Purchasing property in Thailand
Thailand has been home to beautiful and exotic islands in Southeast Asia. Foreigners and travelers alike are mesmerized by the country’s culture, history, its tropical weather and needless to say, its vibrant and fun-loving nightlife. With these inviting scenarios, foreigners are considering acquiring properties in Thailand either to settle permanently or simply for a holiday getaway.
Purchasing a property in Thailand involves many factors. There are a number of considerations to make before committing into purchasing Thailand Real Estate. Some of these include:
- The type of property
- The price of the property
- The location of the property
- The reason for purchasing the property
- The quality and workmanship of the property
- The legal processes involved in acquiring the property
Buying a Condominium
The Condominium Act of Thailand defines condominium as a building whereby persons are able to hold ownership separately according to units whereby each unit consists of personal ownership and joint ownership in common areas. A condominium building once registered shall become a juristic person and oftentimes referred to as the Juristic Condominium.
Thailand condominium developments are booming in cities like Bangkok, Phuket, and Pattaya. Many foreigners who decide to purchase real estate in Thailand look at purchasing a condominium. Here are the benefits of owning a condo in Thailand:
- Foreign buyers can own the condominium in their own name;
- The condominium is issued with a title deed similar to a strata title;
- Owners may use the title deed as collateral in Thailand;
- Maintenance fees are relatively lower compared to other countries;
- Can be a lot more affordable than houses with land;
- Easier to rent out due to its general size and location;
- Condo resale is faster and more straightforward compared to a land and house.
When purchasing a condominium unit, it is necessary that the Condominium Sales Agreement between the Seller and the prospective Buyer must be made in the same standard as set by the Minister of Interior. One of the most important considerations in purchasing a condominium is the selling price. As a buyer, it is very important to determine the value and rental potential of the property. In such a case, purchasing a condominium would not be labeled as a financial suicide. It is likewise valuable to note the market trend in condominium purchases. It is prudent to do some readings to help you in your decision in acquiring a condominium property in Thailand.
In a recent report of CBRE Thailand, it is reported that in the Q4 of 2019, the condominium market continued to weaken with a slow sales rate and a decline in the number of newly launched projects. As such, in the last year, developers have become more cautious in launching new projects considering the market situation. On the side of the buyer, this may be a good time for acquisition as developers are making development revisions and discounts from projects in terms of product and pricing in order to keep afloat.
Buying a House or Villa
Most foreigners visiting Thailand or permanently living in Thailand are choosing to own a house or a villa. However, it is a known fact under Thai laws that owning a home in Thailand is not as easy if one is not of Thai nationality.
Here are some of the benefits of buying a house:
- Larger space for living
- Greater level of privacy
- Full control of maintenance of the house
- Able to enjoy appreciation on the house
In buying a house or villa, it is very necessary to find the right location. You need to put into consideration the value of the properties in different locations in Thailand as well as their availability and market trends.
Buying a house or Thai villa in Thailand is not as straight forward as buying other kinds of real estate in Thailand such as a condominium. Previously, some buyers have opted to register a Thai company in order to hold ownership. Once their Thai limited company has been registered, then they use the limited company to hold the land. However, our Thai property lawyer recommends the following legal structures:
Buying a Land
Thailand Real Estate can be broadly categorized into firstly condominiums, houses, villas and lastly, land. The real estate regulations under Thai law may appear stringent and inflexible. These rules were put in place in order to protect its economic and social development. The possible influx of foreign investors in Thai’s real estate may have inflationary effect on its property market. Foreign ownership on Thai real estate is controlled in order to maintain the economic balance and avoid an inflation surge.
In Thailand, they do not use Western measurements for land. Use our online calculator to Convert Rai and Convert Rai to Square Meters when wanting to know the size of the land you are looking at. There are different ways in which to own land. One method is through a leasehold villa investment. It is a favored alternative because it is simple and straightforward. Foreigners can obtain full interest on a lease in Thailand for the registered period. As foreigners cannot hold ownership over land as freehold, the 30-year lease is one of the preferred methods of acquiring the property through leasehold.
Leasehold differs from purchasing a land through a Thai limited company. In the setting up of the company, 51% of the shareholding must be owned by Thai nationals. In such a case, there are several shareholders who may have interests that may be different from yours. This may develop unfavorable scenarios when shareholders have varied interests.
Also, a foreigner can marry a Thai and purchase land as a couple provided that certain legal provisions are observed.
Many foreigners acquire Thailand Real Estate either for residential purposes, be it to work or to retire in Thailand, or as an investment in what is known as an extremely dynamic and robust economic region. It is always a necessity to seek legal advises from property lawyers in Thailand in order to protect your interests and real estate investments.