Thailand has a complex set of laws regulating the process of foreigners buying real estate. Despite this, the idea of investing in property here is attractive for many, and out of this number, some decide to dive into the venture headlong. However, it is hugely important that first you make out the local property-related laws. Only this way you can be sure that you’re making a sound decision. In our newest article, we will talk about how foreigners can buy property here and what pitfalls they may face during this undertaking.
How Can Foreigners Buy Real Estate in Thailand?
By now, you may already know that a foreign citizen cannot own land in Thailand. This means that basically you can own a house here, but the land on which it stand does not belong to you. Meanwhile, foreigners can buy a condominium freehold. Still, there are some options that those who wish to invest in a villa in Thailand can go with.
Property in Thailand for Foreigners: Houses
If you’re interested in Thailand residential property for sale to foreigners but purchasing a studio apartment or a condo is not an option for you, then you have two possible courses of actions:
Purchasing land through a Thai-based corporation
Mind, however, that the joint venture buying the land should be at least 51% owned by Thai nationals. Some foreigners create a limited company with a majority of shares held by a Thai citizen and then set up an agreement according to which the Thai party passes complete power over their shares to the other country national. However, now such a practice is illegal, and the authorities are now taking action to stop it and apply harsh penalties to both sides. Therefore, if you are not okay with owning land together with another person who most likely will not in any way be related to you, then you’d better choose another option of investing in property in Thailand for foreigners.
Taking out a 30+30+30 years long lease on the land (LeaseHold ownership)
It is a very popular option among foreigners wishing to purchase property in Thailand. It is possible to set up a renewable leasehold agreement. it is important both the lessor and the lessee start taking active action some time before the agreement expires in order to prolong it. Besides, it takes the landowner’s consent to sublease the land or sell and transfer the lease, so make sure these things are written into the contract. Still, if compared to the first option, it has some benefits. For example, the registration fee here is rather low – 1.1% of the rental value.
If you decide to go with the second option, you should bear in mind the following things:
- While drafting the initial agreement, remember to put your children or other family members on the lease. it is important to secure the rights of your family members on the land and installations you will possibly build on it in case of your untimely demise.
- Before signing the lease, see to it that the agreement allows construction on the land and that the permit is applied in your name. This way you ensure you’ll be the owner of the installations built here in future.
How to Purchase a Condominium in Thailand
In our previous article, we spoke about the advantages of buying a condominium instead of investing in a house or a villa. So if you, like many others, decide to choose condos as a more trouble-free investment, here is what you should know about it.
- As you already know, you can buy a condo in your own name. However, it is only possible if at least 51% of the units are owned by Thai nationals and juristic persons. Otherwise, you as a foreigner can only buy a condo leasehold or set up a joint venture, that, again, should be at least 51% Thai-owned. Thus, it may be a good idea to invest in condominium projects in early stages of construction.
- Read the contract thoroughly before you make any deposit or sign anything. Check that the monthly maintenance fee and sinking fund are written into the contract. If you’re not a fluent speaker of Thai, request the contact to be written both in your native language and Thai. You might also wish to hire an independent interpreter apart from an attorney.
- Pay close attention to rules and regulations regarding the everyday life of the residents, as these may vary greatly for different condominiums. There might be some weird limitations regarding pets, parking, decor and other stuff, and it might affect your future lifestyle (if you’re going to live in the condo yourself) or your chances to rent the place out at an advantage.
We hope this information will help you make a sensible investment choice. And if you’re looking for a Phuket condominium, consider Seventh Sky. This condominium boasts of super location – just a two minutes’ walk from Bang Tao, which is one of equipment beaches in Phuket. Bang Tao has a greatly developed infrastructure: shopping centres, restaurants, golf courses, Phuket’s airport are in proximity to Seventh Sky. The condominium is aimed primarily at investors who plan to rent out their apartments. That is why Seventh Sky will have all the facilities typical of a four-star hotel:
- swimming pools;
- reception service and security 24/7;
- children's playground
- kid's club
- GYM on the rooftop floor
- Lounge area on the roof
- Infinity swimming pool on the roof top floor
Moreover, we as a developer will take on the trouble of searching for lessees and interaction with them for the first three years. Meanwhile, we guarantee 8% rental income annually. Browse our website to learn more about Seventh Sky condo.