Frequently Asked Questions (FAQs)
1) What Should I Look for in a Property?
Whether you are considering purchasing property there are several infrastructure and other considerations which must be taken:
- - Location - Roads, proximity and access to business, shops, hospitals and etc.
- - Telephones - Access to direct lines and IDD facilities
- - Water - Mains water and supplementary storage facilities.
- - Electricity - Mains connection, and backup generators for condominium blocks
- - Security - 24 hours security service, door and window locks
- - Cable or Satellite TV connection
- - Pest Control - localised spraying and fly wire screens on windows
- - Hot water facilities - nearly all in Thailand are instant and not storage
- - Air Conditioning - a necessity in Thailand
- - White Goods - Refrigerators and Washing Machines
2) Can foreigners own property in Thailand?
Yes, Foreigners are able to purchase property Freehold with a Condo title deed and lastly via ownership through a Thai Limited Company with the most typical being a Condominium ownership with a Freehold title deed. However, foreigners are limited to owning up to 49% of a particular Condominium building, also referred to as a Foreign Quota. Each building has a breakdown of the total number of Square Meters owned by foreigners to which must not exceed 49% of the total number of Square Meters within the development. Owning a Freehold property with a title deed through shares in a Thai Limited Company can be accomplished; however this is highly regulated by the Thai government and would not be recommended if the limited company is not practicing any business.
3) What are the Property Taxes in Thailand?
Property taxes are payable upon the sale of a property at the Land Department. The rates are:
- - Transfer fees: 2% of the Registered Value of the Property
- - Stamp Duty: 0.5% of the Registered Value, Only payable if you are Exempt from Business Tax
- - Withholding Tax: 1% of the Land Department Appraisal Value of the Property
- - Specific Business Tax: 3.3% of the Land Department Appraisal Value of the Property, payable if the property is sold within 5 years of Purchase (for Both Private & Corporate ownership), For Thai nationals if you own a property and Register the property as your residence (in the House Registration book) for a period of 1 year or more, then you will be exempt from this.
4) Can foreigners obtain a mortgage loan?
Foreigners generally cannot obtain a mortgage for properties in Thailand, however, most of the financial institutions in Thailand provide loans for real estate purchasing to Thais and Thai companies. It is common for a real estate developer to arrange for his customers to have a financing package from a financial institution. In most real estate development projects, a down payment can be made in installments from 10 to 24 months. After the down payment has been paid, the sale contract will be made and the balance amount is paid through the loan which is financed from a financial institution. The financial institution requires you to mortgage the property with it as collateral against the loan.
5) What does ‘Foreign ownership’ exactly mean?
Foreign ownership means that a condo can be bought in your own name (and it remains in your name forever) – it is the equivalent to freehold property. A condo or apartment can be bought either in your own name depending upon the circumstances of the condominium complex. Ownership laws are actually very straight-forward and our team of lawyers and public notaries can handle everything for you when you have found your dream property with 2nd-home.
6) Is it possible to sell the property in the future?
Any property is possible to sell in the future, even leasehold property can be resold, in the case that a freehold property is resold and you would like to take the money back out of Thailand you will need the Foreign Transaction forms (FTF) to show to the bank that the money used to buy the property originally came from outside Thailand and then upon transferring the money back out of Thailand you will only be taxed on any profit you have made from the resale of the property and not on the total amount.
7) What is a Foreign Transaction Form (FTF)?
A Foreign Transaction Form (FTF) is an official bank document issued by the receiving bank upon the receipt of foreign currency into your bank account in Thailand. You must request a Foreign Transaction Form from your bank when you are transferring funds to Thailand for the purpose of purchasing a condominium, apartment, land or house, and the document must specify that the transfer is solely for the purpose of purchasing a property/condominium. This is a very important document and you should retain copies so they can be used if you ever sell your property and wish to transfer the money out of Thailand again.
8) What is a Tor Tor Sam (3)?
A Tor Tor Sam (3) is an official bank document issued by the receiving bank upon the receipt of foreign currency into your bank account in Thailand. You must request a Tor Tor Sam from your bank when you are remitting funds to Thailand for the purpose of purchasing a condominium, and the Tor Tor Sam must specify that the remittance is solely for the purpose of purchasing a property - Code 5.22.
9) Do They Have Title Deeds in Thailand?
A Title Deed is the purest form of evidence that an individual owns a piece of land. Title Deeds are given only for areas of Thailand which are surveyed. For areas which are not surveyed, there are other documents for land possession such as evidence of the possession of the right to utilize the land or other interests in the land. These documents are called "Nor Sor Sam (3) and Nor Sor Sam (3) Kor". Unlike the Title Deeds, these Nor Sor documents are issued to show the possessors' exploitation of the land. Though these documents do not provide ownership rights, as do Title deeds, they can still be registered for transfer of the lands for which they are issued.