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Buying Property in Thailand

With International travel becoming easier and usually more affordable, people from many Countries are seeking opportunities further afield with regards to Holiday destinations or future retirement options. With the opening up of the ASEAN economies as the AEC due in 2015 and the ongoing and relatively enthusiastic expansion of both the MRT and BTS train systems around Bangkok, these two factors combined should lead to not only a boom in the Bangkok economy, but also an increase in property prices in Bangkok and also in other areas of Thailand.

However to take advantage of this, expats have to buy into the Thai real estate market. This post reviews how foreigners have been investing in real estate in Bangkok & Pattaya.

Can you own property in Thailand?

Buying a condominium in Thailand as a foreigner is the easiest and most straightforward method to invest in real estate. Due to the 1979 Thailand Condominium Act, foreigners can own condominiums anywhere in Thailand 100% outright, as long as the building has not already sold its 49% foreign quota. Each condominium in Thailand when registering with the land department designates 49% of its units for sale for potential purchase by a non-Thai buyer.

Buying Off-Plan normally also allows you to spread your payments over the term of the build. A typical example would be 30% Deposit, 20% paid over a 24 month period, with the final 50% paid upon completion. Different Developers offer different terms so please speak to us about your own personal requirements.

Unlike UK Developers the initial selling price for an Off-Plan property usually increases as the construction progress’s. This allows the Developer to raise early funding, whilst allowing the purchaser the opportunity to see the value of his asset increasing during the build period. This in turn leads to potential Gains and increased yields on rental properties.

This is why you will see Condominiums for sale in Thai, Foreign or Company name. Foreign name allows you to own the property 100%, Thai name is only for Thais, whereas Company name is normally a Thai name unit owned by a Company which you would be the major shareholder of. In reality for off-plan Condominium there are only Thai and Foreign name units and it would be up to the purchaser to establish a Company to hold the Thai unit in.

Financing may also be available and again we can assist with this process for you.

Unlike condominiums, which of course are covered by the Thailand Condominium Act of 1979, townhouses and detached houses are ‘landed’, they essentially contain an area of Thai land underneath them or around them. As it is not possible for foreigners to own Thai land, then an expat wishing to buy a townhouse or detached house has two options.

The first option I will cover quickly and briefly as it is not really relevant to this article, but realistically it would be inappropriate not to mention it. This option is often taken up when the expat or foreign investor knows that he has a stable and solid relationship with their spouse or partner that they can trust. And therefore the property is bought 100% in the Thai person’s name and of course this also opens up the options for finance from a Thai bank.

Option 2 however is the method chosen by foreign investors that feel they do not have the above luxury. They are open to start a company in Thailand in which they can own 49% of the shares. This may sound unappealing, but with the other shares split over 7 or more locals and more than often none of them having any voting rights or knowledge of each other, most foreign investors realize that the company is controlled by them. This means that the property purchased can be placed under the umbrella of the company and therefore controlled by the foreign director.

As unusual as a lot of the above sounds to the first time reader, and as ‘fishy’ some of the details come across on the initial read, the systems do in fact work and the savvy expat or foreign investor can and regularly does successfully buy and sell real estate in Thailand. Foreigners have been buying real estate in Thailand regularly for the last three decades and more and more invest in Thai real estate each year. This would not be possible if foreigners were being consistently ‘cheated’ out of their money by the laws of the land.

With Condominiums, complete with a pool, being sold for a fraction of the cost of a comparable property in Europe, it is easy to see why Thailand is such a popular choice.

Speak to us about your requirements and plans. PPA, saving you money every day.

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