16/09/2020
🏡 Are foreigners able to buy Thailand Property?
Thai law forbids foreigners from owning land in their own name. If a foreign investor is interested in buying Thailand property, they have just two options: either applying for a 30-year leasehold or purchasing the property through a limited company. The most common and easiest approach is to set up your own Thai limited company to own the land on your behalf.
Condominiums can be purchased by foreigners as long as a minimum of 51% of the building is owned by Thai nationals.
Leasing land in Kingdom of Thailand
As we already mentioned, foreigners can lease land in Thailand for a minimum of thirty years. However, leasing isn’t a very common approach, in most cases this happens once an overseas man marries a Thai citizen: the Thai woman, as a Thai citizen, purchases the land and stipulates a lease agreement together with her foreign husband.
Regardless of who you lease from, be sure to check that all information on the deed is accurate and that the land you’re leasing has the appropriate title.
More often than not, the leasing contract states;
• Duration of the lease
• Buyers right to sell it
• Registration fees
🏡What are land titles?
Land can have completely different titles in Thailand, factors such as its location or whether or not it is leased to a foreigner or not. There are seven kinds of land titles however just 3 of them can be leased to foreigners :
1. Chanot
2. Nor Sor Saam
3. Nor Sor Saam Gor
For more information on title deeds visit the department of lands website
🏡Buying Thailand property through a Thai Limited company
The quickest and easiest way a foreigner can purchase Thailand property, is to set up a Thai limited company
Bear in mind that as a foreigner, you can’t retain more than half of the company’s shares. This means the company has got to be a minimum of 51% owned by a Thai national.
The chosen Thai citizen can then opt to give up their company rights to you. Note, that the Thai Immigration office is aware of this type of procedures and can definitely monitor your business so be prepared.
🏢Foreigners buying condominiums
Due to the legal restrictions mentioned earlier, most foreigners opt to simply purchase a condominium or apartment in Thailand. However, a foreigner can only purchase a condominium in his/her own name, as long as a minimum of 51% of the building is owned by Thai citizens.
🏢Is it Safe Investing in Thailands Off-plan Condominiums?
Off-plan condominium investments arise when the developer of the condominium project sells the apartment units before and during the construction process.
Generally speaking it takes 3 to 5 years for the average condominium building to complete construction from the time sales initially begin. Due to this, there’s a market for investors in buying units off-plan, and selling them at a profit once the building is nearer to being finished.
In most cases investors can reserve units and sign contracts after making a deposit of 10%. Then another 10% is paid gradually over the course of a few years. Installments are payable on a monthly basis.
Over a short period of just a few years, property values should appreciate considerably. There are cases of individuals buying units off-plan and selling the contracts years before completion at premiums higher than 100%.
Investing in off-plan condominiums in Thailand also has its inherent risks. The worst-case scenario would be finding that your developer has abandoned the project and walked away with any payments you made.
There is also the possibility that you simply abandon the contract, and again lose your deposit and any installment payments previously made.
This could theoretically happen if, for instance, property values drastically decline or you don’t have cash available to complete the transfers in time.
🏦What is the Cost of Thailand Property Tax?
The cost of property taxes in Thailand has to be taken under consideration when purchasing a property, regardless of whether it’s for investment purposes or not.
Property taxes can chip away at your return on investment, it’s best to get an understanding on the property tax rates before committing to any financial investment.
If you plan on investing in Thailand property you could also face the additional concern of taxes on your rental income.
