Purchasing in Thailand
Process of buying apartment in Thailand
The basic laws governing the relationship between the Kingdom of Thailand and investors are Act on condominiums (№4) of 2008, Land Code and the Foreign Affairs Act.
In Thailand the sale of land to foreign citizens is forbidden. But Thai law allows foreigners to purchase flats in condominiums into private ownership. The only condition of such purchase for foreigners not living in Thailand permanently is money been to be imported into the country abroad that must be confirmed by a special document issued be one of the banks of Thailand. Purchase of flat in the apartment building (condominium) is the simplest way for foreigners to get the property in full ownership. There are only two restrictions:
1. The number of sold flats to foreigners must not exceed 49% of the total number of apartments in condominium.
2. Money for purchase of flat should be transferred abroad with the purpose “to buy property”.
To buy a flat in Thailand the private foreign person can in accordance with the Law on Condominiums of 1992. The owner of each flat is issued a personal certificate of ownership. This certificate is fixed which part of the condominium in percentage belongs to each owner. If the quota on foreign ownership of the condominium have been exhausted, so the possibility of buying an apartment on the Thai legal person or lease remains. You should separate the possibility to purchase flat in a house under construction and in a ready built apartment house. When buying a flat is a ready built apartment house you have to pay the entire cost of the flat at once. When buying a flat in a house under construction, as a rule, the initial payment is about 25%, other 75% should be paid In parts before residence in the apartment. It is convenient for the buyer – it is not necessary to invest the entire amount of money immediately, on the other hand, it encourages the developer to complete the project on time. Due to the fact that the flat in Thailand becomes more expensive immediately after construction by 10-20%, investment in an apartment building under constuction is one of the best. The weighted average yield from renting apartments in Pattaya is in the order of 6-8% per year, i.e. investment in the apartment is returned in 10-12 years. When buying an apartment, there are additional costs with the payment of process of the transfer of ownership from one individual to another or of the registration of the first buyer. Under current law, it is about 6.5% of the BASE cost of the apartment in the registry of the Land Department. In practice, this amount ranges from 100 to 300 thousand baht, depending on location and size of the apartment. In the legislation there is no clear guidance on which party should pay the transfer of ownership (Transfer fee), so this is an opportunity for negotiations.