What fees, taxes and costs are applicable to purchase a property?
Whenever a property in Thailand is bought and sold, these are taxes that need to be taken into account.
Tax on purchasing of properties:
• Ownership Transfer fee is paid to the Land Department Office, the transfer fee normal rate is 2% of the government appraised value or selling price depends on different cases.
• Stamp Duty fee is paid to the Land Department at 0.5% of the government appraised value or the selling price, depending on whichever is higher.
* In case of duty stamps fee are following:
– The seller has owned the property for at least 5 years.
– The seller has used the property as his primary residence for at least 1 year prior to the sale.
– The seller received the property as an inheritance.
• Specific Business Tax of 3.3% of the government appraised value or the selling price, depends on whichever is higher, this will be applied to all sales by company and to any private sales that occur within 5 years after the date of purchase and the seller has not used the property as his primary residence less than 1 year prior to the sale.
• Withholding income tax of 1% For Private sales, is calculated on a very complex formula based on the assessed value of the property, the length of time owned and the applicable personal income tax rate. 2. Corporate income tax is calculated at 1% of government appraised value or the selling price, depends on whichever is higher
Can foreigners get a mortgage loan from local banks in Thailand?
Foreigners can not get a mortgage loan from local banks in Thailand to buy property, unless they have a Thai partner willing to act as guarantor. There are numerous other conditions too, so if you wish to go this route, make sure you have a totally reliable Thai partner, and you have plenty of demonstrated income (either here in Thailand, or from overseas). The purchase money must be transferred from banks outside Thailand , in foreign currency form. The buyer must state that the purpose for the money transferred is to purchase a condominium unit in Thailand on the funds transfer document. The Bank is then able to issue the form of TT3 (Thor Tor 3) or Authority to Purchase for the relevant land office in Thailand , giving the foreign buyer authority to purchase.
How can a foreigner own a house and land in Thailand?
Technically (and in most cases) a foreigner cannot own a house in Thailand as the Thai Government does not allow a foreigner to own land (which a house is obviously built on). In Thailand , a house would come with a title deed (Chanode) that will also show a certain amount of land with the house, which will be registered to the owner of the property as well.
As stated above, legally and technically a foreigner cannot own land in Thailand. There are a few small cases and a few new laws (over a certain age……with so much money…….in certain areas of Thailand……..married to a Thai National……etc.) that might accept foreign ownership of land in their name, but the above is the normal scenario.
Most often, foreigners here form a company of dominantly Thai National shareholders (usually about 20,000 THB to 40,000 THB to form and register the company properly). When a registered company’s shareholders sign ‘share release forms” one individual may ‘become’ the managing director and only signatory for the company. The managing director may then sign for property purchases and the company (managing director) owns the property (house and/or land). A Thai national must own 51% of the firm, but the firm will be organized so that you have all the economic and juridical rights. In addition, by using this system, it will be easier for you to buy a car or to get residence permit.
You have to pay at least 30% as a deposit, and then the original owner of the house is committed to you. The company (managing director) is also able to transfer ownership by selling the position in the company which owns the property and/or sell the property outright at any time in the future. Ownership of land is governed by the Land Code BE 2497 (1954), the Civil and Commercial Code, Land Reform for Agriculture Act BE 2518 (1975) and the regulations set forth by the Ministry of the Interior. For a foreigner who is married to a Thai citizen, the Thai spouse can buy property using his or her name only.
A foreigner who invests 40 million baht or more in a Thai Company is eligible to purchase land and a house at the size of maximum 400 square wah maximum total land area.(1 square wah = 4 square meters). A foreigner who invests with a Thai registered company at 49-51% ownership (unlimited amount), foreigner shareholder at 49% of ownership can purchase land and house with unlimited size and amount of investment through company registered name.
How can a foreigner own a condominium in Thailand?
Foreigners can outright own a condominium in Thailand 100% freehold.
Imagine a building has 100 units. 51 of those units must be owned by Thai nationals. A maximum of 49 of those units can be owned 100% freehold by foreign nationals.
If a building’s foreign quota limit is reached, the only way to purchase a freehold condo at that building is to buy from a foreigner with an existing freehold title.
Alternatively the foreign national can choose to buy from a Thai national but only on a leasehold ownership.
What is the difference between buying Leasehold v Freehold?
Foreign nationals cannot own land in Thailand as freehold. The most common practice for foreigners buying house and land in Thailand is to do a leasehold structure of a maximum of 30 years with the landlord.
This is a watertight contract that is given by the local land office and the foreign national can then technically own the land for that period of time.
The lease can also be extended by two terms of 30 years each, giving the lessee a total of 90 years. This has to be a separate contract between landlord and lessee.
Should you wish to sell the land and house in future before the leasehold term expires, you may do so freely to a Thai or foreign national.
It is up to the landlord to sign the freehold land transfer to the Thai buyer or accept a new term of 30 year lease if it is a foreign national who wishes to apply for a new leasehold term of 30 years.
The foreigner purchasing from you can also simply take over the existing leasehold term if they wish. Meaning if you have owned the property for 5 years, the buyer will be taking over the remaining 25 years of the leasehold term. Even though foreign nationals may not own land, the building itself can be owned outright by a foreigner.
What are the processes to purchase a property?
Once you have found the perfect property with one of our experienced SPS Realty Thailand agents, it is advisable to pay a 10% holding deposit as soon as possible to take the property off the open market. We say “soon” because we have seen some cases where buyers wait too long and the property is sold to another party. It’s also absolutely advisable to consult with a reputable, qualified Thai lawyer when paying the deposit, so they can prepare the relevant reservation deposit or sell and purchase agreements to state the terms of sale.
Normally in the case of a resale / ready to move in property, you pay a 10% reservation deposit to the agent’s company account. Once the deposit is paid, your lawyer will complete full due diligence. When it comes back all clear and there is nothing preventing you from legally buying the property, your deposit becomes non refundable. Typically you would then have between 30 to 60 days for completion of sale and transfer of ownership. This can differ depending on the wishes of both parties.
Buying a made to order or off plan property from a developer, you normally pay a deposit of around 200,000 THB to reserve the property. This is always non refundable. This is then followed by payment of between 20% to 30% on signature of contracts and beginning of construction, followed by staged payments over the construction period of the property.
What documents do you need when buying a condominium?
To put a deposit and sign an agreement the buyer would need to give :
– A certified copy of the passport . (ID card if Thai citizen)
And the seller needs to give :
– A certified copy of the passport . (ID card if Thai citizen)
– A certified copy of the title deed.
Each party shall keep 1 identical copy of an agreement signed.
And on the ownership transfer date at the land department a foreign buyer shall provide documents as follows:
– TT3 (Thor Tor 3) or Authority to Purchase for the relevant land office in Thailand (state in clause 6)
– A certified copy of the passport
– A copy of marriage certificate (if any)
– A letter of consent from the wife or husband (if any) in case either is unable to attend the transaction of ownership transfer.
**all the above documents must be translated in Thai.
Should I renovate a property before selling?
There are a number of things you can do to make your property attractive to prospective buyers. Let’s break it down in an easy bullet point list:
- Make it look presentable – this includes keeping the property clean at all times, making sure it does not look run down, making sure it doesn’t have any unpleasant smells or odours etc. If you do not live in your property it’s best to have it cleaned as often as possible SPS Realty Thailand can recommend good, reputable cleaners.
- Make it available to view during normal business hours on all days of the week. Remember, when someone is looking for a property to buy in Hua Hin or elsewhere in Thailand, they are most likely on holiday or only have time on weekends so it’s best to make your property available as much as possible.
- Price it correctly – SPS Realty Thailand and our experienced agents can provide comprehensive property evaluations in order to make sure your property is priced correctly. Listen to your agent and keep an open mind. We listen to the market and your property needs to be priced according to what the market says. Ask your agent what other properties in the area have sold for recently as a comparison.
- Photos – make sure you have as many high-quality photos as possible. Normally the first impression of your property is online – so the better the photos, the more inquiries your property should receive.
- Be open to negotiation – remember that most buyers of resale or ready to move in properties are looking for a good deal and will most likely haggle. Sometimes more than you expect. Again, don’t get offended and keep an open mind. If someone makes an offer it means they’re interested.
What is the Process to rent a property?
How fast can you find me somewhere to live?
Rental properties are available all over Hua Hin, whether you’re looking for a condo or a private pool villa. Most important are your rental dates required, number of people and budget. Once we know these points we can work on finding the best property for you. Rental properties here move fast, so it’s imperative to find the right one soon and book it before it is reserved by another party. High season in Hua Hin tends to fall between October and March as that’s European winter, so it’s best to find a property to rent at least 3 months prior to arriving as it can be quite difficult to find the right one only when you arrive.
What documents do you need when renting an apartment?
The foreign renter shall provide documents as follows:
– A certified copy of the passport
– A contract rent agreement: the relevant paperwork as contract between the landlord and the tenant. ( At the end of the contract, the landlord will conduct a final property evaluation, any expenses will be deducted and the deposit returned to the tenant)
– A copy of work permit (if any)
What deposit is required?
Most rental periods are for one year, although some shorter terms are available. In most cases you will need to pay a 1 month deposit and one month rental in advance when you sign the contract. Sometimes, especially for longer contracts, the landlord may require a 2 months deposit. The deposit is refundable when you move out, although the landlord may deduct expenses for any damage to the property during your tenancy.
What happens if you have to leave before the lease is complete ?
Generally, if you have to leave before your first year is complete you will forfeit your deposit. We can negotiate that after the first year in an apartment you can leave with 60-day notice without forfeiting your deposit.
Maintenance fee?
If you rent a house, all major maintenance is the landlord’s responsibility. This includes the maintenance and repairs of the power supply, water supply, air-conditioning systems and structural damage not caused by the tenant. The tenant is responsible for minor repairs such as broken lights and windows. If the house has a garden or swimming pool, the landlord or owner is also responsible for the maintenance cost.
Do rentals come fully furnished?
There are plenty of fully furnished apartments and condominiums available. If you don’t plan to stay in Thailand permanently, it may be better to leave your furniture in storage back home. It will probably be too heavy for the tropics anyway. Even if you plan to rent or buy a house, you can always get one fully furnished (most properties, whether houses or condos, come rented as fully furnished). If you prefer to furnish it yourself, we can advise you on the best places to shop – there is a plethora of good furniture stores in Hua Hin.
Utilities bill?
It is a good idea to find out the cost of utilities before you move in so that you know how much you will have to pay. If you are living in a house, we can advise you on the best methods of payment. For example, most utility bills can be paid directly from your bank account and the receipts sent to your residential address. Nowadays, you can also pay utility bills at any 7/11 store.
