FAQ

According to Thai law, a foreigner can purchase a building (for example, a house, townhouse, villa) or part of it (for example, an apartment) for full ownership.

Land ownership is only allowed for Thai citizens or Thai companies. It follows that foreigners have two options for acquiring land rights.

Long-term lease (Leasehold) - conclusion of a long-term lease agreement;
Full ownership (Freehold) - registration of ownership rights through the creation of a Thai company.

Leasehold is the process of renting a land plot, including the building to be built, for a long term with the possibility of extension, the total duration of which is 90 years. Initially, the lease term is 30 years, after which it can be extended twice more for the same period. After this period, the land plot must be transferred to another person.

This registration process is carried out by the Phuket Island Land Committee. Fees are calculated from the total amount of rent for the entire period and include:

• 6% - taxes;
• 1% - registration fee;
• 0.1% is a duty.

To make such a transaction only a certified copy of the passport needed.

The remaining legal documents will be prepared by lawyers.

Freehold is the process of acquiring ownership of a land plot, including the building to be built, through a Thai company. A foreign investor may have a stake in such a company of no more than 49%, but these restrictions are circumvented as follows:

• The buyer is appointed director of the Thai company, and the nominee partner renounces his shares in favor of the buyer.
• The share of Thai shares is diluted between several nominal Thais so that the buyer has the main share of the shares.
• Thus, a foreign citizen actually acquires full control over the company and the land.

Costs:

• 60-80 thousand baht for registration of a legal entity;
• Registration fees and taxes - up to 6% of the estimated value of the land. They are paid once;
• Maintaining the company's tax and accounting records (regardless of whether the company operates) - about $1,000 per year.

The Phuket Land Committee handles the execution of transactions. The required documents are a certified copy of the passport. The rest of the procedures are handled by lawyers.

The purchase of real estate from the developer includes the following steps:

1.Making a deposit. The deposit amount is set by the developer and usually ranges from 100 to 200 thousand baht. The deposit confirms the seriousness of the buyer's intentions and protects the developer from losses in case the buyer refuses the transaction.

2.The drafting and signing of the purchase and sale agreement begins after the deposit is credited to the developer's account. The duration of this stage depends on the time required by the parties to agree on the terms of the contract.

3.Registration of ownership rights to real estate in the land and architectural committees. This procedure is performed by the developer and takes from 10 days to 1.5 months, depending on the developer's internal procedures.

4.Payment of the remaining amount. After completing the documents confirming your ownership of the property, the developer issues an invoice to pay the remaining part of the cost. After payment, you will receive the documents for the property and become the owner of a new house in Thailand.

The costs of the real estate registration transaction in Thailand include:

• Withholding tax – 1% of the cost or contract price, whichever is greater.
• Registration fee – 2% of the property value;
• Stamp duty – 0.5% of the cost or contract price, whichever is greater;

When registering a property for long-term lease:

• Registration fee – 1% of the cost of the object;
• Stamp duty – 0.1% of the cost or contract price, whichever is higher.

The main activities and objectives of land acquisition:

1) An acquisition with the prospect of further sale. Given the steady growth in real estate prices in Thailand, the yield can reach up to 30% annually. Both deals can be completed within a year.

2) Rental. The rental yield can be 40% per annum. To do this, it is necessary that the land plot be connected to infrastructure such as electricity, water supply, roads, Internet and television. If there is no infrastructure, you will have to create it yourself, which can reach up to 15% of the cost of the site.

3) Building for your own business. Foreigners have a wide range of activities that can be carried out on their land, including shops, offices, salons, warehouses, restaurants or farms.

4) Building for rent or subsequent sale can become a source of stable income on a long-term basis. During the construction of a condominium and the subsequent sale of apartments, the profitability can reach 50-100%, and with proper marketing and management, even 300-400%. At the same time, the payback period will be 5-8 years. During the construction of the villa and self-management of the process, you can save up to 50% and get a yield of 10 to 15% per annum when renting out.

A condominium is a residential unit in an apartment building or complex. Its area ranges from small studios to spacious penthouses, which provides a variety of choices for different needs and budgets.

Important aspects of condominium ownership:

• When you buy an apartment in a condominium in Thailand, you become its rightful owner.
• Condominium ownership includes access to common areas such as swimming pools, gyms, gardens and other amenities that enhance the quality of life and value of the property.
• Condominium buildings are managed by a legal entity or a management committee that provides security and maintenance.
• Condominium owners can rent them out, which makes them an attractive option for investors.

Advantages of owning a condominium in Thailand:

• Condominiums represent one of the most affordable ways of owning real estate for foreigners.
• Many condominium complexes offer luxurious amenities that create a resort atmosphere.
• Most condominiums provide round-the-clock security.
• Management companies provide regular maintenance of buildings.
• Condominiums are often located in attractive areas near beaches, shops and entertainment centers.

You can!

Purchasing housing directly from a developer is the most convenient way to purchase real estate, as it does not require personal presence.

For more information, contact our specialist and we will answer all your questions about the process of remote purchase of real estate in Thailand.

The purchase of real estate does not provide an advantage in obtaining a visa, but simplifies the process of obtaining any type of visa for permanent residence.

Yes, you can!

The process of obtaining a loan is as follows:

• The Bank will analyze the activities of the developer and examine the contract;
• The bank's experts will determine the market value of the facility;
• If the decision is positive, the bank issues a loan.
• To do this, you will only need a passport.

Lending is carried out with the following conditions:

• The maximum loan amount is 50% of the value of the real estate object;
• The interest rate is determined individually, on average it is 6-8%;
• The maximum loan term is 10 years;
• Real estate is a pledge in the bank.

The process of transferring ownership of real estate takes place in the Architectural and Land Committees. The time spent on this procedure depends on the type of object and the seller's internal rules and averages:

• from 10 days to 1.5 months for a new apartment from the developer;
• up to 3 months for a villa, house or townhouse.

The acquisition of real estate is one of the main methods of preserving and increasing capital. However, it is important to be aware of the risks and features that you may encounter when buying a property in Thailand.

For the right choice of an investment strategy to maximize profits, it is recommended to seek professional advice.

Phuket Invest Realty is your reliable partner in the Phuket real estate market.