Bangkok is a beautiful place, not only for a vacation but also for living a retired life. Irrespective of your age, if you are 30 or 50 years old, Bangkok has something in store for everyone. There is no doubt that most foreigners visit Bangkok and carry home with them fond memories of their travel every single time. However, in recent times an increasing number of foreigners are choosing to live and settle in this vacationer’s paradise.
Can Foreigners Invest In Real Estate in Bangkok?
If you have funds and would like to invest in a piece of a tropical paradise then Bangkok is one of the top 5 places in the world to put your money. However, Thai laws clearly state that foreigners cannot own land in Bangkok or anywhere in Thailand for that matter. However, there are a few exceptions wherein foreigners can invest in certain properties in and around Bangkok as well as the rest of Thailand.
One of these methods is to own a condominium that has the legally mandated 51% minimum share for Thai citizens and 49% maximum share for foreigners. Another viable option is to own a condotel and rent out the property back to the hotel for 11 months every year when you are not using it. Leasing houses built on a Thai developer’s land may also work out but only for a maximum of a 30 years lease period.
Pro Tip – There are dime a dozen blogs on the internet and choosing a reliable source of information is crucial when you are investing in property. The blog post-Top Ways Foreigners Can Own Property in Thailand is a must-read as it has a wealth of information.
Investing In Thai Property With The Help Of A Lawyer
Unlike property laws in USA and UK, Thai property and real estate laws for foreigners are not regulated as much. This translates into possible legal and financial issues that might arise due to choosing and purchasing property without the right information at your disposal. The main reason to choose an efficient Thai lawyer is to ensure that your savings don’t vanish in paperwork, legalities, complications and other possible issues. Having legal aid on your side can also make the entire purchase process less cumbersome.
The process of purchasing Thai property such as a condo with the help of a lawyer is pretty straightforward. These are the steps that are usually taken for all property investment deals.
- Once you hire a lawyer to purchase a condominium, he will take the necessary investigative steps to ensure that the title deed, environment and building codes are all clear.
- After your price offer is accepted by the seller, both parties have to sign a purchase agreement. Either one of the two parties can draw up a standard purchase agreement. This legally abiding paper will mention in detail the purchase price for the condominium as well as a few other important details. These details include which party will be paying for the legal fees, transfer charges if any, property taxes if any, other taxes, and miscellaneous amounts to do with the purchase.
- Once the deposit amount is given to the seller, in most circumstances the buyer isn’t eligible to get the deposit amount refunded if he backs out. The exception to a refund is if the seller backs out due to any reason.
- After paying the minimum 10% deposit fee the contract has to be closed. The normal time frame for closing the contract from the date of paying the deposit fee is usually 1 or 2 months. The contract can only be closed if the balance is paid in full.
- The lawyer will contact the Land Department and register the title deed under your name. At this point, you may be asked to pay the agreed-upon government taxes and fees.
Purchasing a Thai Condominium Unit With Your Own Money
Foreigners can own either 1 or multiple condo units with the prerequisite quota of 51% ownerships should be by Thai owners and a maximum of 49% of foreigners. That being said, the funds that are used to buy the condo need to come from overseas. This means that you need to set up an escrow account or directly transfer the money from an international payment source to your account.
Moreover, the money that has been transferred from an international payment source cannot be in Thai Bahts. You have to convert the money when it reaches you and you finally pay for the property in Bahts. The funds that you transfer from the overseas account should be at the very least, equal to the entire amount you are purchasing the condo for, taxes included.
A very important point to remember is that if you have earned any money while in Thailand then this money cannot be used to buy the condo unit. The only exception is if you are buying the property through Prescribed Investment Through the Board of Investment through a company.
In such a scenario, the property would legally belong to the company and not any specific individual. If you have chosen this option and are choosing to leave the company for any reason then you will automatically be forfeiting your rights to that property.
Failure to adhere to all these points can cause the Land Department officer to reject the title deed application. If all these criteria for foreigners buying condo properties in Thailand have been met then you can register the title in your name, or a person’s name of your choosing. If in case you are planning to purchase a property for either succession or inheritance, then the final will testament, as well as the deed of the condo, has to mention this in detail.
Pro Tip – If you have enough resources to spare and can make a legitimate Prescribed Investment to the Board of Investment then you may be eligible to purchase freeholding Thai Land up to 1 Rai for every 40 million Thai Bahts that you invest. Speaking to a knowledgeable Real Estate agent before investing in this investment perk is a good practice.
Purchasing a Property Through Loans From Thailand Banks
Here is a twist and a fabulous piece of information for foreign property buyers in Thailand who do not want to invest all the amount from their savings. If you are considering buying a condo in a prime area from a reputed developer, and have the necessary work permits as well as all financial documents then a Thai bank may be willing to back up your purchase.
Keep in mind that most Thai banks do not give loans freely to foreigners unless they are patient and there is merit in their application. It is crucial to note that any Thai Bank that gives you a loan for a property purchase is legally obligated to bring the funds from overseas and give you the money. In some instances, this can cost a premium interest or fee rate and you can expect to pay more than a nominal charge for this. Getting a loan from a Thai bank can be more expensive than you initially thought, hiring a good real estate agent for luxury Thai properties such as Silk Estate, can make the entire process smooth sailing.
Pro Tip – While you cannot own a villa, townhouse or a single house on Thai soil as yet, there is an exception to this rule. If you have the resources to purchase an entire building, then the structure is legally yours, although the land on it is not. This implies that you would have to take a lease on freehold property and either build or buy a structure placed on it. Keep in mind that leased properties can be renewed provided all legal requirements are met.
Tax Perks for Foreigners That Own Property In Thailand
If you are the lucky owner of a condominium in Thailand then here is some excellent news for you. As per Thai laws, depending on the chosen condo, you are eligible to pay no to low property tax on your investment. This, however, is a perk that is limited to foreigners who have invested in condominiums. This special benefit does not apply to any freehold property built on Thai land. This includes villas, houses, townhouses and other freehold structures that have been built on the soil of Thailand.
Pro Tip – If you are unclear on the taxes that have to be paid for your purchased condo or if you are unsure about other miscellaneous charges then hiring help is a must! Choosing a real estate agent such as Silk Estate who can guide you and refer you to a lawyer will be a smart move for you. The lawyer may ask you to set up an escrow account with a set figure that will be tied to your property in case of any miscellaneous charges that haven’t been mentioned to you before.
If owning a house in Thailand is your dream then you have come to the right place especially if you do not want to waste time researching the legalities and skimming through hundreds of possible listings. We are here to make your purchase of a Thai home easier!
Consider us as your Thai real estate agent. Contact Silk Estate today for a 100% free no-obligation Thai property consultation call.
You may be interested in this post >>> Your Checklist To Buying a House Abroad after Brexit
You may be interested in this post >>> American Expats Moving & Living Abroad In Thailand