Thinking about buying a property in Thailand? Your choice is perfect as the real estate market in the country is currently booming. A wide range of property in numerous different places across this nation is available and you can choose whatever you want, from a seafront villa in Phuket to a high-rise condominium in Bangkok. If you are a first-time property buyer who is looking for a place to rent out or a place to call home, here are some tips that may help you find your dream property in Thailand.
Know the difference between foreign ownership and Thai ownership
The most important thing to know if you’re looking to buy real estate in Thailand is knowing what you can and can’t own. The key aspects you need to consider is that foreigners can’t own land in Thailand, but you can own one or more condominium units, as long as 51 percent of the development is Thai-owned. Land ownership is exclusive for Thailand citizens to prevent unreasonable pricing of property because of foreign bidding. However, there are ways around it if you have your heart set on other types of property that aren’t a condominium unit. Your options are:
- Leasehold for 30 years. You can obtain leasehold rights to houses, villas, and other property types for 30 years. You can also put extensions to the agreement to renew the lease term up to three times, meaning you can increase the lease term to 60 or 90 years.
- Through a Limited company in Thailand. You can set up a Thai Limited Company, but you can’t hold half or more than half of the company’s shares. You can only own 49 percent of the share, while the remaining 51 percent must be Thai-owned (except if you are a US citizen, who has an agreement with Thailand for full ownership). The Thai owner can sign over the company to you. However, the immigration office will monitor your business closely to make sure your business dealings are compliant with the relative Thai laws.
If you want to choose any of these options, you must make sure that all details on the agreements and documents are 100% accurate, particularly the details regarding title deeds and ownership. There is also another way to own land and properties in Thailand. This option involves legally marrying a Thai woman/man, which also comes with rules to comply with. Since all of these options are pretty complicated, most foreigners choose to buy condominium units.
Choose the right location
Whether you want to live in the property you’re going to buy or rent it out, you don’t want to live in a place with an undesirable environment or no amenities around. Most people don’t want to live or stay in a place where they have to walk 20 minutes for a pack of milk. Knowing the right location of the property will make it easier for you to lease or resell it. The main aspects you should consider include main road accesses, public transports, and amenities (such as retail complexes and hospitals).
If you want to rent the property out, decide who your targeted tenants are. For instance, if you want to buy a condo unit in Phuket for tourists, make sure the place is within close proximity to the island’s tourist hotspots or top restaurants. If you want to rent it out for families, your property needs to be close to schools, workplaces, shops, hospitals, and recreational locations. You need to dig a little deeper about the location before you close the deal. If you’re looking for a return of investment, look for properties that have unique selling features and have less competition when you want to sell it.
Study the market
Different regions, different property markets. The property market in Koh Samui is very different from the property market in Bangkok. Analyze similar properties in the same area, study the average pricing of similar properties, track the area’s census records, find out why the area is or is not attractive to people. Find out if there is a nearby school or business that makes the property ideal for those who want to rent a house, or if there’s a tourist destination around that makes short-term tenants want to rent your property.
Inspect the property
One of the most basic parts of buying a property in Thailand (or anywhere else in the world) is doing a thorough inspection. Inspecting the property before signing the deal can save you a lot of time and money. Once you find a property you want to buy, do not rush into signing the contract. Inspect it very closely to ensure that it is in perfect condition and if it is a suitable leasing property. Another benefit of inspecting the property is it will give you the power to bargain for lower prices, particularly if you find cheap flooring or leaking plumbing. If you are buying a condo, contact a few other owners and see if they are satisfied with the quality, maintenance, and construction of the condo.
Buying and deposits
Just because you are in Thailand, doesn’t mean you don’t need a lawyer. You do need to hire a lawyer to help you with buying a property in this country. Once you have found your dream property, you need to negotiate the deposits. All of the legal procedures must be done by a lawyer, specifically one that is familiar with the area. Always make sure that every transaction is accompanied by a detailed legal agreement signed by both parties and stipulates the contract terms as well as the exact conditions of the deposits. Remember, property developers, agents, and sellers are doing the same thing: trying to sell properties. So they will try their best to make sure you are quick on the deposit. In general, the deposit in Thailand makes up for about 10 to 15 percent of the purchase price.
The normal property tax in Thailand is between 3 to 8 percent annually. The tax depends on several factors, such as whether your name is on the property registration documents or not and length of ownership. As there is no capital gains tax in Thailand, you also need to pay income tax when you sell the property. Taxes related to property ownership in this country are lower compared to taxes in other parts of the world, which is why it is the perfect place for property investments.