However, there is also a healthy supply of resale property. Buying a property either already built or lived in allows a purchaser to visit a physical property rather than inspecting just a show unit for an off-plan purchase.

In Europe and America, resale purchases are more common meaning that foreign investors are accustomed to this type of property purchase and like the reassurance of visiting a physical building to gauge its success.

Buying a resale property follows a similar process to buying off-plan. Once both parties have agreed on a sales price either directly or through a property agent, the next step is to complete the paperwork.

Firstly, a title search is performed to confirm current property ownership. This will also verify the property's location and vital information like its size, which is important as this determines the property value. The search also ascertains whether there is a home loan on the property confirming how the sale funds will be allocated.

Next, the terms of the sale agreement need to be agreed. This legal document identifies the buyer and seller by detailing their passport or national ID card numbers and identifies the unit through the title deed, house registration, until number and size. Also included are the sale terms: price, relevant taxes due and transfer fee.

Visa Memberships for Long Stays in the Kingdom

Typically a deposit is paid to secure the property while the paperwork is processed. This amount will be listed in the sales and purchase order and will avoid confusion when the remaining payment is due upon ownership transfer at the Land Department.  

The norm is that a buyer pays the full price to a seller when the new owner is registered - the last stage of the property transaction. At this time fees are due including the registration fee, withholding tax, stamp duty for properties owned for over five years or the special business tax for those less than five years.

Stay abreast of the industry’s news and updates sending directly to your inbox, sign up here.

This act replaced the archaic House and Land Tax B.E. 2475 dated 1932 and was implemented to improve and encourage land use, enable more efficient tax collection, increase public revenue and reduce income disparity.

Guide

Understanding Thai Land Title Deeds

Additionally, the new act replaces other legislation effectively consolidating the previous tax system. These include the Land Development Tax B.E. 2508 (1965), the Notification of the National Executive Council No. 156 BE 2515 (1972) and the Royal Decree Designating the Medium Price of Land for Land Development Tax Assessment B.E. 2529 (1986).

Guide

Thai Property Purchase Terminology

The tax applies to any individual or company that has ownership or rights over land or buildings that includes condominium units. These three property types are defined as land including hills and waterways, buildings such as houses, boathouses or other structures that are habitable, and industrial and commercial storage units. Condominium units are those where the title is assigned under the condominium act.

Guide

Requirements For Foreigner Property Ownership

This mandatory tax is due at the local district office by April of each year and is calculated by the official assessed price. This figure is set out by the government.

The notable change to this new tax is that it is a progressive rate calculated on property usage replacing the previous flat rate of 12.5 percent.

It also applies to residential properties that were once exempt. However, exemptions from the Thailand Land and Building Tax include first time buyers of homes and land where the value is less than THB 50 million and the owner is listed on the house registration book, and owners of homes valued less than THB 10 million who are listed on the house registration book.

Stay abreast of the industry’s news and updates sending directly to your inbox, sign up here. 

For example, condominiums that are not yet built are often referred to as a project where units are sold off-plan, meaning that they are not built yet as opposed to a ready to move in the project where the units are already finished.

Guide

Tricks Of Off-Plan Property Purchasing

Even before you have secured a property, your agent will need to check that the building you wish to buy in has sufficient foreign quota since only 49 percent of a building can be owned by foreigners according to the Thai Condominium Act 1991. The foreign quota is calculated on the overall saleable area of the condominium rather than on the number of units.

Once a unit has been found and the offer has been agreed, to secure the unit a booking fee is required. This amount will depend on the property but only once it has been received will the sales and purchase order be drafted which is the contract used to transfer the ownership.

This document outlines the terms of the sale detailing relevant information such as sales price, unit details including its number and size, the common area fee which is used to pay for the management of the building and the sinking fund which is a one-off lump sum held in reserve in the case of major building works.

Guide

Ten Top Tips For Buying In Thailand

Once the buyer and seller are happy with the sales and purchase order the next step is to complete the sale. This is when the buyer legally owns the property and the seller has received the funds for its payment.

The transfer of ownership occurs at the property’s local land department and this is the final stage of the process when the transfer fee is also paid. The transfer fee is two percent of the agreed sales price and the cost is usually shared between the buyer and seller however this forms part of the purchase negotiation.

Stay abreast of the industry’s news and updates sending directly to your inbox, sign up here.

Foreigners can either lease the land or buy it through the means of a company allowing them to buy a single house, a villa or even build their own home on a plot of land. A local solicitor can advise on the best route for this type of ownership, however, buyers should be aware that Thailand has six different land titles to define ownership with only three really being relevant to foreigners.

Guide

How To Buy A Home In Thailand

Chanote Land Title (Nor Sor Gor 4 Jor).

This is probably the most popular land title for foreigners since it is the most secure, plus it acts as a document detailing the land’s legal leasing. Clearly defined within Chanote Land Title is the lessee’s legal right of occupation plus to provide clarity and assurance: the land boundaries.

Additionally, this type of land title can also be used to incorporate nine separate plots (subject to the Land Allotment Law, Section 286).

Nor Sor 3.

The next land title to be aware of is Nor Sor 3 which differs from Chanote Land Title since it is not a title of possession but rather a legal document. This land title legally allows for a property to be constructed on the land but can only be issued to plots that do not adjoin other plots meaning that problems can arise when trying to define the plot in question raising questions over the use of this land title.

Nor Sor 3 Gor.

Not to be confused with Nor Sor 3, Nor Sor 3 Gor has similar qualities but it is for a plot of land that is clearly measured out with posts to define its boundaries making this a more attractive option. Under this land title, it is also possible to divvy up the entire plot into smaller ones suiting investors who are looking to develop on the land.

Stay abreast of the industry’s news and updates sending directly to your inbox, sign up here.

It is important to get your head around these taxes since it will dictate its profitability. The Kingdom is open to foreigners owning their own slice of Thailand, however, restrictions in place mean that overseas investors can only own condominiums rather than landed homes unless they operate a business in the country.

How To Buy A Home In Thailand

Article • May 2018

Any person owning property in Thailand must declare their taxes and whilst it is their responsibility to do so, note that the local government can perform checks to ensure that the necessary payments have been paid. As well as collecting arrears, a fine might be enforced too.

The Condo Apartments and Buildings and Land Tax relate to any income generated from a condominium unit or a leasehold apartment, just like any tax that is levied on a profit of any business transaction.

The amount of this tax will depend on the owner’s personal situation as it will be influenced by any other income that they might receive. Any person buying a property in Thailand that already has a tenant in situ, then as soon as the ownership of transfer has been completed, the new owner will be liable for this tax.

Another tax to be aware of is the Building or Housing and Lax Tax which only applies to landed homes and therefore not condominiums. Paid yearly at the end of February, this tax is either 12.5% or the annual rent or of its assessed value. The figure of the latter is declared by the local government and the tax collected will be the higher of the two amounts.

The last tax to take heed of is the Thai Companies and Building and Land Tax. This law was established to close the loophole of foreigners owning land in Thailand through the means of a Thai company who then either rented this property out or let a company director use it as their home.

Requirements For Foreigner Property Ownership

Article • July 2019

Due to the nature of this tax, even if the property is left empty the Thai Companies and Buildings and Land Tax still applies to ensure that those companies that were set up purely for the purpose of land ownership still need to pay.

Read more insights about Bangkok property market and home tips, check out DDproperty Property Index Report, DDproperty Property Market Outlook Report and Property guides

Under the Condominium Act, a foreigner can wholly own a unit and on a freehold basis. This has helped to cement Thailand as an investment haven for overseas investors, especially those who spend time in the country for business or leisure reasons.

How To Buy A Home In Thailand

Article • May 2018

There are two requirements all foreigners must abide by when investing in Thai property.

Firstly, there must be sufficient foreign quota in the building. The foreign quota is defined under the Condominium Act that states up to 49 percent of a condominium area can be foreign-owned.

This figure applies only to the combined saleable unit area and therefore does not include the communal space such as a lobby, swimming pool or any other facilities. The remaining 51 percent of the same area, therefore, must be Thai owned. If a foreigner is buying a resale condominium unit from another foreign, then this will keep the foreign quota the same.

However, should a foreigner be buying from a local then a check if there is sufficient foreign quota to complete the transaction is required at the building’s juristic office who keep tabs on this figure? For off-plan purchases, the developer will keep a record of the foreign quota.

The second requirement relates to the funds used to purchase the unit. Any foreigner investing in a property in Thailand must bring their funds into the country as foreign currency which is then exchanged into Thai baht in Thailand to be transferred to the developer or to the existing owner.

All purchases must be supported with a foreign exchange transfer form to confirm this which is issued by the bank, and the amount brought into the country must be equal or more than the agreed sales price.

Buying Paperwork

Article • January 2018

If in doubt, please refer to the Thai Condominium Act 1979, as amended in 2008, which clearly defines these requirements as well as all other ownership rights in relation to owning a condominium in Thailand.

Read more insights about Bangkok property market and home tips, check out DDproperty Property Index Report, DDproperty Property Market Outlook Report and Property guides

Death is the subject that most people wish to avoid talking about but planning ahead with making it easier for the person due to inherit the property at an already difficult time. As with any legal issue, it is always advisable to speak with a local legal expert to understand what the best course of action is in a bid to safeguard your asset.

In a nutshell, Thailand’s Condominium Act details inheritance. A law which was introduced to cater to the growing numbers of non-residents wanting to own property in the Kingdom. To aid in inheritance, overseas owners are urged to plan by drawing up a will or intestate succession that clearly states what will happen to the property upon death. Any local law firm will be able to assist with producing these and it will also save any hiccups later down the line.

For a property to be successfully inherited the local Land Office will require several documents including the deceased’s death certificate, the will or intestate succession, plus a court order confirming the inheritance. Thai law states that an heir can inherit the deceased’s estates and in doing so they also inherit the responsibilities that it comes with this new ownership. Since this is deemed as a property transaction, the person inheriting the real estate will be subject to pay the property transfer fee and business tax to the Land Department upon transfer of ownership.

Finally, as foreign purchasers are required to pay for their property with money that has come from overseas, it is vital that the deceased has met the correct criteria when purchasing the property.

• How To Make Money From Buying And Selling Property
• 5 Ways To Pick The Best Time To Sell Your Property
• What Types Of Tenants Are There?

Read more insights about Bangkok property market and home tips, check out DDproperty Property Index Report, DDproperty Property Market Outlook Report and Property guides

In the capital city, most condominiums that you see are licensed, while unlicensed residences could be found mostly in tourist resort areas such as Pattaya, Phuket, Hua Hin or Koh Samui. On the outside, the two types might look identical, but in terms of legal, there are significant differences that you need to comprehend before making a purchase decision.

Licensed Condos

• Conformed to the law under Thailand Condominium Act.
• Freehold owners are free to encumber, sell, or dispose of the unit
• Co-ownership of the common areas and land that the condominium sits on
• Democratic voting right system for condo's management
• Must offer minimum consumer protection
• Owners are not subject to housing and land tax
• Freehold condos offer Indefinite ownership period and transferable by succession

Unlicensed Residential Buildings

• Not conformed to the law under Thailand Condominium Act.
• Unit's possession is under a lease contract
• Selling is complied to the lease contrace and requires consent from the building's owner
• No ownership in the common areas
• Residents are complied with rules set by the building's owner
• Leased properties are subject to housing and land tax
• Leasehold residential buildings offer only fixed-period stay (maximum 30 years)

The intriguing question is how to identify whether the condominium is licensed or not. One easy way is to look at the sale agreement where it will state that the project is abided under the Condominium Act. Second, most unlicensed residences come in the form of leasehold, whereas licensed condos can be either leasehold or freehold. Finally, a licensed condo would give you an ownership title deed, while unlicensed residences could provide only a lease contract.

Though an unlicensed residence would offer a more attractive price, the property bears a much higher risk compared to licensed condominiums. Taking this information into account could help your buying decisions become more precise, or you could read DDproperty's project reviews to gain sophisticated data about each project for deeper understanding.

Source: www.samuiforsale.com

Check out these related articles Ten factors consumers consider when buying property in Bangkok, Where is the best unit’s location in a new condominium project?

Receive free latest property news on email from Thailand's No.1 property website here, or read more project reviews

Additionally, part of the transaction will be done at the Land Office and some of the agreements will be in Thai so having a lawyer well versed in English will help you through the process.
Once the property is located, ensure that a complete title search and land survey is carried out by the law firm. As a foreigner can own property in Thailand but not land, it is very important for a land survey to be done.

If you are a foreigner and are buying property on your own or with a Thai national, the documents you will need are your passport and the Exchange Control form.
The seller will prepare the other documents such as the purchasing contract.

However, if you are buying property through a company, then you will need the following documents;

• Certified copy of the certificate of incorporation

• Certified copy of the memorandum of association

• Notaries certificate

• List of shareholders in English and Thai

• Minutes of directors’ meetings with permission granted toward purchasing the property

• Letter of advice

• Power of attorney if you will not be present at the transactions

• Letter indicating you are free of debt

• Foreign co-owner letter

• Certified copy of identifications of authorized director(s)

• Certified copy of the house registration of the authorized director(s)

• Title deed of the condominium unit

Ensure that the lawyer does a thorough check on the property such as its title deed and condition before proceeding with the transaction.
A 10% deposit is expected at the point of sale and is non-refundable unless the seller backs out of the deal.

30 to 60 days is the usually amount of time it takes for the closing process to conclude. After this is done, the title deeds will be submitted to the Land Department for registration. Payment of government duties will also be made at this point before you can officially take ownership of the property.

Receive the latest guides on email from Thailand’s No.1 property website here, or read more project reviews