium rent paid ?
If the existing condominium pays when the condominium is transferred to the Land Registry by bank cheque, then the cheque must be issued and guaranteed by a bank in Thailand, which is the same bank that issued the FET form. If the condominium is not in the plans, the pay is done in installments to the Thai developer’s bank where the last installment happens at the handover time.
Any foreigner buying condominium apartments must keep to the schedule of payments during the construction of the project and all the payments indicated in the sale contract are always transferable. The most usual forms of payments are 10-20% of the value reflected in the purchase price at the time of signing the sale agreement and the rest of the percentages must be paid to the bank in construction on a periodical monthly basis. The last payment which is less than the purchase price of half the apartment is paid to the developer once the property is completed and registered.
◊ Can you get financing to buy a condominium in Thailand ?
Unfortunately, it is improbable that a foreigner can obtain a loan from a Thai bank to buy a property in Thailand. To overcome this problem, international banks provide loans to Thai customers overseas.
◊ What rights and fees apply to transfers ?
The accommodation transfer in Thailand is based on several taxes and fees. These include transfer tax , stamp duty, withholding tax, as well as certain consumption taxes, if applicable . The distribution of these costs at the time of resale between the buyer and the seller depends on the provisions of the sales contract and is fully or partially paid by the buyer or the seller. Thus, when buying a new dwelling, the seller (builder) can only charge half of the 2% land development charge from the buyer under the Consumer Protection Act.
There are no general property taxes in Thailand. However, local taxes, land tax, and housing tax are not significant and do not apply to apartments. There is a more general annual tax rate of 0.1% of the estimated value if the dwelling is designed for residential use.
◊ Do you need a certificate ?
Foreigners must obtain a condominium ownership certificate when buying a condo in Thailand. The Condominium Registrar at the Land Department issues this certificate to confirm the foreigner’s ownership of the condo. It guarantees that the registration of the foreign owner complies with the Thai law imposing a foreign ownership quota, which starts with 49% in most condominium projects. You must have this document in your possession to avoid running into any complications in the course of your condo ownership and, eventually, its resale.
◊ What should you do if you already own a home ?
If you are a landlord you have rights and obligations. Condominium ownership is governed externally by the by-laws and the Condominium Act. . Each condominium must have at least one manager appointed by the condominium assembly. Each condominium must also be maintained and managed.
Condominiums may have special reserve funds for building repairs and improvements. There is no information to hand about the placement of this money. The amount of condominium maintenance and reserve funds and need for significant repairs may increase the financial burden on the condominium that should be considered before purchase.
Each condominium receives a “house book” or “blue book.” This is the immediate municipal directory. It shows the location and address of the condominium where the legal residence in Thailand is registered. The housing register is not an essential document for foreigners: it is registered: the foreigners are only registered when they are in Thailand.
The tax will be payable to the Land Office at the time of transfer when the property is resold. This includes the transfer fee, the selling or stamp duty and the income tax. Upon receiving the land office tax certificates, the Condominium sale documentation, and the proof of the previous transfer of the foreign currency to Thailand, the banks may transfer the whole amount of the sale of your Condominium outside Thailand without deductions.
◊ What are the taxes ?
Foreign nationals investing in real estate in Thailand must contend with 3 taxes totaling as much as 6.3 % of the purchase price, though the exact amount depends on individual circumstances. The sliding-scale Transfer Fee paid to the Land Department for transferring ownership varies according to the property’s worth. At closing, buyers also settle a non-negotiable 0.5 % Stamp Duty based on the listed value.
Then the Withholding Tax, deducted from the seller’s end, taps one percent of the price if a corporate entity unloads the property, or just half a percent for a private owner hoping to make a profit off the sale. While expat home buyers shoulder a significant tax burden, savvy investors recognize the market remains lucrative despite these costs, which primarily fun for infrastructure and help keep the property apparatus functioning.
◊ What does the law say about condos and foreigner buying condo in Thailand ?
The complex and nuanced laws regarding foreign ownership of condominiums in Thailand necessitate scrutiny. While internationals can secure sole rights to apartment units, various stipulations circumscribe this liberty. No more than 49% of a structure’s aggregate living quarters may be possessed by non-nationals. Documentation must also validate the importation of foreign currency applied to the purchase and acknowledgement from Thailand’s central bank confirmed. Moreover, leasing units to tenants is banned without first acquiring the proper hotel authorization if desiring to utilize the property for commercial ends. Region to region, interpretations of these statutes can wax and wane, demanding expatriates to depend on specialized legal counsel well-versed in navigating the litigious intricacies of real estate acquisition across borders.
◊ What is a condominium purchase contract ?
A condominium purchase contract solidifies the sale of a Thai condo unit from a developer to an expatriate buyer. Within its clauses, key deal points are established such as the full payment total, installment schedule, unit specifications, and any assurances. Legally, the contract must adhere to Thai statutes limiting alien real estate holdings. Before putting their signature on the form, overseas purchasers are encouraged to get counsel from a lawyer and closely examine the small print to safeguard their rights under this binding transaction.
◊ What is a condominium sales contract ?
A condominium sales contract in Thailand legally binds the foreign purchaser to the local developer or owner of the property in question. Within this document, myriad details are delineated pertaining to the financial elements of the transaction along with a designated transfer timeline and any contingencies. It is imperative for non-nationals to judiciously pore over and comprehend the entire agreement prior to appending their name, as Thai real estate law contains specific stipulations concerning alien control and conveyance of condo units. Retaining legal counsel to evaluate and possibly rework the contractual language could help guarantee fairness for the buyer while simultaneously protecting their interests. Varied clause composition and verbiage complexity are intentionally employed throughout.
◊ Why is due diligence essential for a foreigner buying condo in Thailand ?
Due diligence before purchasing property in Thailand is crucial for a foreigner buying condo in Thailand to navigate the country’s legal complexities regarding land ownership. Careful investigation into the seller’s documentation and condo ownership status can confirm everything is in compliance and reduce future disputes, fraud risks, or financial setbacks. Diligence in ascertaining all stipulations and conditions governing foreign possession also illuminates any constraints that buyers must abide by.