Buyers Guide

A general guide to the property buying procedure in Thailand

Overseas buyers can purchase Thai residential or commercial property without major restrictions.

If you plan to buy land, or a villa then you will be required to setup a Thai limited liability company which will cost around $2,000 and will also have on going fees of approximately $100 per month. Alternatively you will need to purchase through a leasehold agreement, totaling 90 years. Although a freehold title would be of distinct advantage, a leasehold title bears no specific disadvantage to the purchaser. Both forms of purchase are safe and effective means of property ownership by foreigners in Thailand.

Using an Agent
A good agent is essential when you buy a property in Thailand. always carefully analyse your particular investment requirements and provide you with a selection of options from our database. In addition, we will recommend all related professional services you will require to make a safe and reliable purchase.

Appointing a Lawyer
It is wise to appoint a lawyer who is fluent in your language so that you understand properly all the legalities and proceedings. Our International Property Investment Network (IPIN) agents will be able to recommend a good lawyer who can carry out the necessary checks on the property or land in Thailand and complete the legal requirements of the sale.
Lawyers will:
    * Check the current owners have the correct title to the property
    * Check for any charges and liabilities still owed on the property
    * Check your contract and advise you on the obligations for both parties
    * Help you through the payment/funds transfer
    * Ensure that the property is registered appropriately and in your name

The initial purchase agreement will detail price, terms and conditions, settlement date etc. and in most cases a 10% deposit will be required to secure the property. This deposit is refundable should the sale not go through, as long as it is not your fault.

Reservation Fee
When buying a new condominium, an initial reservation deposit of about $1,250 is required and this amount is deducted at a later stage from the total price. Once an agreement is signed, usually 10 to 15 days after the reservation, the buyer is required to pay 10% of the total price. Depending on the terms of the contract, the balance then could be due in installments or as a lump sum at the time the title is transferred

As a general rule, for residential sales you can expect the total fees and taxes to work out to be approximately 2 to 3% of the property market value.
There is a stamp fee of 0.5%, a transfer fee of 2%, a business tax of 3.3 % (levied against an vendor who has been in registered possession of the property less than 5 years), and income tax (similar to capital gains tax) at a variable rate.
There are 2 different types of tax levied on property in Thailand:
1. Land Tax
This is an annual tax levied on land ownership. The amount is often so small that in practice the body charged to collect it rarely bothers to do so. When they do collect it, it is usually after several years when the amount has accumulated.
This only applies to commercially used properties. The rate is 12.5% on the actual or assessed gross rental value of the property. However, this notional value is well below the commercial market rental value.
If the property is purchased through a company, you need to consider that corporate tax is higher than personal tax, and the cost of setting up the company must be considered as part of the initial investment.
Capital Gains Tax
There is no capital gains tax in Thailand and income tax (usually between 1.0 - 3.0%) on property is the comparable replacement.

Mortgages in Thailand are still difficult to arrange. However, recently a new branch of the Bangkok Bank has opened in Singapore, which has opened up borrowing possibilities for property investment in Thailand, financing as much as 70% over 10 years for property purchase. You should expect to get no more than 50% in finance, with the exception to some well-known developments where finance of nearer 70% is available.

HSBC has a presence in Thailand and can offer loans of between 1,500,000 and 35,000,000 Thai Baht. Typically they will lend up to 80% of the purchase price and interest rates can be fixed for up to three years.

To buy a condo or another property with a loan, many purchasers get a mortgage in their home country and then transfer the money to a Thai bank account, while using a lawyer to oversee the logistics of the process.

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