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Buyers FAQ

If you have never before purchased property in Thailand the in and out's of such a buisness transaction can be very confusing. Even though we strive to screen all major developers and agencies one should always be cautious with any major transaction.

 

Feel free to read trough our neetly compiled buyers guide.

• Can a foreigner 'own' properties in Thailand?
• How do I transfer funds for a property purchase into Thailand?
• Can I purchase properties when I am abroad?
• Should I make payments for a property purchase directly to a developer?
• If I rent a property, are my interests protected by Thai law?
• How are my interests secured if I buy off-plan?
• What is a security deposit and why should I pay it?
• Is it complicated to form my own Thai company?

 

Can a foreigner 'own' properties in Thailand?

Yes, a foreigner can own properties in Thailand. The Condominium Act (No. 3) B.E. 2542 (A.D. 1999) provides "freehold" registration of apartments or condos directly into foreign nationals.

 

Any registered condominium development is allowed to allocate 49% of the total sellable area into foreign ownership. A foreign registered condo can always be sold and registered into another foreigner's name. At the transfer of ownership the buyer must always be able to show his "Foreign Exchange Transaction Form". Land and house cannot be registered directly into foreign ownership; only in Thai juristic persons.

 

Foreigners are allowed to form a Thai registered company and become shareholder (maximum 49%) of this company together with 7 Thai nominees (holding a minimum of 51% shares). Having formed a Thai registered company whereby your interests are protected by e.g. directorship holding binding signatory rights and, preferably, preferential shares (against ordinary shares); this company then could register any assets into the company. Assets held by the company automatically belong to the rightful shareholder/owner of this company. In this way, thousands and thousands of foreigners 'own' land and houses into their 'own name'.

 

For more detailed information and registration of companies we would like to refer you to professional law firms able to guide you through this process. It is really quite easy and affordable to form a company and maintain it. Selling your assets could simply be established by transferring the shares of the company to another person. Not having to transfer the assets of the company through the Land Office department saves a considerable amount of transfer taxes at the same time

 

How do I transfer funds for a property purchase into Thailand?

Simple, you may open a bank account in one of the local banks where your transfer the funds into. Otherwise you may transfer funds directly into the bank account of your real estate agent that is engaged to purchase the property on your behalf; make sure that you only deal with reputable and professional agencies. Make sure that your transfer shows all correct bank-details (Account name, account number, branch name and address, swift code and type (current or saving) of account) as well as the full address details of the receiver PLUS a description of the reason for transfer.

 

This description could be: "Property Investment Thailand". Only if your transfer exceeds the amount of 10,000 USD you should ALWAYS request an official so-called "Foreign Exchange Transaction Form". This "Foreign Exchange Transaction Form" will always allow you to re-transfer funds out of the Kingdom of Thailand. As you might know; normally one is not allowed to bring money outside of Thailand. Only with a "Foreign Exchange Transaction Form" you are allowed to send money, for a similar amount, out of Thailand as it proves that you ever transferred funds into Thailand. (If you buy a property and sell it later, it will become helpful).

 

If you ever register a "freehold" (foreign owned) condo into your name you must be able to show a "Foreign Exchange Transaction Form" upon transfer at the Land Office. "Foreign Exchange Transaction Form(s)" are personal documents that you should always keep in file

 

Can I purchase properties when I am abroad?

Yes you can. However our advice is to make the purchase decision when you are here in Thailand or otherwise only to make a decision if you are very familiar with the product and all parties involved. "Buying in the blind" (e.g. through Internet without ANY real life connections) is not recommended.

 

All required documentation can be signed and sealed abroad and/or assigned by a power of attorney. Remember that any property transfer, assigned by power of attorney, can only be handled by a Thai national. Always request for copies of documents by post, email or fax so you are able to monitor the progress.

 

Should I make payments for a property purchase directly to a developer?

Yes, you can transfer payments directly to your developer. Most of the real-estate developers are genuine and reliable.

 

However, there are still quite a few that are not very efficient- and reluctant parties to deal with. If you want to ensure smooth proceedings you should at least engage a professional real-estate agent that is familiar with the market and able to assist you in case of any problems. Checking the track-record of both the developer as well as the agent that you are dealing with is advised.

 

If I rent a property, are my interests protected by Thai law?

Normally, you can rent and enjoy your stay as long as the contract-duration stipulates. In rare occasions the landlord breaches the contract by selling the property.

 

Unfortunately there is not a lot you can do about this. Thai law and legislation is not really firm in protecting tenants' interests. Long term lets or leases can be officially registered at Land Office Department (3 plus 3 years only).

 

Once registered at the Land Office Department your lease term is pretty safe and solid. This often applies with commercial leases.

 

How are my interests secured if I buy off-plan?

Buying off-plan is certainly not unusual and often even allows pre-construction conditions.

 

Apart from that; the first choices are yours, so you could find yourself in a position whereby you can select the nicest properties available on the project. It is advised, before you sign-up a contract at the pre-construction phase, to ask for a copy of the developer's land title deed (Chanoot) whereby it clearly shows that the project's land parcel is owned by the developer or one of his nominees.

 

It rarely happens that pre-sales started before the land purchase is completed by the developer: In such case you better turn around and walk away.

 

It is also good to ask a copy of the building license; in theory the construction may only start if the licenses are issued. If you sign a contract, please make sure that any deposits are fully refundable in case the project will be canceled or seriously delayed (starting date as well as completion dates).

 

Buying property in Thailand is often a pleasant experience if you deal with professionals.

 

What is a security deposit and why should I pay it?

Imagine that you find the property of your dreams and you are not able to make an immediate payment on it; do not think that the property is still there if you go to the bank within days to make a payment.

 

It happens ever so often that all of a sudden disappointment strikes when the property is no longer available because it is sold! If you are more or less sure that you want to buy or rent, you really should make a 'security deposit' to ensure that the offer will be taken-off the market and not being sold or rented to another person.

 

Even when you are not able to complete on the deal immediately or meet the datelines as stipulated by the seller or landlord (let's say you want to start a rental period after 2 months.) you could still try to negotiate if the seller or landlord is willing to accept your terms rather than start looking for another proposition. Offering to pay a security deposit often helps the negotiations. In some cases the security deposit is refundable.

 

If you make a clear understanding regarding how and when you could claim your deposit, there is no risk that you loose it (e.g. when the seller or landlord cannot meet the terms.).

 

Is it complicated to form my own Thai company?

Not at all. Forming a Thai registered company is a quick and easy thing. Make sure that you use a capable solicitor or administration office with the knowledge of all procedures involved. It will become handy if the formation of your Thai company is done by a party that is also able to process the required annual audit report of your company.

 

Keep all of your company documents on a safe place within reach if you need them. If there are any properties owned by your company you might consider registering a separate company for each one of them.

 

In the event that you ever want to sell your property you might as well transfer the shares of your holding company into the buyers' name which saves you a reasonable amount of land transfer taxes.

If you want help to contact a reputable international solicitor, let us know and we can refer you to a reliable and trustworthy partner.