Whether you are a local, an expat, or a foreigner planning to buy a property in Thailand, this comprehensive guide will walk you through the basic information about owning real estate in the Kingdom, from land to houses, condominiums, and buildings you may be interested in. It covers all the essential aspects, ensuring you are fully apprised of the basic requirements you need to meet.
Freehold Condominium Ownership
Freehold Condominium Ownership is indefinite ownership of the condominium property in Thailand. It is easy for Thai nationals to own a condominium unit in the kingdom, but the question here is concerning foreigners or non-Thais, as there are constraints that they need to abide by.
The regulation is that each condominium building is allocated a fair quota of foreign freehold ownership, set at a maximum of 49%, known as the foreign quota. The remaining 51% is reserved for Thai citizens. This means that if the number of non-Thai-owned condo units in the building is below 49%, a foreigner can still buy and own one and register it under their name. However, if the foreign quota is at its maximum of 49%, a potential foreign buyer can only acquire a condo unit that is being sold by another foreigner.
The condominium management has access to these details so that they are well-informed and do not violate the law in the Land of Smiles.
Q1: Can Foreigners Own a Condo in Thailand?
Yes, foreigners can own a Freehold Thai title deed for condominiums as long as they qualify for ownership as stipulated under the Condominium Act B.E. 2522 (1979), as amended in 2008. The law clearly states that any foreigner may own a condo unit, with the condition that their collective ownership does not exceed forty-nine percent of the space of the whole floor area.
Q2: What are the Advantages of a Freehold Ownership?
The six main advantages of freehold ownership are the following:
- Thai or non-Thai’s can acquire the condominium unit in their names free from the hold of any entity;
- Can enjoy freehold ownership for an indefinite period or perpetuity;
- Freehold ownership, compared to leasehold ownership, is ideal for complete ownership and resale in the market;
- The owner can freely, sell, mortgage, and transfer the property to their heirs at their discretion;
- Can exercise voting rights in annual meetings as a co-owner of the condominium building for matters involving repairs and amenities provided, and those who are in the committee (group of co-owners owning a higher percentage of the entire condo) have the ability to manage the general works of the management; and
- Overall, property tax dues are cheaper throughout the property’s lifetime.
Q3: Are there Home Loans Available for Foreigners in Thailand?
Yes, there are home loans available for foreigners in Thailand. Foreign nationals can turn to several banking institutions and financers to access these mortgages in Thailand. However, it is important to note that their options are limited and require specific conditions and approval.
Q4: What are the Steps for Buying a Condo in Thailand?
You can be assisted with your property ownership transfer service by PropertySights Real Estate, as well as be guided by the four main steps for buying a condo in Thailand as follows:
Step 1: Choose the Right Property and Prepare Documents
Determine the right property by following the tips for choosing the right condo on the PropertySights Real Estate website. These tips will give you an idea and guide you throughout the process of choosing the right real estate.
Once you have selected the right property by conducting your own due diligence and obtaining its legal status, you must prepare the necessary documents to start this transaction.
The seller should prepare his or her identification card, the Thai title deed, and a letter of guarantee from the juristic office building stating that 51% and above are owned by Thai nationals.
If you’re a potential Thai national buyer, you prepare your Thai ID and a bank coverage letter for the loan amount. If you’re a foreign buyer, you will need a copy of your passport, the last immigration stamp entrance to the Kingdom, and a valid visa, if any.
Step 2: Sign the Purchase Agreement and Make Deposit Payment
When all the relevant documents are in place, and the consent of the involved parties is met, it is time for both parties to sign an agreement to sell and purchase the property. This contract must identify both parties, the property being sold, total purchase price, transfer date, closing tax fees cost, right and responsibilities of the parties, the payment terms and method, and all necessary information that should be stipulated to ensure that no problems arise in the future due to a vague contract.
Once the S&P Agreement is signed and validated, the buyer should make a deposit payment to secure the said property. Typically this deposit amounts to 5 to 15% of the total purchase amount.
Step 3: Arrange the Seller and Buyer Certificates
The debt-free certificate, which can be required from the juristic office, should be prepared by the seller. This document is crucial as it confirms that the property is free from any outstanding debts, such as utilities and maintenance fees. Its presence gives the buyer a sense of security and confidence in the purchase property.
It should be noted that when the buyer is a non-resident foreigner, the foreigner must provide the foreign exchange transaction (FET) form, which is proof that a financial institution in the Kingdom handled the exchange of foreign currency from the country where the foreigner originated. It should be noted that the FET form can only be issued if the amount exceeds $50,000 or the equivalent in other currencies.
However, if the amount is less than $50,000, the foreigner must request a confirmation from the Thai bank to constitute proof that the fund came from abroad.
Step 4: Pay Taxes and Fees to Complete Property Ownership Transaction
For a smooth property transfer, all parties involved must adhere to the property law and taxes in the Kingdom to complete property ownership transactions. Hence, the parties involved must pay the taxes, which include transfer fees, stamp duty, specific business tax, and withholding tax, which are necessary components of the process, if applicable.
Q5: What are the Maintenance Fees for Condominium Ownership?
Maintenance fees for condominiums are used to keep the common areas of the building, such as the lobby, lifts, pools, hallways, and more in excellent and livable condition. When condo units are initially purchased from the developer, a sinking fund is set up as a safety net to cover expenditures for repairs, restorations, and upgrades of a condominium building.
This fund is replenished by the common fee charge that condo owners pay every year. The service charge that unit owners pay is calculated based on the real estate area measurement, which is measured in its actual size in square meters (sqm). The price per sqm varies according to the degree of luxury and service provided by the structure, ensuring a fair distribution of costs among all owners.
Q6: How can I Register for Condo Utilities After Transferring Ownership?
You can register for condominium utilities, such as electricity, water and internet providers, with the relevant authorities or companies. For electricity, you can apply at the office of the Metropolitan Electricity Authority (MEA) in Bangkok or before the offices of the Provincial Electricity Authority outside Bangkok.
For water utility, you shall register your ownership as the new co-owner of the building at the juristic office. For telecommunication, you can choose a provider that suits you and apply directly with them, such as AIS, True (merged with Dtac), and 3BB.
Once you’ve registered all the utilities needed for your condo, you can refer to the utility bills payment guide provided by PropertySights Real Estate. This guide will help you conveniently manage your bill payments.
Q7: Are there any Restrictions on Foreigners’ Ownership of a Condo in Thailand?
Yes, the limitation is regarding the foreigner’s quota, where the total floor area owned by foreigners in the condominium building should not exceed forty-nine percent.
Q8: Does Ownership of a Condo Provide Me with a Long-Term Visa in Thailand?
Yes, owning a firsthand condominium unit can provide a foreigner with a long-term visa through an investment visa in Thailand. The process involves the foreigner being issued a one-year visa that can be renewed annually for the sole purpose of buying a condominium unit worth at least 10 million baht in a new development.
What is the Difference Between Freehold and Leasehold Ownership in Thailand?
Freehold Ownership is a more secure way for those seeking independent and perpetuity ownership in Thailand. However, this is only limited to condominium units, with a restriction of 49% of the foreign owners owning the unit building collectively.
On the other hand, leasehold ownership, unlike freehold ownership, is not restricted to condominiums, making this option broader for foreigners seeking to live in a house, semi-detached house, or villa. However, the maximum lease for the foreigner to have the right to occupy the building or land is only up to 30 years, with the possibility of renewals.
Q9: What is the Law Regarding Leasehold Ownership?
The law regarding leasehold ownership is regulated under the Civil and Commercial Code of Thailand. Thai law regarding property rental agreements, whether land or condominium, can be found specifically under Section 537: Renting or Leasing Property, Section 538: Renting Property, and Section 540: Lease cannot exceed 30 years.
Q10: Can a Farang Own a Villa and Land in Thailand?
Yes, Farang (foreigners) can own a villa and land in the Kingdom indirectly through Thai companies or leasehold structures. They may acquire land by virtue of the provisions of a treaty giving them the right to own immovable properties. For residential purposes, the land acquisition must not exceed one rai or 1,600 square meters and requires approval from the Minister.
Still, this treaty provision will not apply to those Farang who bring capital investment worth more than 40 million baht, as prescribed by the Ministerial Regulations and the type of business to invest in, as declared by the Board of Investment (BOI).
Q11: Are Foreigners Allowed to Own Any Structure on the Land?
Yes, a foreigner is allowed to own any structure on the land. However, it is important to note that foreigners cannot own land in their own right. Instead, they can own a structure built on another person’s land. The process involves applying for a permit to construct the structure under the foreigner’s name.
Q12: Can you Authorize someone to Manage Property Affaires in Thailand?
Yes, you can authorize someone to manage property affairs in the Kingdom. A Thai citizen or non-Thai can delegate legal authority to someone capable of managing their affairs through Power of Attorney (PoA).
It is important to ensure that such delegation is drafted clearly, signed by both parties and notarized before the notary public in the Kingdom. If executed outside of Thailand, this process must be signed, notarized, and then authenticated by the Thai embassy or consulate in the country of origin, further ensuring its legality.
Since it is related to real estate transactions, this PoA must be registered with the Land Department. The attorney-in-fact can then execute the PoA within the authorized scope.
For any queries or further guidance on real estate ownership in Thailand, rest assured that our team of experts at PropertySights Real Estate will be more than capable of helping you understand this matter and its processes.
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