The Thailand property market is thriving, but it’s important to be aware of the legal restrictions that apply to foreign buyers. In addition, buyers should familiarize themselves with the country’s mortgage options.
Conducting a thorough due diligence is also essential. This process includes a title search that verifies the legal ownership of a property and checks for any liens or encumbrances.
Location
The location of your property in Thailand is a key factor when buying real estate. The country’s popularity among expats and natural beauty make it a desirable destination for many buyers, but there are some considerations to keep in mind. As a potential buyer, you should consult with an expert and understand the rules governing foreign ownership of real estate in Thailand. This process is crucial for avoiding any issues later on.
Typically, foreigners can only purchase land through a limited company or joint ownership with a Thai spouse. While this method provides more complete property rights, it can be expensive and requires considerable legal expertise.
The Covid-19 pandemic has affected the property market in Thailand, with prices static or falling1. However, the condominium market remains a strong seller, attracting both local and foreign buyers. This may be a sign that the market is recovering, although it is difficult to predict whether prices will continue to rise or fall.
Property type
If you’re looking to invest in Thailand, it’s important to know that the property types available here are quite diverse. You can choose from apartments, houses, and condos. There are also villas, which offer more privacy and space. Choosing the right property type depends on where you’re buying and your budget.
Another thing to keep in mind is that there are some restrictions on the property types that foreigners can buy. For example, in the case of apartment buildings, foreign ownership is limited to 49 percent of the total number of units in the building. It’s important to work with a reputable lawyer to make sure you understand these limitations.
In addition, it’s important to understand the local taxes and fees before buying a home in Thailand. These costs should be incorporated into your budget, as they can add up to a significant amount of money. These expenses include a transfer fee, stamp duty, and withholding tax.
Budget
Most foreign buyers are drawn to condominiums in the heart of major cities and tourist hotspots, but there are also plenty of spacious villas for those with more modest budgets. However, these can come with additional costs like maintenance fees and property taxes, as well as a deposit and legal expenses. These are usually negotiated by the buyer and seller. In some cases, these costs can be reduced by shopping around for specialist international payment providers that offer a fast, secure service and can save you money on exchange rates.
While buying a property in Thailand may seem complicated, it’s not as difficult as you might think. The first step is to research the market, preferably with a professional. It’s also a good idea to work with an experienced mortgage broker who can help you secure financing. Once you have your finances in place, it’s time to start searching for the perfect property.
Legal requirements
Buying property in Thailand is possible for foreigners, but it requires a lot of research and legal expertise. It is highly advisable to work with a competent real estate agent to avoid any hidden costs. They can also help with the negotiation process and ensure that all the necessary documents are in order.
Foreigners are not allowed to own land directly, but they can buy villas and houses separate from the land by entering into leasehold agreements. These agreements typically last 30 years and can be renewed twice. However, the contract must clearly indicate that ownership of the house is transferred separately from the land.
Another way for foreigners to purchase land in Thailand is through a Thai limited company. This method involves significant risks and should be carefully considered. However, it is also a way to avoid high taxes and fees. These taxes include transfer fees, specific business tax, and stamp duty.
Real estate agent
While buying property in Thailand is a great investment, it requires careful consideration of the local laws and restrictions. It is best to work with a real estate agent who knows the area well and can assist you in finding the property of your dreams. They can also save you time and money by negotiating with the seller on your behalf.
Typically, foreigners can only own land and houses that are built on it or condominiums registered under the Thailand Condominium Act. There are, however, a few other cases where foreign ownership is possible. For example, foreigners can own apartments in buildings that are not registered as condominiums but have similar features.
While it is not mandatory, you may want to have a building survey done by a qualified surveyor. This will help you understand the condition of the property and uncover any problems. If you need to transfer large amounts of money abroad for your property purchase, Wise can help you navigate international transfers and save on exchange rates.
Mortgage
Buying a property in Thailand is a big financial commitment. For this reason, many foreigners seek mortgages from international banks that operate in the country. Typically, the lender will allow you to borrow up to 70% of the property’s value. This percentage may be higher for new construction projects.
It’s also advisable to conduct a thorough due diligence process to ensure that the developer is credible. This includes analyzing the company’s profile, reputation, and financial stability. You should also examine the project’s building and environmental permits. In addition, it’s recommended to get a property survey done by an RICS-registered professional.
While foreigners are not allowed to buy land in Thailand, they can acquire condominium units under leasehold terms and freehold properties within the foreign quota. The latter offer a more secure investment opportunity, with the highest level of ownership being the ‘chanote’, a land title deed that offers full private ownership.