Buying Real Estate in Thailand as a Foreigner
Buying Real Estate In Thailand As A Foreigner
The property market in Thailand is one of the fastest-growing in South East Asia, yet it is still to reach its peak, unlike many other sought after destinations around the world. This means that there is still upside potential for those looking to purchase an investment property.
As earlier mentioned, a foreigner is not allowed to own land in Thailand. Although, you are allowed to lease the land in Thailand on a long-term basis as a foreigner. Another way is through a Thai registered company. The law identifies certain sections under which a foreigner is allowed to control property and should be reviewed when buying real estate in Thailand.
We all know about the temptations that Thailand has to offer: white beaches, low living costs, and real estate that costs a fraction compared to back home. Maybe you have already decided to purchase a property or just want to learn more about how it works when buying real estate in Thailand.
Buying Property in another Country
Whether these properties are used for living or business or as a holiday home, buying a property in Thailand or another country can be a complicated process. Buying real estate in Thailand can sound complicated due to the legislation pertaining to foreign ownership of land in Thailand. Thailand is one of the most beautiful destinations in the world and many foreigners consider owning their own little piece of paradise after they have enjoyed a vacation there.
Undoubtedly the most popular property types are condominiums and villas with condominiums being the most common investment by foreigners. Whether searching in Bangkok, Phuket, or beyond, condos not only provide a contemporary space to live in, the acquisition process is relatively simple too.
A further benefit is that the majority of developments are open to foreign investment and many are constructed by publicly listed companies, meaning a higher degree of trust when purchasing from these developers directly.
It is common to overlook the barriers one has in order to be eligible to invest in Thailand. Investment property is governed by a set of rules we must all abide by.
Overall property laws and buying real estate in Thailand have their own specifics but basically are not much different from buying real estate in other countries like Europe, Australia, or the US. The exception is that foreigners may not own the land directly. Foreign land ownership restrictions in Thailand refer to the land-only and not the building on the land.
The land and the structure on the land can be owned independently. Foreigners buying a home in Thailand can do this through a 30-year land lease agreement (with up to 2 contractual extensions) for a total of 90 years with the house owned as freehold property in the foreigner's name.
In recent years, there are more and more articles about the Thai government relaxing rules to allow for more foreign investment. Most sale and purchase contracts include a clause allowing owners to convert to the more favorable legislation should this change.
For wealthy individuals and those who can afford it, some legal exceptions do apply.
Section 96 of the Land Code Act grants foreigners a path to ownership of up to 1,600 m2 (1 Rai) of land if they invest over 40M THB in bonds of either a State Enterprise, the Bank of Thailand, the Thai Government, or any bonds whereby the capital or interest are secured by the Ministry of Finance.
The Board of Investment (BOI) was established in 1997, and under the Investment Promotion Act, it offers incentives to foreigners who wish to invest and promote a business in Thailand.
Any foreigner wishing to promote a business or invest in Thailand may be granted specific privileges, like permission to own land. The Investment Promotion Act grants incentives to the business, not the individual, but under the BOI scheme, a foreigner may control their Thai business. And if they control the company, it means they also have control over any land owned by the company.
Any foreigner who is in a position to utilize the BOI scheme is also afforded legal control of Thai property.
You can contact your local bank in Thailand, to which the bank will coordinate with their head office to proceed with the transferring of funds into your bank account in Thailand with the directive of buying a property. You will need to supply the bank with your sale and purchase agreement.
Funds can be sent directly from abroad and deposited into your escrow account set up with your lawyer when buying real estate in Thailand.
A requirement when buying a "foreign freehold" condominium is that the funds come from outside of Thailand.
Lending to foreigners is limited and uncompetitive in Thailand. Many clients find better financing in their own country by refinancing an existing property or an equity loan.
Currently, there are no annual property taxes to pay in Thailand.
You will need to pay tax when you buy and sell your property in Thailand. The taxes associated with property ownership in Thailand are low in comparison to the rest of the world and if you are looking for an investment property, low tax rates could factor in heavily.
Property Law Firm
When buying real estate in Thailand we highly suggest using a local property law firm to conduct due diligence, a contract review, and to transfer the property correctly at the land office. It is usually necessary to use legal services when you sell your property.
Don’t be reckless, use a REALTOR you can trust when buying or selling property in Thailand as a foreigner.