Did you know? Buying property in Thailand through a Thai spouse was once the preferred way for foreigners to buy landed leasehold properties; however, for this to be done legally, the funds have to come from the Thai spouse’s account.
Moreover, when contacted by the Land Department and other Thai government departments for verification, the spouse must be able to prove that she has the financial capacity to purchase such property without external help from a foreign spouse.
Thailand Aims To Attract Investors and Global Citizens With Attractive Incentives Including Thai Real Estate Purchase
Thailand attracts foreigners from around the world for fun, frolic, pleasure, business, and real estate gains, as Thailand has something in store for everyone. Also dubbed as the land of smiles, Thailand is known to be a place that welcomes businesses to invest in the Thai economy and development, with benefits from significant investments.
With the rollout of Elite visas and a vast range of attractive incentives, the Thai Government is hoping to reverse the damage done by the Pandemic to the economy of the country.
Myth – Thai Laws Prevent Foreigners From Buying Property in Thailand
Australians that have visited Thailand once, may wonder if they can make this country their second home by buying property under foreign ownership. The property market is booming in Thailand, yet there is a lot of misinformation about buying a house in Thailand as a foreigner.
You may have also heard that Thai laws prevent foreigners from owning a house here. However, not all of this is true and in reality, some types of real estate can be bought by Australians.
Let’s find out which types of real estate you can invest in before you start searching for your dream villa in Thailand.
Fact – Australians Can Buy These Two Types of Property In Thailand and
The fact is that foreigners buy property in Thailand all the time, and this is legally allowed, provided a few rules are kept in mind and followed. Australians can legally buy property in their name, specifically condominium units in residential developments and condotel units in commercial developments.
There are three prerequisites for buying residential condos in Thailand as a foreigner.
The first is, the property can be legally bought by a foreigner such as an Australian if the funds come from abroad and then are converted to Thai baht for the purchase.
The second is that the residential condo developer must sell a maximum of 49% of units to foreign buyers while meeting the bare minimum quota of 51% sales to Thai nationals.
The third is the Foreign Exchange Transfer form, also known as the FET form is an important document that the buyer must collect once he transfers funds into Thailand from a foreign account. The FET form as well as the Sale and Purchase agreement, along receipts have to be given to the Land Department at the local land office along with the government fees for processing the documentation. Without these forms, registering the title deed in the foreign property buyer’s name is not possible.
The Requirements for Buying Property in Thailand
To buy a condotel unit that is owned by a hotel conglomerate such as Four Seasons or Ritz Carlton, there are two important prerequisites.
The first is, the funds must come from a foreign account in foreign currency and then must be transferred to Thai Baht to complete the purchase.
The second is, the condotel unit can be used by the foreigner for a maximum of 7-10 days a year to stay, and the remaining days in the year the condotel unit must be rented back to the hotel conglomerate.
Condotel units are a pure investment that pays back the foreign buyer through the rental amount, and these units can eventually be sold back to the hotel as well, based on the market value.
Additionally, all the documents related to the transaction must be kept safe by the foreign buyer as these will be needed later on when selling the condotel unit back to the hotel conglomerate or another buyer.
Facts – Thai Property Laws Do Not Allow Australians To Own Land In Thailand
With the help of a long-term lease, Australians can lease a plot of land or a landed property, such as a townhouse, villa, or penthouse. The title deed of the property will determine the type of lease. Also, such properties can be leased on a long-term basis by Australians without the option to pass on the lease through will, heir, and succession.
The Australian leaseholder can choose a short-term lease of up to 30 years or choose to renew the lease a maximum of 3 times with each lease term of 30 years. The lease terms are not automatically renewed. The land owner may choose to deny the request to renew the lease after 30 years if the terms do not suit him. In such cases of conflict, the Thai land owner will have more rights as compared to the Australian leaseholder.
Through a Usurfruct lease option, Australians can lease a plot and construct it on top of the land. While they cannot legally own Thai land, they can own the building that has been built on top of the land. Such leases can be renewed thrice for a term of 30, 30, and 30 years.
The lease does not automatically renew and has to be renewed through a fresh agreement. At this point in time, the landowner might renegotiate the lease deal. As some landowners in Thailand may expect a significantly higher amount for each term renewal of 30 years, it is always best to discuss the entire deal before the first lease term starts.
Note – While another option that is chosen by many foreign buyers, you can achieve ownership of land through a Thai Limited Company. However, the company has to have a majority of Thai shareholders and the land will belong in the name of the company, not specifically to you. If you leave the company at any given point in time, or if the company is dissolved, melted, or not allowed to own and purchase land any longer, then you may find yourself in a difficult spot. For any property investment done through a Thai company, ensure to consult a legal aid or a legal advisor before you make the property purchase.
Real Estate In Thailand – Laws To Remember While Renting Out Property As A Freehold Condo Foreign Buyer
Buying a luxury condo in Thailand is the cleanest and simplest way for an Australian to buy property in Thailand. Condos from both established developers and upcoming luxury condo developers are easily available to foreign buyers.
The Thai Condominium Act allows foreigners to use condos for any purpose they want, under reasonable limits. These condos can be lived in by you and your family, they can be rented out in some situations, they can be kept locked, and they can also be resold at a later date.
However, if you plan to keep your condo locked up, or if you choose to rent out your condo, then it is always best to choose a Managed Property Services company that can maintain your condo and offer complete check-in to check-out services.
Reliable Managed Property Service providers ensure that your condo is well-maintained at all times. Silk Estate offers check-in, and check-out services as well as basic solutions with yearly repairs, periodical breakage replacements, daily and weekly cleaning choices, and an array of other must-have maintenance services.
If you are buying a condo for the purpose of investment, then keep in mind that condos in residential developments can be rented out on a monthly or yearly basis. Condos cannot be legally rented out as an AIRBNB, and the consequences of renting out your condo as a short-term stay have serious consequences of both fines and jail time.
Myths Busted About Buying A Property In Thailand Through Luxury Property Realtors
Myth #1 – All luxury property realtors offer the same solutions. While many property realtors may offer similar listings, the type of solutions they offer greatly differ. Not all realtors offer end-to-end solutions with unlisted property services. Silk Estate is a highly rated and reputable Thai realtor that has vast experience in assisting foreign buyers to get their dream property for residential and investment purposes.
Myth #2 – Realtors are not needed when buying property in Thailand – Realtors fill the great divide between condo developers and foreign buyers. They ensure that buyers get their dream condo in Bangkok, their perfect pool villa in Phuket, or their ideal eco-friendly beach penthouse in Koh Samui. Realtors also ensure that the language barrier isn’t a problem for buyers; they do the major work and offer a smooth and pleasant buying experience.
Myth #3 – Choosing a realtor is an easy task. While there are a dime a dozen realtors in Thailand, and choosing a realtor seems like an easy task, this decision shouldn’t be taken lightly. A good realtor will be a subject matter expert, a great realtor will have your best interests in mind, and a fantastic realtor will remove the stress from the transaction by giving you the options you need in a jiff.
