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Thaiexpatlaw Property buying guide for expats and tourists coming to Thailand
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HOME CHIANGMAI OFFICE BANGKOK OFFICE PATTAYA OFFICE

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24 November 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CALL CENTRE 2010
 
 

 

 

 
BUYING PROPERTY IN THAILAND

WE CAN ARRANGE YOUR WORK PERMITS, PARTNERSHIPS, CONTRACTS, COMPANIES & VISAS THROUGH OUR LAW SERVICE; Title searches, House inspection reports so be safe.

To date foreigners may own

  - a unit in a registered Condominium

  - a building (as distinct from its land)

  - a registered leasehold of up to 30 years for all types of titled land (and/or buildings).

  - a company can purchase land and buildings but will be inspected and all Thai shareholders veted.

  - more than 49% of a condominium unless in Company form.

  - foreigners can own land being 49% in a company but the company must operate a business & shareholders interviewed so not that easy anymore

  - if you invest 40m baht you can buy 1 Rai of land in Thailand outright. 

Thailand has so many different types of properties for sale that whatever your dream home is, you can realize it here if you do the paperwork right. Prices are a lot cheaper than Western houses but some aspects need close scrutiny especially wiring, water & most importantly the deed title. Now that you want to buy a house what should you look for? 

The first thing you need to do is obtain the services of a reputable real estate agent or lawyer on your behalf. The Thailand Realty Industry is not regulated so watch out for agents forcing you to sign contracts, & check the title deed to make sure the property is what it says. Do yourself a big favour and obtain a House Inspection report which in effect pulls the holes out of the property! Some buyers have bought the house only to find the land is on a different title & visa versa or the cracks have been disguised. Once you buy then its your problem.

PAYMENT:

A deposit of 10- 30% is usually required to secure a property and total payments should be made within 30-60 days (see your lawyer first) but normally once the transfer has gone through. If signing a purchase agreement then up to 30% down & 70% following transfer. Normally the seller will pay the changeover tax which starts at 2.5%. However if the seller has owned the house longer than this [period it is discounted. Some Land Offices will charge up to 8% depending on the area and office. An agreement can be made between buyer and seller than each pay 50%. You can obtain longer periods but you will probably be required to pay a higher deposit. Deposits are normally non refundable, except by default of the vendor, so bear in mind that once the deposit is placed you are committed.

This situation also prevails for the vendor. He must refund your deposit and pay a penalty of an equal amount if he defaults on the contract. Deposit in escrow is still rare in Thailand, but it is becoming an increasingly recognized way of proceeding. It generally trades off greater security for the buyer's deposit versus a weakened claim for damages in the event of vendor default. 

Beyond the price, payment and closing schedules, it's important that a contract includes clauses to cover who will pay the legal fees, transfer fees and taxes (there is often a business tax and always an income tax assessment made at time of sale) as well as an understanding of the value at which the sale will be declared - this is typically (for tax reasons) at or close to the government minimum assessed value.

A foreigner buying a condo must transfer funds from a bank account out of Thailand in foreign currency and verify the  transfer on paper. The transfer of funds must be in the same name as the name that will appear on the final purchase contract ie. the buyer. Funds must be transferred into a Foreign Currency Account in Thailand opened in the Buyer's name. Use Bangkok Bank, Thai Farmers Bank and Siam Commercial Bank and make sure you tell them that the purpose of his or her opening a Foreign Currency Account is to purchase a condo in Thailand. This law is somewhat a catch 22 situation as the Foreign Banks usually will not write such a letter but don't worry. You can remit as much as you like to Thailand via your bank. Transfers out of this Foreign Currency Account in Thailand into a Thai Baht Account or some form of Thai Baht draft or check to the Seller must be made in amounts US$5000 or more in order to qualify for a "Tor Tor 3" Certificate issued by the Buyer's bank to verify that the originating funding came from outside Thailand in a currency other than Thai Baht. On the "Tor Tor 3" Certificate, it should state explicitly that the Thai Baht funds are used "to purchase a condominium" in Thailand. Taxes are payable by the buyer or seller of a condo in Thailand such as the Transfer Fee/Stamp Duty Tax of 0.5% usually payable by the seller upon the date of the actual sale or a Special Business Tax of 3.3% which is usually payable by the seller if the property has been owned for less than 5 years. By the way there is no limit on how much you can remit into a Thai account from overseas and no tax. Tax levied at 15% is on interest earnings only.

REMITTING FUNDS: If sending over funds to purchase a house you must tell the National Bank what you are using this money for with sums exceeding 2,000,000 baht quantities. If remitting funds from abroad to purchase property which is the law over sums of 2m baht it may save you when it comes to a divorce situation of whose funds were used to purchase the property. If you wish to know more than ask us.

COMMISSIONS

Are normally 3% -5% but some charge 10%. Watch out also as some realties charge both the seller and the buyer & even hike the price up and have deals with the owners. We do not do this.

 

 

BUYING NEW CONDOS NOT BUILT

Some Chiangmai condo buildings are not desirable and have a bad track record of trying to get all the money from a foreigner with sub standard finishing and not abiding by the contract that the foreigner signed. If this Company does not complete the project it is a court case to try to get your money back and can take a long time. Please note some buildings we know we will not be a party of selling them. If you are not sure get a good lawyer who can check the company out or ask us. If you pay based on the glossy sales pitch or even give a deposit this is normally non refundable. We have had problems selling Twin Peaks Condos but have assisted the buyers as best we could.

BUYING A CONDO:

A foreigner can ONLY own a condo in his / her name OUTRIGHT. You cannot own a house and land in your name unless you invest 40m baht  = 1 Rai of land. Bank's do not lend to foreigners; only Thais or Companies and you must lease, or have a Thai Company to own a house in your name. Ask us if you wish to borrow (must have overseas collateral).

Just a note about buying Condos. ---Find out what the monthly maintenance costs are from the managers. Ask for this in writing. Avoid unfinished projects as they may run out of money or be over mortgaged. If very few condos have been sold in a building with good amenities like landscaped grounds, security Guards and a receptionist and office have the title searched but most of all someone has to pay for all this, plus the electricity for lighting and lifts. The total cost (often inflated) has to be divided up among the condo owners, which can be a lot if only a few units have been sold. Ask for an exact statement of maintenance costs and how they are paid. If the project has different size condos in the same building, large units will pay more towards maintenance costs than small units. If you are a legal resident you can obtain a mortgage but you need to check with your bank and credit. The best idea though is pay cash as you can negotiate but you must remit from abroad. In Bangkok look at around 25,000 -100,000 baht per sq m. A foreigner can only buy max 40% of a condo unit so if that 40% has been taken up and you are the 42% person you may find you are buying a lemon so to speak. If the developer owns a majority of units you may not like his manager but if the owners have majority votes than they can remove him.

The Condominium Act has been amended. Now 49% of units in all condominiums and  100% of units in condominiums in a total development area under 5 rai located in Bangkok, all municipal districts and such other areas as shall hereafter be announced by the Minister of the Interior (which is expected to include rural Phuket) can be foreign owned. Funds used to buy a condominium & remitted from abroad are recorded by a Thai Bank on a Tor Tor Sam. Purchases of condominiums by foreigners come under the Condominium Act B.E. 2535 (1992). The owner of each condominium is issued with a certificate of unit ownership. The certificate also has a statement with percentage rights over the common areas of the building each owner has.

COMMISSION PAYMENTS:

Are normally levied on the seller rated at between 3 & up to 6% of the asking price. Some agents are known to charge a commission from both the buyer and seller while we are told 10% is being levied by some. Due to the unregulated realty industry you must use discretion when buying off any agent or person. Ask how long they have been in business & look at their company papers for proof. If they say the price of a house does not include their commission, chances are this company is getting a cut both ends. Our company levies a commission solely on the "seller" & makes sure the person buying is getting the best deal for their money. We normally only sell houses that have a chanote (clear title). 

ONSITE INSPECTION REPORT:

If you want to make sure your house is safe and has what it should have & hasn't had recent false renovations, hidden maintenance, then we also conduct a professional onsite inspection house appraisal of the home you want to buy or sell. This inspection is over and above your title search but compliments the title search as we work in with our own lawyer.  This 5-8 page onsite inspection report covers everything from electricity, inside and outside structures, water supply, plumbing, and general condition of your house & land, elevation etc in a check list report. Added to this we give you the buyer, a full written maintenance report plus our suggestions and recommendations all in English. We even oversee the recommendations on your behalf.  Cost for this Inspection ranges from  5000 baht for new houses under 2 years old to 6-8000 baht for a standard 3-6 bedroom older house, condos 5000 baht as we look at the entire building ( This does not including away travelllng expenses). eg. cost to inspect in Bangkok is 12,000 baht to start and extra if we have to travel.----takes 3-4 days ----report printout. We do not conduct land area searches as survey pegs are not shown. For this you need a surveyor which we can obtain for you.  Other buildings like Commercial properties we can quote you. PLAY IT SAFE-- WHY HAVE A HOUSE THAT WILL NOT LAST!!!!!! As of August 2005 we have managed to assist foreign clients before they buy with the knowledge that the seller will initiate our recommendations & saved money for our clients. It is worth it to have these houses inspection reports.

We highly recommend you obtain a Title search and House Inspection report before you purchase ANY property in Thailand. Cost Title search = 7000 baht  Comprehensive Title search as well as House Inspection fee starting at 3000 baht. 

KITCHENS & AIR CONDITION INSTALLATIONS:

When buying an existing home or new house you may want to have a new western style kitchen installed or maybe air condition units. If we carry out a Housing Inspection then we also in our report have a free quotation for air condition units and kitchen joinery for you with FREE installation or arrange on your behalf. We can help you with the top Kitchen manufacturers.

 

ARCHITECT: 

Ask no further as we use Khun Da in ChiangMai recommended to us who speaks excellent English and whom one of our partner's Dr. Harry Gair is presently using. We can arrange for you as many foreigners use her services.

INSURANCE:

We use the services for all your house insurance. Please just ask us as we are agents for Thai Zurich in Chiangmai and all over Thailand. Need to know more then ask us. We can advise you on all your insurance needs & whether you go through us or you do yourself there is no difference in the price. However using our services we make sure you are happy before you even have to pay any more------- no hidden agendas as we are safe.


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