Buying a Holiday Home and Property in Thailand
Buying a Holiday Home and Property in Thailand
If you were to ask tourists queuing up to fly home aftervisiting Thailand whether they considered purchasing a property during their trip, the vast majority would admit that they had thought about buyinga holiday home in Thailand at some point in their holiday. Let's face it,Thailand is a tropical paradise that many envision retiring earlyfor with a place close to the beach.
Things to Know
Whether it’s been something you have talked about for a whileor a vague notion you got while on a sun-drenched beach in Phuket, ponderingthe possibility of buying a holiday home in the land of smiles puts you in verylarge company and for good reason. After all, Thailand is one of the mosttraveled to destinations in the world.
Home to rich and elegant culture, Thailand gives travelers atrue sense of mystery and wonder while still having the comforts of home closeat hand. This East meets West balance is one of the biggest selling points forforeigners who have purchased property here.
However, it’s important to know all of the facts andseparate the dream from reality before seriously considering buying aholiday home. Here are some of the most important things to consider before youdecide to buy a property in Thailand.
Can Foreigners Own LAND in Thailand?
By law, foreigners cannot own LAND in Thailand.
If a foreignerwants to purchase property in Thailand there are several options. One is tolease the land for an extended period of time which is usually 90 yearsregistered in 30-year blocks. It is important that you ensure all of theinformation on the title deed is accurate and that the land you lease has anappropriate title.
Another alternative is to set up a Thai company. If youchoose to set up a Thai company, you will be a minority shareholder. Thecompany must be at least 51% Thai owned which means you will need at least oneThai partner. Property lawyers in Thailand can set this up and put in placesafeguards for additional protection.
Another option is to purchase a condominium in Thailandwhich you can own in your own name forever.
Are Condominiums in Thailand the Best Option?
Because some people are put off by the process involvingland, many look to buying a condominium instead, which a foreigner can own 100%outright. Condominiums are by far the easiest path to owning property inThailand.
According to the Thai Condominium Act, foreigners can buy a condominium with a freehold title under the “foreignfreehold” quota. In a registered condominium building, 49% of the units aredesignated “foreign freehold” quota. Foreigners buying these units will beissued a “foreign freehold” title deed.
Can I Get a Mortage from a Thai Bank?
When purchasing a property in Thailand, foreigners find itdifficult to secure financing from Thai Banks. This is even true for foreignerswho have been living in Thailand for a number of years with good work historyand proper documentation. If the property is going to be under a foreigner’sname, it seems that Thailand would prefer that the money came from abroad.
Perform Due Diligence in Thailand
A local property law firm is capable of performing a DueDiligence on any property in Thailand to ensure that there are no problems. ADue Diligence report in Thailand is similar to that in Western countries andwill entail checking all title documents, the history of the property, size, accessrights, and location.
When purchasing a property in Thailand reservation agreements must allow sufficient time for a DueDiligence to be performed.
How much is the typical Reservation Payment in Thailand?
In many countries, the Reservation Payment is known as the bookingfee.
The reservation agreement and payment reserves the property (takesit off the market) and secures the terms and conditions of the offer that hasbeen accepted by the seller to purchase the property. Later the sales and purchasecontracts will be drafted after the Due Diligence is performed.
In Thailand, the Reservation Payment is usually no more than2% of the purchase price of the property and goes towards the total purchase. It is refundable should there be a problem with the due diligencereport. Be sure to retain a receipt of the transaction.
Ask for a Succession Clause
For those who are planning to leave your property inThailand to your children as part of their inheritance, it is wise to add asuccession clause to the contact. Although it is not a pleasant thought tothink of your passing, this will prevent your children or heirs from theadditional stress of dealing with unwanted complications during this sad andpainful time.
The Good News - No Annual Property Taxes
Foreigners owning property in Thailandenjoy zero property taxes. There are currently no annual property taxes inThailand.
There are, however, taxes at the time of purchase and salealong with typical stamp duty and transfer fees. This is common in most countries andthese are usually split equally between buyer and seller in Thailand.
With all of the rules, regulations, and restrictions, Thailand may sound like a better place to visit rather than to live, but this couldn’t be further from the truth. Thailand is rated in the top 10 places in the world to retire year after year.