- Purchase property in Thailand (Process)
- Foreign property ownership in Thailand
- Financing for real estate projects in Thailand
- Required Documents
- Title Deeds in Thailand
- Can my Thai wife / husband own the land?
- Buying property in Thailand through a Thai company
- Thailand real estate related taxes and fees[/learn_more]
Process of purchasing property in Thailand
Buying a property in Thailand is not as difficult as in many other countries worldwide and it is quite easy to prepare the required documentation for a ownership transfer. Usually it only takes 30 to 60 days to complete a purchase. Once a suitable property has been inspected and chosen and the surrounding area has been thoroughly checked, the seller can be asked to prepare the papers for a purchase. It’s the decision of the buyer if he prefers to deal directly with the owner or let an agent handle the process. It is recommended to use an agent if the owner doesn’t have experience selling and transferring land. Both parties then have to agree on a price before a lawyer should be hired. Siam Quality Assets can recommend lawyers or even agents that will do the preparation of paperworks and contracts. It is important that your interests are managed independently and it is not recommended to do the process without a lawyer. Your lawyer will check the contract or draw up a contract, check the land borders and the documentation of the land and/or property. If everything is in order, the contract can be signed and a deposit usually has to be paid. The amount usually ranges between 10 and 30 percent and the contract will in most cases specify that this amount is forfeitable if either party fails to complete the transaction. The contract will also specify at which the time the balance has to be paid. Most of the times Siam Quality Assets will request payment within 30 and 90 days, though we can agree in longer time frames too. As we are the owner of all land promoted on our websites, the buyer can also pay in stages over several months or even years. On the date specified in the contract both parties or their respective lawyers will meet at the local land office to put the new owner’s information on the land title of the land. The transfer of the remaining balance has to be made on the same day. Depending on where you purchase a property the transfer process can take quite some time. On Koh Phangan however, we will make sure that the entire process won’t take longer than 60 minutes. (Back to top)
Foreign property ownership in Thailand
There are restrictions for foreigners who plan to purchase property in Thailand. Besides Condominium units, land and properties can’t be bought freehold in a foreigner’s name. If you wish to buy land or house in Thailand you have three options. These are:
- Lease the land or house. Leases can run for up to 30 years and can be renewed for up to 2 times. That means although you don’t really own the leased object, you will gain control of it for 30-90 years.
- Form a company and buy the land or house in the name of the company. The company then will grant you access and the right to stay in the property. 51 percent of a Thai company has to be owned by Thais but as a director you can obtain majority rights even though you are a minority share holder. Please note that the company owns the property (not you). A company can be set up by a lawyer or sometimes by the owner’s legal experts. (Siam Quality Assets does not support this type of ownership unless you are really doing some kind of business, though we accept buyers to purchase this way if they take care of the process by themselves). In many cases the Thai shareholders will not be chosen by yourself. In this case, it is advisable to keep track of the nominees and make sure they are not involved with any other party of the property deal. (This would be illegal but has been done before many times).
- You might also find a Thai national and let him or her buy the property. Obviously you won’t own the property as it is owned by your Thai partner. However you can draw up a legal document in which the Thai person leases the land to you for 30 years + two renewal periods. Make sure the contract makes clear that all money for this lease has already been paid in advance and that the lease is registered at the land office. (Back to top)
Financing for real estate projects in Thailand
It is almost impossible to obtain financing in Thailand as a foreigner but some foreigners with work permit and stable history of employment in higher position as well as a high deposit might be able to get a mortgage from a Thai bank. In most of the cases Thai banks will only provide loans for the purchase of condominium units. Another option might be owner-financing: Some owners and developers offer payment in instalments and will charge interest comparable to current bank rates. When buying land with Siam Quality Assets, we offer you interest-free payment in instalments for up to one year and for more than one year with interest comparable to current bank rates. Thai nationals can apply for a loan although the requirements are usually more strict than in many Western countries. It will be difficult to obtain bank financing for more than 60 percent of the purchase price and the individual will have to present a stable backdrop, stable employment history and pay slips. (Back to top)
Buy land in Thailand: Required Documents
Required documents that you will need when purchasing property in Thailand are the title deed of the property (Chanote), copies of your passport as well as the passport of the seller and the lease or purchase agreement. (Back to top)
Title Deeds in Thailand
As a foreigner, buying land with title deeds called Chanote (Nor Sor Sii Jot) or Nor Sor Saam Gor can be considered safe. Land with these papers has been properly surveyed and its area and boundaries have been confirmed by using GPS or conventional measuring tools. These properties can also be cut into smaller land plots. Other land documents don’t confirm the ownership of land and it is not safe for foreigners to buy land with these documents. All properties for sale by Siam Quality Assets have either Chanote or Nor Sor Saam Gor titles. (Back to top)
Can my Thai wife / husband own the land?
Buying property in Thailand through a Thai company
Thailand real estate related taxes and fees
The Thai property tax system is based on the assessed value of the land, which is determined by the local Land Department, rather than the true market value. The lease or freehold contract will specify who will be responsible for these taxes. Taxes for selling and buying property in Thailand are:
- Transfer fee / land registration, 2 percent of the assessed value of the land.
- Stamp duty, 0.5 percent of the assessed value or the sale price (which ever is higher)
- Business tax of 3.3 percent of assessed value or sale price (whichever is higher). For all sales by companies and private sales within 5 years of the date of purchase. Please note that all land promoted by Siam Quality Assets is owned directly by the company owners, not the company!
- Income tax: between 2 and 3 percent depending on the price and value of the property as well as how long the land or house has been owned and some other factors.
While owning a property, the owner has to pay land tax and building usage tax. Building usage tax is collected by the municipal office or district office and only has to be paid for commercial properties. The land tax is a small amount and in many districts the authorities don’t even collect it or wait several years until a noteworthy amount has accumulated. (Back to top) [note color=”#FFCC00″] Are you missing any information? Please contact us and we will provide you with any further information you might need! [/note]