Buying a condominium in Thailand
A condominium is a form of ownership based on the same principles such as strata title, or as it is called in the UK: common hold. A condominium is a development that has been registered under the condominium Act.B.E 1979 (amendments 2008). The condominium act states that there is individual ownership of units and joint ownership of the common areas.
In Thailand a foreigner may not own land in his own name, but he or she may own buildings. Purchasing a condominium in Thailand, as a foreigner is an easy and secure process in comparison with, for example land ownership.
When you buy a condominium there are a number of important checks to make before you proceed to make the purchase, here is a few examples of what has to be checked:
- Title deed, make sure the seller is the owner.
- Check the status of the foreign quota of a building, since foreign ownership may not exceed 49%.
- Check that there is no hidden or upcoming cost before or after the change of ownership.
These are just a few examples of what has to be checked before the change of ownership. It is therefore important to have a lawyer or agent or someone who is familiar with Thai laws and regulations.
Fees and Taxes
When you transfer ownership there is a few fees and taxes you have include in your calculations.
- Transfer Fee
- Stamp Duty
- Withholding Tax
- Business Tax
The buyer and seller sometimes share the fees.
Transfer Funds to Buy a Condominium
When you’ll transfer money, you’ll have to prove that the funds were transferred from overseas in a foreign currency. To do this the funds must be either sent from an account in your name, or received to a Thai bank account in your name. Without such proof, the land office will not permit the transfer. Note this does not apply to foreigners who are legal residents or have resident status, they are allowed to buy in Thai currency.
Renting an Apartment or house in Thailand
When you rent a condo in Thailand it is in most cases required that you pay a deposit. The deposit is usually one to two months’ rent.
Thailand unlike some other countries doesn’t have a tenant deposit protection scheme. A tenant protection scheme ensures that all tenants receive their deposit back from a landlord or letting agency at then end of the tenancy, but only if all utilities are paid and no damage done to the apartment or house. Any unpaid utilities or damages outside of the normal wear and tear will be taken from this amount. If damages are taken out you may request a cost specification from the landlord.
Clarify Who’s Responsible
Clarify in the contract who is responsible for what. In Thailand the landlord should be responsible for repairs beyond normal wear and tear.
The conditions should be stated in the contract when either party has the right to terminate the contract e.g. failure to pay rent, fire, failure to repair etc. Ensure that a reasonable notice clause is added along.
Buying a House in Thailand
Foreigners are by law not allowed to own land in Thailand, but there is a few alternatives how a foreigner can acquire land.
Through a Thai Limited Company
A foreigner can own land through a company provided that 51% of the shares are owned by Thais and the rest may be owned by a foreigner. Through the company the foreigner may purchase land in Thailand. The foreigner can be the sole director of the company meaning that he or she is the only person who can commit or bind the company in any contractual dealing e.g. selling the land. This gives the foreign minority shareholder control over the company.
The company form we recommend is a Thai Company Limited. For setting up a company there is no need of recorded funds from overseas.
A foreigner has the right to lease land in Thailand. The maximum duration of a lease is 30 years, with a possibility to renew for another 30 years. Leasing is the least complicated option to have the right of usage of land.
If you have any questions about owning property in Thailand don’t hesitate to contact us. If you want more information about buying or renting condos in bangkok, you can also visit our FAQ where you might find an answer to your question, or connect right away to one of our agents using our online chat window in the lower right corner.