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Property Acquisition Options

Legally owning a property, that is registering it on freehold under your own name, perhaps gives you the most secured feeling. After all, freehold ownership provides you with the rights only afforded to property owners under this structure.

However, not all property types are allowed to be purchased, registered and owned on freehold by a foreign individual in Thailand. In fact, speaking on general sense, expatriates are barred to own land in the Kingdom and the only type of property he can own and registered on freehold is a condominium. Yet, even this is subject to certain requisites to make it legally feasible and acceptable under Thai laws.

Condos

As stated earlier, a foreigner can purchase a condominium and register under his own name a condo unit on freehold.

Aside from the immigration requisites as well as the financial aspect of condo ownership, the buyer must first see to it that foreign ownership of the whole condo building, on which a unit he is planning to buy, must not yet reach the 49% foreign-ownership cap.

For example: if it is a 100-unit condo building, foreign ownership can only make up a total of 49 units. If the expat’s purchase will make breach the cap of 49%, he will not be allowed to buy a unit.

Through a Limited Company

An expatriate like you can opt on establishing a Thai limited company for the purpose of purchasing and owning a land in Thailand. But, the company needs to be majority or 51% owned by Thais and these Thai shareholders must have the necessary financial capacity to own such shares otherwise the said Thai shareholders will be deem and be treated by law as Thai Nominees, entities prohibited under law.

If indeed your Thai limited company has been established legally, it must function accordingly and the land that will be bought through it must be owned by the company and not you.

Lease

Leasing is among the best options there is for an expat who is looking for a property to acquire and call it a home for a good time of his life in Thailand even if the land cannot be owned by the him.

Even if it is relatively easy to lease a property (you can lease a land or a building), the time is limited as the maximum lease period is 30 years.

If the expat is leasing the property for more than three (3) years then he is ought to register the said transaction at the Land Office.

Another important thing to remember with leasing a property in Thailand is that there is no such thing as 30+30+30 collective lease structure or the 90 year lease structure utilize in the Kingdom.

Some agents or firms may propose this so called long term lease period to you and in case you are being offered with it, make sure that you will decline it.

As pointed out earlier, the maximum lease period is 30 years. Although you can insert an option to renew clause in your lease contract with the property owner, the said renewal will not be automatic as it will still be a subject to another round of review and scrutiny the an official at the Land Office.

 

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Moving to Thailand

moving-to-thailand

If you are considering moving to Thailand then consider what it is that you wish to do in Thailand. If you are over the age of 50 then you can retire in Thailand with a retirement visa for Thailand. If you are much younger you may want to work in Thailand and this will require a work permit for Thailand when you start.

If you have a work permit or a retirement visa then you are allowed to bring your personal items from home within the first 6 months of obtaining your work permit or retirement visa. These goods arrive in Thailand without the need to pay customs duty on the goods. Consider having a lawyer in Thailand arrange all of this paperwork for you as it is much easier when they do it. Now that you are in Thailand wither working or retired then consider the following – accommodation. There are a number of options with regards to buying property in Thailand. Most people who work in Thailand don’t plan on living in Thailand for more than 2-3 years as they would wish to return home. Others who retire tend to spend their money on a retirement condo and this normally works out well. Before you buy a condo in Thailand consider the area in which you live. It is always best to rent a property before you buy as this allows you to live in the area before you buy. Some areas in Bangkok, Pattaya or even Isaan may look fine when you arrive however it might be in a flood zone, near a disco which runs loud music at night every weekend or it simple is to far from where you would normally go. First rent then buy.

Those who work in Thailand most times want to be close to work so they tend to rent a property near to their place of work. Like many middle class Thai’s who work in the city center they have a condo or house outside of Bangkok to which they return on Friday nights. During the week they live in a rented apartment closer to work. You might opt for the same solution as they do if you are working in Thailand. Traffic is a nightmare in Thailand and if you really want to buy property consider the option of buying outside of Bangkok and renting close to where you actually work.

These are important issues and if you have never lived in Thailand then speak to us online about the cost of living in Thailand, property rentals and how to buy a condo in Thailand. The property laws in Thailand are not the same as back home as foreigners are not generally allowed to own land in Thailand. Speak to us about your retirement, work permit and property issues online today.

 

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Land Measurements

If you are buying property in Thailand the measurements can become confusing. It is neither imperial nor metric. We have a convertor on our site to convert Rai into square meters. The Thai system has not changed and when buying property it is best to understand it.

The metric system was officially introduced by a law passed on December 17, 1923. However, old Thai units are still in common use, especially for measurements of land which is often quoted using the traditional Thai system of waa, ngaan and rai. Old-timers in the provinces will occasionally use the traditional Thai system of weights and measures in speech, as will boat-builders, carpenters and other craftsmen when talking about their work. Here are some conversions to use for such occasions:

Thai system

 Metric System
1 square wha 4 square meters
1 ngan (100 square wha) 400 square meters
1 rai (4 ngan) (1 sq cen) 1600 square meters
1 baht 15.16 grams
1 tamlung (4 Baht) 60 grams
1 chang (20 tamlung) 1.2 kg
1 haap (50 chang) 60 kg
1 niu 2 cm
1 kheup (12 niu) 25 cm
1 sawk (2 kheup) 50 cm
1 waa (4 sawk) 2 meters
1 sen (20 waa) 40 meters
1 yoht (400 sen) 16 km
1 kwien 2,000 liters
1 ban 1,000 liters (2 ban=1 kwien)
1 sat 20 liters (50 sat=1 ban)
1 tannan 1 liter (20 tannan=1 sat)

 

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Buying a Condo

Buying Condo in Thailand

Foreigners or expatriates prefer to lease or buy condominiums in Thailand. Some buy it for retirement while others buy it to rent out and only use it as a holiday home. There are different options with regards to property in Thailand.

Buying a condo in Thailand is much easier that trying to buy a villa or a house as a foreigner may not own land in Thailand. You can own the structure but not the land that it is located on. This does present many problems hence people prefer to buy a condo unit. some of the most popular locations tend to be Jomtien in Pattaya and Phuket. Bangkok is not that high on the list when it comes to the number of expats living in Thailand who own their own homes.

The condo that you buy has to be certified as a condo. The Condominium Act defines what a condo is and the certification process. If you are buying a secondhand property it is always best to have an attorney view the agreement and the title deed which the owner more likely than not has as very few condo units sold between foreigners have mortgage bonds on them.  Now, this is very important. The amount of units in the condominium complex may not be owned by more than 49% foreigners. Many foreigners register the condominium in the name of a Thai registered company and this does not affect the ration as it is viewed as being Thai owned.

Due diligence should always be performed before you sign any agreement in Thailand with regards to property. Consult any of our attorneys in Thailand with regard to having due diligence completed on the property before purchase.

 

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Fractional Ownership

Fractional ownership has not taken off well in Thailand where it concerns the locals. With a lack of laws governing fractional ownership it is still mainly foreigners who buy into it. There are however questions raised about the 49% condo ownership rule.

When buying a condo complex in Thailand foreigners may not own more than 49% of the units. With timeshare or fractional ownership now on the rise in Thailand questions are being raised about the current law regarding 49% ownership. Phanom Kanjanathiemthao, managing director of property consultant Knight Frank Chartered (Thailand) had this to say with regards to the current debate about property ownership in Thailand.

Restrictions on the foreign ownership of property create difficulties for developers using fractional ownership, who have to apply diverse strategies to attract Thai buyers, said Mr Phanom.

“Many properties in Pattaya and Phuket are not affordable for Thai buyers due to very high prices,” he said. “They cannot even buy with leasehold prices in some projects. Even a discounted price remains unaffordable for them.”

To encourage foreign buyers and prevent problems associated with using Thai nominee companies to purchase property for foreigners, Mr Phanom suggests extending the maximum property leasehold for foreigners to 75 or 90 years, from the current 30 years. In Vietnam, the government is amending the law to allow foreigners to own residential units, similar to Singapore and Malaysia.

“Today almost every country allows foreigners to buy property but they have a committee to set the conditions on what properties foreigners can own and how many they can hold,” he said.

Creating zones where foreigners could own condominiums outright was another approach, he said. Extending the maximum leasehold would benefit Thais and the country, said Praphaisith Tankeyura, managing director of Boathouse Hua Hin Co Ltd.

“We have to accept that almost all properties in Phuket and Samui now do not belong to Thai people,” he said.

Boathouse was among many projects that had to adjust their strategies to cope with shrinking foreign demand. Fractional ownership is a new concept in Thailand so speak to an attorney before you buy into any property scheme. There are currently no laws governing the concept and this might leave the system open to abuse.