How to buy a real estate in Thailand

Here I describe what you should know before buying a condominium in Thailand. Hereafter I use the word "condo" to refer to one unit of a condominium.

Basically there is quite significant difference between Thailand and other countries when owning real estate as a foreigner. It is also good to mention that Thailand, as lively as it is in many aspects, makes no exception when concerning legal aspects. Law is something that is changing all the time and you can not rely on what is said today will remain tomorrow. Because of that instability it is wise to invest only the amount of money you are not too deadly afraid to lose. Nevertheless it is also good to mention that Thailand is also a part of the international business world and for its credibility it can not make any changes to debilitate investors at least not over night. If you ever get any trouble with the law there is only one right thing to do: consult a lawyer. It is vital for your prosperity to have some help from professionals in the real estate business and legal services. There is absolutely no reason for saving money in this kind of situation.

If you have decided to invest in Thailand the first thing to do is to carefully consider what to invest in. It is very reasonable to gather all the possible information of the object you can get. At least make sure you get these:

-         A copy of the original house registration book and all related papers where you can see who the real owner of the house is and if there are any conditions or easements. If these papers are in Thai, ask somebody to translate them in English to make sure you fully understand what is said. You can ask your agent to do that or, if you want to have a surely neutral translation, ask some third party translator to do that for you. This translation work is not expensive and it can give a huge advantage to you.

-         Make sure you are dealing with the real owner of the real estate or somebody who is an authorized agent.

-         Read all the relevant papers and fully understand them. There are too many examples of people who sign first and asks afterwards. You should also notice that in Thailand there is no similar protection for customers as it is in many other countries. If there are any difficulties in the understanding of details, ask your lawyer or agent to make them clear to you. It is not unusual that there are deliberate misunderstandings for the seller's advantage.

-         When you are actually making a purchase make sure that there is no limit reached for foreign owners of the condominium. You can get this information from the management of the condominium. There is no sure thing that the seller knows these kinds of things and in some cases they do not even care. If the limit is reached you still can make the actual purchase but problems will arise when you try to make the registration.

-         See the condo many times before buying it and for your own good, go to see it from Monday to Sunday and in different day times. In this way you will have the big picture of traffic and surroundings.

-         Find out how much the maintenance charge is and what it includes. Make sure you have information about costs of security, common property (including pool area, garden, hallways, lifts, roof, backyard, parking lot etc.), insurances, exits, fire control (make sure there is also pressure in sprinkler system).

-         Find out your car parking rights.

-         Find out who owns the land surrounding the condominium. There are many cases that the leading road to the condominium is closed because of new buildings. If so, there is no other way to get to the condo than rent a helicopter.

The smartest thing to do, if possible, is to rent the condo for a while to see in a real world what it would be like to live there. This is the only way to make not so nice things visible. Little by little you can notice if there are some structural problems with the condominium or annoying traffic during the evenings or even a badly tuned karaoke loving man living next door.

As you have become an owner of a condo you have your right to participate and vote in general meetings of the condominium. In case that you have purchased your unit from a condominium that is still under construction, the situation is usually that the developer has majority and hence he makes all the decisions.

There are some easements in condominiums in Thailand such as the Land Owner Law which constitutes that foreign ownership of a land can not be more than 39%. In practice, however, it usually is 49%. In the past there have been a few exceptions in this but at the moment there are none - although we have heard rumors of up coming exceptions. These exceptions occurred from the financial crisis of 1997 and IMF's pressure towards Thailand's government to attract foreign investors. Otherwise this is irrelevant if there is not really any up coming exception. At the moment the allotment is up to 49% foreign owners and 51% Thai owners. It is important to notice that after you have checked the current ownership allotment there is no guarantee that it won't change before you close the deal. Hence, if you can not make the purchase there is still some chances to do so with the help of professionals. These kinds of situations are familiar to us and for more information please contact our office.

Assets for purchase shall be transferred from outside of Thailand in a foreign currency. In practice this is done by a bank which transfers your money from your foreign account to a Thai account. This is the only way to do this because you need to be able to prove these transfers are done if you want to register a real estate to your own name. Otherwise you are free to bring cash to Thailand without any duty restrictions. In that case you only need a form written by customs to get with you. When transferring money from account to account it is very important to attach information for the purpose of the amount of money, for example "For purchase of a condominium unit number 111/999 in Thailand". In addition make sure that you have a receipt of the payment where you can see the details of the sender and receiver as well as the amount of money in Euros or an other foreign currency. If you have a permanent residency in Thailand you do not need to do all this.

As soon as the assets have arrived in a Thai bank account you need to have a Foreign Exchange Transfer Form, by which the bank can prove that these assets are transferred from abroad and the purpose is buying real estate. Without the said form you can not register your purchase to your own name. 

It is important to know that you need to pay taxes when purchasing real estate in Thailand. Both parties pay taxes for purchase and for companies it is a bit more expensive than for individuals. Buyers pay their taxes when they transfer real estate to their name and sellers later on. The tax of transferring is approximately 5,5% of the purchase price reported to a register officer. The tax for sellers is 30% of the profit made by the purchase deal. However, in early April 2008 huge discounts for transfers were put in place and according to this new pricing system buyers pay only approximately 1,2% of the purchase price in taxes.

In every phase of the purchase it is extremely important to copy all the relevant papers for yourself too,  because in Thailand it is very usual that important papers tend to disappear.

I would like to remind you that all this information I have written is free for you to use. However, quoting my text as such, even short parts of it, puts you under an obligation to refer to the original writer and source.

I would also like to remind you that all information in this article is only directional and no-one should make any action based on this article only. I highly recommend to everyone to use professional services of real estate agencies and lawyers. Also, I do not take any responsibility for any damage done or misunderstandings concerning this article.

Hans Lankari Co. Ltd. is very familiar with laws and regulations concerning the land register, taxes and real estate. You can have our consultation service by telephone or WhatsApp/Telegram, or we can visit customers -  as well as clients are very welcome to visit us at our office. We also have package deals which include writing documents and translations besides consultation. For more information please contact our office and ask for a proposition without any commitment in this phase.