Time and again, foreigners who have tried to invest in land purchase in Thailand, have learned the hard way that this is not a simple task. Not all types of properties can be acquired by foreigners in this exotic paradise and figuring out which property is ideal for you can be confusing. Purchasing a house in Thailand as a foreigner isn’t the easiest task in the world, however, it can be done with the help of a few resources.
Continue reading to find out how to buy a house in Thailand as a foreigner and which resources you need for a successful deal or you can read this blog on how to save time when buying property in Thailand.
Let's First Look At Owning Land In Thailand – The Legalities and Exceptions
As per Thai Laws, owning a piece of land in Thailand is the right of citizens, and this exempts foreigners from legally owning land. There are a few legal workarounds that allow foreigners to own villas, houses, townhouses and other freehold property. However, these workarounds allow foreigners to only own the structure and not the land.
The process to own a freehold structure would require you to have a real estate agent as well as a lawyer, to make the required documents and explain the legalities to you. It is crucial to remember that everything has to be witnessed in writing and someone’s spoken word is just not good enough.
In the situation, where, as a foreigner, you are buying the structure and not the land, the ownership of the structure will have to be transferred to you. The ownership will be registered and transferred separately from the Thai land on the freehold property has been constructed on.
Moreover, the transfer has to be done in the right manner so that the agreement abides by the Thai Civil and Commercial Code. The agreement will have to be registered by your realtor and lawyer with the Thai Land Department’s branch.
Special Note – American citizens who wish to own property in Thailand, can do so using the help of the Thai Amity Treaty. This treaty allows foreigners to invest in Thailand to run businesses, and as a result, get perks such as the right to own property. The minimum capital investment quota of investment is based on the rules of the Foreign Business Act.
To enjoy the various perks of the Thai Amity Treaty, you would need a lawyer to set up a Thai company through document filing, acquire certifications from the relevant departments and finally submit the application to the ministry of commerce.
Title Checks and Further Investigations on the Property
Before investing in property, it is in your best interest to perform a comprehensive title check and further investigations through the Land Department. To do this successfully, you will need the help of a reliable and professional real estate agent such as Silk Estate.
The real estate agent will guide you and even help you acquire legal services, or refer you to a Thai real estate legal specialist. The title search will ensure that the seller has a clear title and can legally sell, rent or lease the land to you. There are four types of titles for properties in Thailand, these are as follows:
1. Freehold Title Deed
This type of deed gives the seller the exclusive rights to rent, sell or lease the property to anyone they seem fit. Also known as the Chanote or Nor Sor 4 deed, this gives the seller the right to act without the inclusion of any other party who can challenge the seller’s actions.
1. Freehold Title Deed
This type of deed gives the seller the exclusive rights to rent, sell or lease the property to anyone they seem fit. Also known as the Chanote or Nor Sor 4 deed, this gives the seller the right to act without the inclusion of any other party who can challenge the seller’s actions.
2. Land Awaiting Title Deed
Better known by Thai sellers as the Nor Sor 3 Gor deed, this type of freehold title, is basically a piece of land that is awaiting the full title that can be sold, leased, rented out, or mortgaged by the seller, provided it is legally ready to be a full title.
3. Land Awaiting Title without Boundaries
Almost similar to the previous title, this deed is known as the Nor Sor 3 which implies that the property in question has no precise boundaries and is yet to be measured by the Thai Land Department.
4. Possessory Right Deed
Reliable and trustworthy real estate agents will never recommend this type of title deedas it is considered to be a valid title only through Tax payments and not through the documentation by the Land Department.
Further investigations include but are not limited to structural codes, environmental codes, building permits and sanctions, and building checks for occupancy. It is crucial to have a real estate and legal team on your side for further investigations, especially if you do not want to wake up one day and find out that the beach condo you bought has height and structural limits that do not allow you from constructing further.
Similarly, further investigations save you the heartache and pains of being shocked all of a sudden when you find out that the developer has sold you a condo and plans to develop another structure right next to it!
Before placing the token and signing any agreements, doing a background check on the real estate profile of the developer is always a good move. This task can be handled effortlessly by your realtor.
Perks of Owning Condominiums and Thai Property Taxes and Other Fees for Condos
Foreigners who are seeking to own properties in Thailand, often prefer Condo units. Thailand laws permit foreigners from a vast range of countries to own 1 or multiple condo units provided the shares for the condos are in the ratio of 51% Thai ownership and a maximum of 49% foreign ownership.
There are many perks of owning condos, such as this type of housing can be easily acquired through the help of a reliable realtor such as Silk Estate. Realtors that deal with condos meant for foreigners have prime properties listed by both new developers and established developers with a good name and reputation. Condos allow foreigners to live in the property, sell the property when they see fit as well and transfer the property to their heirs through succession and inheritance will.
Condos come equipped with swimming pools, the best fittings as well as other common amenities that appeal to the life of both investors as well as retirees. The only thing to be kept in mind while buying a condo is that the money you use to purchase the condo should come from overseas into your account and finally, the money should be paid in the local Thai currency to the seller.
While purchasing condo units, you would be liable to pay 3 types of charges other than the cost of the condo. The first is Thai property tax, the second is the transfer fees and the third is government fees to the Land Department and other govt offices if applicable. To get an estimate of these taxes and fees, speak to your realtor and lawyer before putting down the initial token amount and signing any documents.
Keep in mind that failure to pay taxes on time in Thailand is considered a serious offence. The best way to ensure that your taxes are paid on time every year or whenever they are due is to set up an escrow account with adequate funds for the calculated taxes.
Documents Needed To Purchase Property in Thailand
To purchase freehold property in Thailand, your realtor and lawyer will ask you for a few of the documents that are needed for the transfer of the structure. These documents include:
- Land Title Deed
- House Book
- Passports and/or Government-issued ID cards of both the buyer and the seller
- All home and office documents pertaining to the Thai Property being sold
- Building Permit
This list is subject to change as per local laws and regulations. To ensure that you have a hassle-free purchase experience, consider reading up all you can about Thai laws for foreigners looking to purchase a property. More importantly, consider hiring a Thai Real Estate agent that knows the way of the land and all laws pertaining to anything and everything property related.
A realtor can also act as a liaison, and a translator and represent you in all property matters while you are in Thailand or even travelling to and from the country. A realtor can guide you on succession and inheritance laws as well as keep you updated about new laws and regulations that can work out in your favor.
An example of such laws is the new incentives for global citizens that are soon to come into effect. You can read more about these new incentives for foreigners and global citizens.
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