Buying Real Estate in Thailand as a Foreigner
Buying Real Estate In Thailand As A Foreigner
As earlier mentioned, a foreigner is not allowed to own land in Thailand under their name. Although, you are allowed to buy real estate in Thailand through a registered company which is the most common method to buy land among foreigners. Another way is through leasing the land. The law identifies certain sections under which the foreigner is allowed to buy a real estate.
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. In this article, I explain about foreign property ownership regulations, how you can buy property as a foreigner in Thailand, about property taxes, if you can rent out the property, and more.
Buying Property in another Country
Whether these properties are used for living or business or as a holiday home, buying a property in 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 holiday 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 condominium developments that are open to foreign investment and most are constructed by publicly listed companies, meaning you can afford a high degree of trust when purchasing from the developers themselves.
YES, but one commonly overlooks the barriers one has in order to be eligible to invest. Investment property purchases are governed by a set of rules. 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, except foreigners may not own land in Thailand. Foreign land ownership restrictions in Thailand refer to the land only, not the building on the land or condominium registered under the Condominium Act.
The land and the structure on the land could be owned independently. Foreigners buying a home in Thailand can do this through a 30-year land lease agreement (with up to 2 extensions) for a total of 90 years with the house owned as freehold property in the foreigner's name.
In recent years, minor changes in Thai law have allowed nonresidents to explore the Thai real estate market. Lease renewals can not be registered longer than 30 years but can be granted through a contract.
Although it is widely known that it is illegal for foreigners to own land in Thailand, for wealthy individuals, 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 at least THB 40 million 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 the 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 a 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 in Thailand. Lending to foreigners is limited in Thailand so getting a refinancing of your existing property in your own country is commonly used. Even if you work in Thailand and can receive a loan from a Thai bank, you may still have to bring some funds from abroad.
You will also have to pay income tax when you sell the property in the future as there is no annual property tax 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.
When buying real estate in Thailand we suggest using a local property law firm to conduct due diligence, a contract review and to transfer the property correctly at the land office. And don’t be reckless, always use a REALTOR in Thailand.