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Buying in Thailand

Wanting to buy a villa or condo in Thailand but not certain as to how this is done. Well here you will find the basic break down of what needs to be done and how to buy property or any real estate in Thailand.

Select a Property Agent

 Since you will be looking for property in a foreign country you need expert local assistance.  The agent who is familiar with the geographical area.  The agent will save you valuable time in selecting and showing you the property in your price range that meets your needs.  I can honestly say that purchasing directly from the developer isn’t going to save you money versus buying it from agent.  A quality property for sale in Thailand is generally offered at a fixed price by the Seller.  The best benefit of using a property agent is that they will act as a liaison between you and the Seller.  They will obtain a fair price for you and act on your behalf to represent your best interests throughout the entire process. 

Legal Planning

Before you sign any deposit agreement or contract, you should sit down with a lawyer or solicitor to discuss the legal process.  You need to know the correct legal process in Thailand for the foreigner to acquire property.  Remember that you are spending part of your life savings to acquire this property and you must carefully plan your steps in the process.  Many lawyers offer free legal consultation to potential property buyers.  You should get the legal facts of the property before you deposit any money.  

Best Method of Ownership

In Thailand, a foreigner may only own a condominium in his/her own name.  If the foreigner wishes to acquire land and build a house, he/she should obtain a long term lease on the land, typically 90 years (registered 30 years initially and two renewals of 30 years each).   The foreigner should apply for the construction permit to build the house in their own name.  This way the foreigner owns the house and has a secured long term lease on the land.  The lease is written with the option to reassign to another person (if you sell), ability to sublease and with a purchase option (should the law change in the future to allow freehold ownership by the foreigner).   Therefore, a lease is the most common legal method for the foreigner to acquire property in Thailand.

Title Investigation

A comprehensive examination of title deed recorded at the Land Department should be done.  You need to verify that the Seller has clear and legal title of the land before you enter into a contractual agreement.  The title search will trace the land to its first possession.  This investigation will also verify the right to access to your property; provide the residential zoning, environmental and planning codes in the area and show any registered mortgage or liens on the land.  It is a good idea to make sure that you can build a structure on the land.

Deposit

When you feel satisfied with the property, you will be asked to make a deposit to show your good faith to continue the process.  In return, the Seller will reserve the property for you and start the process by drafting the contracts for purchase.  Unless you write specifically a “get-out” clause in the deposit agreement, for example “subject to clear title” or “subject to agreement on the contract terms,” the money deposited is non-refundable.  

Review of Contracts

Now you are ready to proceed to acquire the property upon verification of a clear title.  The Seller will have the contracts prepared for you.  Since the Seller will write the contracts, it is highly recommended that you have a lawyer or solicitor review the terms and conditions.  First, you want protection for yourself should there be a delay in the property being built.  A proper remedy should be stated in the contract. Second, the Seller will state a penalty if you are late with your payment.   This should be fair and reasonable to both parties.  Finally, your payment schedule should be reasonable and practical. Normally, a first payment is 25 percent.  Thereafter payments are made on a progressive basis:  25 percent when the roof is on, 25 percent when the door and windows are secure; and 25 percent when the fixtures and fittings are completed. 

Title Deeds in Thailand

Title Deeds in Thailand may be mainly divided into 4 categories as follows:  

Freehold Title deed (Chanote or Nor Sor 4)

This type of title grants the holder of this document the full rights over the land. Thus, if you are planning to buy land in Thailand, this type of title deed is the best title deed to hold.

Nor Sor 3 Gor

 A land awaiting a full title deed is granted the document Nor Sor 3 Kor. The land is measured by the Land Department; therefore, it has its exact boundaries. The owner knows exactly what he owns. This type of land may be sold, transferred, or mortgaged, as a land with freehold title deed (Chanote) as long as it is ready to be a full title deed. In order to change the title to a Chanote, the owner of the land may file a petition to the Land Department to file a request to change it to a full title deed (Chanote), and the Land Department may do so if there is no opposition made against the petition.

Nor Sor 3

The difference between this type of land title deed and the Nor Sor 3 Gor is that a land with Nor Sor 3 title has never yet been measured by the Land Department; hence the land has no exact boundaries. However, the Nor Sor 3 title may later be switched to a Nor Sor 3 Gor, then furthermore, transform that title to a freehold title deed (Chanote) in the future.

Possessory Right

This type of title deed is least recommended. A land with a possessory right has never been substantiated by Department, but is only recognized by tax payments at the Local Administrative Office. It is essential to bear in mind that title deeds other than one of a Chanote, is not able to register any leases against the land such as, usufructs, mortgages or superficies in order to gain or encumbrance. Although Thai Law stipulates that a foreigner may not own land in Thailand, there are alternative options to owning a land in Thailand.

Thailand Property Taxes for Condo, Villa or House

Thailand property taxes and how they are calculated in Thailand. Speak to one of our property lawyers with regards to your property taxes in Thailand. 

 

THAILAND PROPERTY TAXES

 

  Transfer fee

2% of the registered value of the property

  Stamp Duty

0.5% of registered value. Only payable if exempt from business tax

  Withholding tax

1% of the appraised value of the property

  Business tax

3.3% of the appraised value of the property if selling within 5 years. This applies to both individuals and companies.

.

TAX

WHICH PARTY NORMALLY PAYS

AMOUNT

Transfer fee

Buyer

2% of registered value

Stamp Duty

Seller

0.5% of registered value

Withholding Tax

Seller

1% of appraised value

Business Tax

Seller

3.3% of appraised value

.

Land Measurement in Thailand

Converting Rai to Square Meters can be complex and can create legal issues when people do not understand what a Rai of land is or the building size. Ensure that when you are signing at the contract stage that you know what it is..Also ensure that you understand what you are selling or buying and how best to deal with this. These are the basics for land conversion in the Thai land measurement system. Thailand does not have an Imperial or Metric system.

1 sq. Wah = 4 sq. m. 1 acre = 2.471 Rai or 43,560 sq. ft. 
1 Ngan = 100 Wah (or 400 sq. m.) 1 hectare = 6.25 Rai or 10,000 sq. m. 
1 Rai = 4 Ngan (or 1600 sq. m.)

sq. Wah

sq. ft.

sq. m.

Ngan

Rai

Acre(s)

Hectare(s)

1

43

4

100

4,305

400

1

0.25

0.10

0.04

400

17,222

1,600

4

1

0.40

0.16

800

34,444

3,200

8

2

0.80

0.32

1,200

51,667

4,800

12

3

1.20

0.48

1,600

68,888

6,400

16

4

1.60

0.64

2,000

86,111

8,000

20

5

2.00

0.80

2,400

103,333

9,600

24

6

2.40

0.96

2,800

120,555

11,200

28

7

2.80

1.12

3,200

137,777

12,800

32

8

3.20

1.28

3,600

155,000

14,400

36

9

3.60

1.44

4,000

172,222

16,000

40

10

4.00

1.60

32,000

80

20

8

3.20

48,000

120

30

12

4.80

64,000

160

40

16

6.40

80,000

200

50

20

8.00

96,000

240

60

24

9.60

112,000

280

70

28

11.20

128,000

320

80

32

12.80

144,000

360

90

36

14.40

160,000

400

100

40

16.00