How Can a Foreigner Buy Property in Thailand?
Thailand is one of the most affordable and attractive destinations for a comfortable holiday in 2024. One of the highlights is the «Phuket Sandbox» programme, which allows vaccinated tourists to travel freely around the Kingdom after staying in Phuket for just seven days. The No Quarantine policy has been simplified, eliminating the need for PCR tests upon entry. This change has provided a great opportunity for foreigners who were interested in purchasing real estate in Thailand but were previously unable to do so due to quarantine restrictions.
In this article, we provide a detailed guide on how real estate transactions work in Thailand, the rights and responsibilities of foreign buyers, and whether it is easy for foreigners to purchase property in the country, including apartments and other types of real estate.
CONTENT:
- Features of Buying Property in Thailand
- How Does the Property Buying Process Work for Foreigners?
- Types of Property Ownership in Thailand
- Real Estate and Residence Permits in Thailand
- Responsibilities of Foreign Homeowners in Thailand
- Step-by-Step Guide to Buying Property in Thailand:
- Property Selection and Reservation
- Legal Aspects
- Sales Contract
- Money Transfer
- Property Title Transfer
- The Registration Procedure
- Assistance with Purchasing Real Estate in Thailand
Features of Buying Property in Thailand Thailand is not only a popular tourist destination but also attractive to real estate investors. Foreigners purchase properties for personal use, for permanent or seasonal residence, or as investments to generate rental income. Thailand's real estate market has become even more appealing after prices dropped due to the pandemic and the introduction of the Kingdom’s guaranteed income programmes.
If you're planning to move, it’s advisable to rent a property before making a purchase in Thailand. Rental options range from houses to apartments and condominiums, all equipped with modern amenities like swimming pools, fitness centres, and recreational areas.
Rental prices for all types of properties, from villas to high-rise apartments, are generally much lower than in major European cities. Even in popular regions and cities of Thailand, rent is often less than half of what similar housing would cost in the US or Paris. Be sure to confirm with the landlord whether fees and amenities are included in the rental price.
How Does the Property Buying Process Work for Foreigners? Foreign non-residents can purchase property in Thailand with certain limitations on land ownership. While foreigners are not allowed to own land, they can still acquire various types of real estate.
Types of Property Ownership in Thailand Thailand offers two main forms of property ownership, both of which are globally recognized:
Freehold: In a freehold transaction, the property becomes the buyer's full ownership. Freehold properties can generate passive income, be inherited, or gifted. The buyer receives a chanote, an official document that certifies ownership.
Leasehold: This is a long-term lease, usually for 30 years, with the option to renew twice, extending the lease to a total of 90 years. While the property ownership is time-limited, it can still be sold, inherited, or gifted. Leaseholds are registered and certified by the Thailand Land Department.
What Types of Property Can Foreigners Buy? In freehold zones, foreigners are allowed to purchase apartments in condominiums. These residential complexes have shared common areas owned jointly by all apartment owners.
Important Note: Condominium developers can sell only 49% of the units to foreigners, with the remaining units subject to leasehold agreements.
Foreigners can also purchase detached houses, villas, and townhouses under a leasehold or freehold agreement, but the land surrounding the property can only be leased.
Exception: Foreigners can acquire land only if the transaction is made through a legal entity, with 51% of that entity owned by a Thai citizen.
Real Estate and Residence Permits in Thailand Purchasing property in Thailand does not automatically grant a residence permit. However, there is an option to obtain a long-term visa through the Thailand Elite programme, which requires an investment of $17,500 (THB 605,000). Some developers in Thailand also offer assistance with visa applications when you purchase property from them.
Responsibilities of Foreign Homeowners in Thailand
Foreign homeowners in Thailand are required to pay utility bills and taxes in a timely manner. Additionally, when purchasing real estate, they must pay a one-time registration fee to the Land Department, typically ranging from 2-3% of the property’s value.
Tax residents of other countries (those living outside Thailand for more than 183 days a year) must also comply with their home country's tax regulations. This includes notifying tax authorities if they have opened a bank account in Thailand or conducted other financial transactions.
Step-by-Step Guide to Purchasing Real Estate in Thailand
To understand the process of buying property in Thailand, here’s a breakdown of the key stages:
1. Property Selection and Reservation
The first step is selecting and reserving the property. This involves signing a contract with the seller that outlines details about both parties, property specifics, and the payment schedule. The buyer typically pays a 1% deposit to remove the property from the market.
Important: If the buyer cancels the transaction, the deposit remains with the seller. However, if the seller cancels, the deposit is returned to the buyer.
Documents needed for reservation:
- Copy of buyer's passport
- Email address
- Phone number
- Postal address
2. Legal Aspects
It’s crucial to verify the legal integrity of the transaction. Hiring a lawyer can help with checking the property and ensuring all legal norms are met.
Lawyer services include:
- Verifying land ownership and any existing debts
- Checking the seller’s credentials
- Reviewing and modifying the contract
- Registering the transaction with the Land Department
3. Sales Contract
Once the deposit is paid, the seller provides a sales contract. This document contains all the information regarding the property, terms of purchase, financial obligations, and any penalties for breaching the agreement.
4. Money Transfer
There are two main ways to transfer payment in Thailand:
- Primary Market: The buyer transfers funds directly to the developer's account listed in the contract.
- Secondary Market: The buyer opens a Thai bank account and transfers money from their home country. Once the transaction is registered, the buyer issues a cheque to the seller.
Important: For freehold property, funds must be transferred from an overseas account. For leasehold property, any payment method is acceptable.
5. Property Title
All real estate transactions must be registered with the Land Department. Foreign buyers often bring a Thai representative to help with the process, as local staff may not speak English well.
Registration Process:
If buying in the primary market, the developer handles the registration. For secondary market transactions, legal assistance is recommended. Once registered, the buyer receives key documents such as the Thai sales contract, the chanote (property title), and a house book.