The Most Frequently Asked Questions Before Purchasing Property in Thailand
Content:
- Can a foreigner own property in Thailand?
- What taxes need to be paid when purchasing or leasing property?
- Can a foreigner legally lease out property?
- What are the responsibilities of a property management company?
- Does owning real estate provide any visa benefits?
- Can a foreigner get a mortgage loan in Thailand?
- Is it possible to purchase real estate in Thailand without being present?
- Does the owner need to register the property? Which organization handles this?
- Can property in Thailand be transferred by inheritance?
Can a Foreigner Own Property in Thailand?
Yes, foreigners can own real estate (houses or apartments) in Thailand, but they cannot own land. Land can be rented for up to 90 years through a long-term lease (leasehold), which is a common type of property ownership worldwide. Alternatively, a foreigner can register a company in Thailand and buy land in the company’s name, but 51% of the company must be owned by Thai citizens. If you're concerned about leasehold, experts at Thailand-Real.Estate can help you understand the process.
There’s also a limitation on buying apartments in high-rise buildings: foreigners can only own up to 49% of the units in any given building.
Foreigners are allowed to buy property in any region of Thailand without restrictions.
What Taxes Need to Be Paid When Purchasing or Leasing Property?
Property tax was introduced in Thailand in 2019, but collection was paused during the pandemic to ease financial burdens.
Tax rates are low, which is appealing to investors. Residential property tax ranges from 0.03% to 1%, depending on the property's appraised value.
When purchasing or selling property, both parties typically share and agree on the associated fees and taxes.
A 2% ownership transfer tax is applied based on the actual property cost. For long-term rentals, a rental registration tax of 1% is applied. Additionally, stamp duty (0.5% for freehold or 0.1% for leasehold) and income tax are also required.
Can a Foreigner Legally Lease Out Property?
Yes, foreigners can rent out their property in Thailand. Some banks allow foreigners to open accounts to collect rent. However, keep in mind that you must pay income tax on rental income. The tax is calculated on a progressive scale, and below are the current rates for 2022 (which will be updated in 2024):
| Income (BHT) | Tax Rate |
|---|---|
| 0 – 150,000 | No tax |
| 150,000 – 300,000 | 5% |
| 300,000 – 500,000 | 10% |
| 500,000 – 750,000 | 15% |
| 750,000 – 1,000,000 | 20% |
| 1,000,000 – 2,000,000 | 25% |
| 2,000,000 – 4,000,000 | 30% |
| Over 4,000,000 | 35% |
You can lease the property out yourself or hire an agency or management company to assist.
What Are the Responsibilities of a Property Management Company?
When you sign a property management agreement, the management company typically handles the following:
- Finding tenants to maximize profits
- Managing documentation, including tenant contracts, and, in some cases, issuing TM.30 forms for foreign tenants (a «Notice from the Landlord» for immigration purposes)
- Collecting rent and monitoring timely payments
- Paying utility and other bills
- Ensuring the property is well-maintained and cleaned before new tenants move in
- Resolving disputes with tenants
Does a Real Estate Owner Receive Any Visa Privileges?
Buying property in Thailand does not automatically grant visa privileges or a residence permit to foreigners. However, one of the most convenient options for long-term stays for investors is the Thai Elite Visa. This visa is available to foreigners who invest $300,000 (THB 10,000,000) into the Thai economy. The Thai Elite Visa allows individuals to reside in Thailand for 5 to 20 years. Real estate purchases are considered investments toward the country's economy, and you can either buy a single property worth THB 10,000,000 or multiple properties that collectively exceed this value.
Can a Foreigner Receive a Mortgage Loan in Thailand?
Only residents of Thailand can apply for loans from Thai banks. Foreigners cannot obtain mortgages or loans in Thailand with a tourist visa.
To be eligible for a mortgage, a foreigner must meet one of the following conditions:
- Hold a work permit for at least 1 year and earn a minimum monthly income of THB 80,000.
- Have a residence permit, which requires holding a long-term visa for over 3 consecutive years, proficiency in Thai, and paying taxes.
- Have a spouse with Thai citizenship.
- Be under 60 years old at the time of completing the mortgage payments.
Even if a foreigner meets these conditions, the bank may still refuse the loan or request additional guarantees. Thai banks typically do not provide loans exceeding 70% of the property's value, with a maximum term of 15 years. Interest rates for foreigners are higher, reaching up to 9% annually, depending on the bank's terms.
Another option for foreigners is to apply for a loan through MBK Guarantee, an organization that provides financial support to foreigners in Thailand. The interest rate here is higher, around 10%, and loans cover up to 50% of the property value for a term of up to 10 years. This option does not require a work permit, residence permit, or Thai guarantees and applies only to properties in Bangkok and major resort areas.
A more straightforward option for foreigners is to opt for an installment plan from the property developer. Installments are available for both completed and under-construction projects, with longer terms for properties still in development.
Is It Possible to Purchase Real Estate in Thailand Without Being Present?
Yes, real estate in Thailand can be purchased remotely. The ownership transfer must be registered with the Land Department, which can be done by a lawyer holding a power of attorney from the buyer.
Should the Owner Register the Property? With Which Organization?
When buying real estate in Thailand, one of the key documents you will receive is the property deed (Chanot), which includes details about the property and its layout. The reverse side of this document lists property owners and any transactions related to the property. The Land Department issues this document.
Another important document is the House Registration Book (Tabien Ban), which comes in two colors: blue for Thai citizens or residents, and yellow for foreigners. This book acts as proof of residence and is issued by the local municipal government.
Upon purchasing property, you'll also receive a copy of the sales contract and a document from the developer confirming company registration.
The property can be registered and documents obtained by the owner or a representative with power of attorney.
Is It Possible to Transfer Property in Thailand by Inheritance?
Yes, property can be transferred by inheritance. The heir's name must be registered on the property deed. If not, the inheritance follows this order: parents, spouse, children, and male adult relatives.