Property Buyers in Thailand: Top 10 Most Frequently Asked Questions
Many foreigners are drawn to Southeast Asia and dream of settling down in Thailand. However, purchasing property in Thailand raises many questions. Here, we will address the top ten most frequently asked questions by property buyers.
CONTENT:
- Can foreigners own property in Thailand?
- How does a foreigner buy land in Thailand?
- Can a foreigner rent real estate?
- How is land rented?
- Do foreigners have to pay property tax?
- Can foreigners rent out their home?
- How to buy a property in Thailand remotely?
- Can I get a visa when buying a property?
- How to buy property with a mortgage?
- Is it possible to transfer ownership through inheritance?
- Conclusion
CAN FOREIGNERS OWN PROPERTY IN THAILAND? Foreign individuals or legal entities can own property in Thailand under the conditions of the Commonhold Property Act, provided the following requirements are met:
- The property is located in a building registered as a commonhold property.
- Thai citizens own at least 51% of the property in the building.
- The buyer must have foreign currency equal to or greater than the value of the property. This money must be exchanged for Thai baht at a local bank, and a certificate of exchange must be obtained to submit to the Land Department as proof of purchase.
It is important to note that foreign ownership is an individual right. As a result, foreigners cannot transfer ownership of a property to another foreigner unless that foreigner has the right of ownership under the Commonhold Property Act.
HOW DOES A FOREIGNER BUY LAND IN THAILAND? According to the Land Code Act, foreigners cannot directly own freehold land in Thailand. However, foreigners can establish a Thai limited liability company to buy land. In this case, foreigners can own up to 49% of the company, while Thai citizens must hold the remaining 51%.
For this arrangement to be legally recognized, the company must be a legitimate business with income and real Thai shareholders. This allows the company to purchase land or real estate legally.
CAN A FOREIGNER RENT REAL ESTATE? Yes, foreigners can rent real estate in Thailand without restrictions. There are no specific laws prohibiting foreign nationals from renting properties in the kingdom.
HOW IS LAND RENTED? A land lease agreement can be signed for a term of three years or more. The lease must be registered with the Land Department, and the appropriate taxes must be paid. The maximum lease term is 30 years, with an option to extend the lease for another 30 years.
DO FOREIGNERS HAVE TO PAY PROPERTY TAX? Foreign property owners in Thailand are required to pay annual property tax on land and buildings in April each year. This tax, introduced in 2019, is relatively low compared to other countries and is based on the assessed value of the property, ranging from 0.03% to 1%.
When transferring property ownership, a 2% tax is applied based on the property's value.
For long-term leases, a 1% registration tax is levied on the rental value of the property.
CAN FOREIGNERS RENT OUT THEIR HOME?
Yes, if you own property in Thailand, you can rent it out even as a foreigner. Some banks offer the option to open a dedicated account for collecting rental income.
Important: Property owners who rent out their homes must pay income tax. This tax is calculated on a progressive scale, ranging from 5% to 35%.
HOW TO BUY PROPERTY IN THAILAND REMOTELY?
To purchase property remotely, you need to appoint a trustee who can represent your interests in all legal procedures, including working with the Land Department for ownership registration.
CAN I GET A VISA BY BUYING PROPERTY?
Purchasing property in Thailand does not automatically grant visa privileges. However, you can apply for the Thai Elite Visa program, which allows for long-term stays. This program provides a visa for 5-20 years for individuals who invest at least THB 10 million ($284,190) in the Thai economy.
Real estate can be considered an investment if its value meets or exceeds 10 million THB.
HOW TO BUY PROPERTY WITH A MORTGAGE?
Only residents can apply for a mortgage in Thailand. It is not possible to obtain a loan from a Thai bank with just a tourist visa.
Here are the conditions a foreign resident must meet to qualify for a mortgage from a Thai bank:
- Official employment in Thailand with a work permit for at least one year, and a monthly salary of no less than THB 80,000 ($2274);
- A valid residence permit;
- Marriage to a Thai citizen;
- The borrower must be under 60 years of age at the completion of payment.
Even if all of these conditions are met, the bank may still refuse to lend or request additional guarantees.
IS IT POSSIBLE TO PASS OWNERSHIP BY INHERITANCE?
Yes, the property owner can pass the property to their heir if the heir's name is on the title deed. If no name is listed, the inheritance follows this order: parents, spouse, children, and the eldest male relative.
CONCLUSION
To purchase an apartment in development projects in Thailand, leave a request on our website. Our specialists will respond to your inquiries, assist with the buying process, and help you select the best property according to your preferences and investment goals!