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    Frequently Asked Questions Buying Selling property in Thailand

    Select one of the frequently asked questions below to learn more about buying, selling, and renting real estate. Also, begin to think about important things to consider when diving into your real estate search in Tropical Thailand

    How to Buy Property in Thailand

    Since you will be looking for property in a foreign country you need expert local assistance. The agent knows how to communicate in Thai and they’re familiar with the geographical area. The agent will save you valuable time in selecting and showing you the property in your price range that meets your needs.

    Purchasing directly from the developer isn’t going to save you money as compared to buying it from an agent. A quality property for sale in Thailand is generally offered at a fixed price by the Seller. The best benefit of using a property agent is that they will act as a liaison between you and the Seller. They will obtain a fair price for you and act on your behalf to represent your best interests throughout the entire process

    Since you will be looking for property in a foreign country you need expert local assistance. The agent knows how to communicate in Thai and they’re familiar with the geographical area. The agent will save you valuable time in selecting and showing you the property in your price range that meets your needs.

    Purchasing directly from the developer isn’t going to save you money as compared to buying it from an agent. A quality property for sale in Thailand is generally offered at a fixed price by the Seller. The best benefit of using a property agent is that they will act as a liaison between you and the Seller. They will obtain a fair price for you and act on your behalf to represent your best interests throughout the entire process.

    In Thailand, a foreigner may only own a condominium in his/her own name. If the foreigner wishes to acquire land and build a house, he/she should obtain a long term lease on the land (for a period not exceeding 30 years each term). Read more about “Leases in Thailand“.

    The foreigner should apply for the construction permit to build the house in their own name. This way the foreigner owns the house and has a secured long term lease on the land.

    The lease can be written with the option to reassign to another person (if you sell), ability to sublease and with a purchase option (should the law change in the future to allow freehold ownership by the foreigner). Therefore, a lease is the most common legal method for the foreigner to acquire property in Thailand

    A comprehensive examination of title deed recorded at the Land Department should be done. You need to verify that the Seller has clear and legal title of the land before you enter into a contractual agreement.

    The title search will trace the land to its first possession. It will reveal any registered interests on the land such as mortgage or liens. This investigation will also verify the right to access to your property; the residential zoning, environmental and planning codes applicable in the area It is a good idea to make sure that you can build a structure on the land.

    When you feel satisfied with the property, you will be asked to make a deposit to show your good faith to continue the process.

    In return, the Seller will reserve the property for you and start the process by drafting the contracts for purchase. Unless you write specifically a “get-out” clause in the deposit agreement, for example “subject to clear title” or “subject to agreement on the contract terms,” the money deposited is non-refundable.

    The Seller will have the contracts prepared for you. Since the Seller will write the contracts, it is highly recommended that you have a lawyer or solicitor review the terms and conditions. You will want protection for your interests should there be a delay in the property being built. A proper remedy should be stated in the contract.

    The contract will contain a clause for penalty if you are late with your payment. This should be fair and reasonable to both parties should the Seller default.

    Your payment schedule and its ration should be reasonable and practical. Normally, a first payment is 25 percent. Thereafter payments are made on a progressive basis: 25 percent when the roof is on, 25 percent when the door and windows are secure; and 25 percent when the fixtures and fittings are completed for instance.

    Process of Buying Condo /Land/House/Villa in Thailand

    STEP 1: Finding Real Estate in Thailand

    Real Estate in Thailand has taken off in the past decade with more foreigners’ wishing to retire in Thailand. You must consider the following:

    • Always make use of registered lawyers in Thailand
    • Always make use of reputable estate agents when taking advice on real estate in Thailand.
    • See the glossary of Real Estate Terms and the Real Estate FAQs when you start your search for Real Estate in Thailand,
    • Be it in Bangkok, Pattaya or Hua Hin. Be aware that many of the problems that do arise from the purchase of a condo in Thailand can be avoided early on in the property search.
    • Do they allow animals in the condo?
    • You may also want to read up on Real Estate pitfalls in Thailand when going out on your search.
    • Ask the right questions to avoid costly litigation.

    STEP 2: Consulting a Lawyer in Thailand

    Buying any Real Estate in Thailand be it a house or a condo requires the services of a reputable law firm. Once you have decided which real estate you are going to purchase, always consult a lawyer before signing any documents. The following would be checked amongst other property services:

    • A title search over the property
    • Note the type of Title Deeds in Thailand
    • Review the contracts before signing

    The considerations to bear in mind when you are buying a condo off plan:

    See the compressed version on buying real estate and the common property problems in Thailand.

    STEP 3: Mortgages in Thailand for Foreigners

    Each year many people come here to enjoy their holidays in the comfort of a second home or their most treasured property investment in Thailand.

    Obtaining a mortgage to finance your purchase of property in Thailand is possible.

    • There are currently two banking institutions which provide mortgage bonds to foreigners. They are Bangkok Bank and United Overseas Bank (UOB). These mortgage bonds are concluded ‘off-shore’ at their Singapore branch.
    • The home loans they provide to foreigners are based in foreign currencies. Your home loan/mortgage bond would be provided in either Japanese Yen, Euro or US Dollar. The interest rates also vary with each currency.

    Buying a house or a villa in Thailand always requires the use of a property lawyer who can guide you through the process. Property in Thailand is complex and for the better part unregulated.

    Buying A Villa Or House In Thailand – 3 Steps

    STEP 1: Finding a House in Thailand

    Real Estate in Thailand has taken off in the past decade or so with more foreigners’ wishing to live here or make this country their second home. While many wish to own a house in Thailand, it is important that you consider the following when purchasing a house:

    Be aware that many of the problems that do arise when buying a house in Thailand can be avoided early on in the property search.

     

    STEP 2: Setting up Your Thai Company

    Once you have decided which house you are going to purchase, always consult a lawyer before signing any documents. Foreigners may not own a house in their name; however their Thai registered company may own the house. There are different forms of business entities in Thailand. The most commonly used is a Thai Limited Company. There are certain business registration criteria for the limited company. The Thailand Amity Treaty is also still in existence for Americans and there are also tax considerations so check Corporate Tax in Thailand if you are going to do more than own a house or need a Thai Work Permit.

    STEP 3: Buying a House in Thailand

    Once we registered your Thai Limited Company we do the following amongst other property services so consult our property lawyer today. They would do a title search and check the contracts before signing. Also note the type of Title Deeds in Thailand. If you are buying a house off plan, you would need legal advice as to buying in pre-construction projects. There is also the cost of transfer for your condominium and Thailand property taxes. Use the property transfer calculator to check your fees payable. Always consult a reputable firm of attorneys before you embark on the process of buying a house in Thailand. If you are looking at finance and obtaining a mortgage bond in Thailand then call us for more details.

    f you are considering buying land in Thailand, consult us about the complex process of buying land in Thailand. Most expatriates place the land in the name of their Thai girlfriend or spouse without any legal protection in the event of a divorce or dispute happens.

    Always ensure that your rights are protected in Thailand and that you do not lose your investment.

    Buying Land In Thailand

    Thailand Real Estate has taken off in the past decade or so with more and more foreigners wishing to live in Thailand and making Thailand their second home. Many wish to own land here but before taking this step it is important to inquire or engage the services of registered lawyers in Thailand and, secondly, reputable estate agents when buying land.

    Preparations for Diligent Buyers

    • Be aware that many of the problems that do arise from buying land in Thailand can be avoided early on in the property search.
    • Thailand Real Estate Outlook – See the outlook for purchase and investment
    • Real Estate pitfalls – Top 10 Mistakes people make when buying property in Thailand
    • Glossary of Real Estate Terms and Real Estate FAQs – Familiarize yourself with terms and FAQs before diving into search for a specific property in Thailand be it a house, villa or condo in Bangkok, Pattaya, Phuket or Hua Hin.

    Thailand does not use Western measurements for land. Use our online calculator to Convert Rai and Convert Rai to Square Meters

    Option 1: Setting Up Your Thai Company

    Once you have decided which land you are going to purchase, always consult a lawyer before signing any documents.

    Foreigners may not own land in their name; however their Thai registered company may own the land. There are different forms of business entities in Thailand;

    There are also tax considerations so check the Corporate Tax in Thailand if you are going to do more than own a house or need a Thai Work Permit.

    Option 2: Leasehold Agreements

    Buying Thai real estate under a leasehold interest is a very popular and preferred way for foreigners to acquire property in Thailand.

    Why is it the favored alternative?

    • It is simple and straightforward.
    • Foreigners can obtain full interest on a lease in Thailand throughout the specified lease term.
    • This is preferred over purchasing through a limited company where you have several shareholders who may have interests that are different from yours.
    • You can transfer the leasehold interest or even sell it the same as you would for any other freehold title conveyance in Thailand.
    • The maximum lease term is 30 years.

    An option to renew will not be automatic and an additional 30 year periods will depend on careful drafting and discretion of the Registrar at the Land Office.

    Option 3: Marrying A Thai

    A foreigner can buy land in Thailand if he is married to a Thai however there are limitations as follows:

    • As the non-Thai spouse, you need to state that you have no rights over the land; effectively waiving your rights to claim the property.
    • The property, though purchased by you, cannot be in your name but will have to be in the Thai spouse.
    • The married couple may be asked to sign declarations at the Land Department stating that the funds used are the separate property of the Thai spouse.
    • Problems may still arise during a divorce case. Proving that the land is marital property will be difficult.

    There are basic guidelines that the law provides in the management of matrimonial assets and in this case, a skilfully drafted prenuptial agreement may help to minimize your risks as the non-Thai spouse.

    Do Property Services

    For purchasers, we would do a title search and review the contracts before you sign it. For sellers, we can draft your contract and negotiate with the purchaser.

     

    What Is Superficies?

    Superficies is “a right to build upon another’s land or in essence to register a house separate from the relevant land therefore permitting the building of a structure or a plantation”.

    Similar to a Usufruct, if a right of superficies is intended, it must be noted that once granted, the “superficiary”, or the one who benefits from the right of superficies, must keep the land intact and remain in good condition.

    Once the right of superficies has expired, the land must be returned in the same condition as it was before the right was granted.

    Upon expiration of the Superficies, if the the owner of the land wishes to buy the building at a market price the superficiary has to sell it.

    The right of superficies may be granted for the lifetime of either party or for a period of up to 30 years and during that period any taxes on the land must be paid by the superficiary. The right does not extinguish even if there is complete destruction of the building or structure.

    Use Of Superficies To Foreigners

    • Section 1410 of the Civil and Commercial code allows foreigners a right to register a right of superficies under if granted pursuant to an agreement between the parties.
    • Generally, there is no fee for registration at the Land Department; however, there needs to be a mere consideration that has a monetary value of not more than 1,000 baht. However, this may vary between parties as well as Land Departments.
    • The right of superficies can be terminated at any time so long as there is no particular fixed registration period upon reasonable notice by either party. However, if rent is to be paid for the superficies, at least one year notice must be given by either party to terminate or one year rent is to be paid.

    The Transfer Of Superficies

    Superficies may be transferred to a third party as well as through inheritance. However, it must be noted that any destruction or damage to the land will become the responsibility of the third party. In that case, they and can directly sue the initial superficiary for the damage of the property.

    If the superficies is inherited, the same conditions shall apply to the heir of superficies.

    Superficies In Thailand Now

    Superficies in Thailand are not as commonly used as much if compared to leases. Although the registrations of superficies in Thailand are not against the law, the land department will view the circumstances and it is upon their discretion whether the right of a superficies is granted or not.

    What Is Usufructs?

    A usufruct, in Thai language, called “Sidhi-kep-kin”, provides temporary ownership rights for use and enjoyment of the property along with an advantage of being able to reap the profits from property belonging to another as long as the property is not damaged or altered in any way.

    Use Of Usufructs

    Although the law does not prevent Foreigners from being able to apply to register a usufruct on a land, however, this is still subject to the discretion of the Land Officer.

    The person who enters into a contractual agreement with the owner for this right is called the “usufructuary”. A usufruct will be registered in a similar manner to a lease of up to 30 years or for the life of the usufructuary.

    Once registered, it will have effects as a servitude on the title. The owner of the land cannot sell or transfer the land until the servitude has been terminated.

    The usufructuary must also keep the property intact and returned in the same position that it was when the usufruct was granted.

    The usufructuary is responsible for the expenses for the management of the property, paying taxes and duties, and being responsible for interests payable on debts charged to it.

    If required by the owner, the usufructuary is bound to insure the property against loss for the benefit of the owner. They must pay the insurance premiums for the duration of their usufruct and your right is also registered on the title deed.

    A usufruct interest expires upon the death of the holder of the usufruct and therefore cannot be inherited.

    The Transfer Of Usufructs

    Transfer to a Third Party

    The beneficiary in a usufruct scenario may also transfer his rights to the usufruct to a third party according to the Civil and Commercial Code of section 1422.

    The grantor of the usufruct however will still claim for damages caused by the third party directly against the usufructuary.

    An interesting feature of usufruct is that the usufructuary can enter into a 30-year lease with a third party. So if the usufructuary signed a 30-year lease contract before his death, the lessee (tenant) will maintain the rights of the lease until its expiration.

    Case Study: The Supreme Court ruling 2297/1998 states that the lessor (landlord) does not have to be the owner of the property. Therefore the usufructuary can rent out the land. Although in the event of death of the usufructuary within the lease term, only the usufruct will be terminated but not the lease.

    Transfer Through Inheritance

    The usufructuary could transfer the right of using the land through inheritance.

    However, it remains to be seen if the Land Department officials would allow a transfer of the rights to the land. There is no annual tax levied on the property compared with the 12.5 percent of the assessed or market rate rental value in the case of a registered lease.

    Registering A Usufruct

    There is nothing there is stated that restricts the grants of such usufructs. However, like all other rights in relation to property, it must be noted once again that the registration of such a right is upon the discretion of the Land Officer at the Land Department and may vary between locations. It is advisable that you contact a Lawyer or Solicitor to discuss your options in regards to you specific circumstances.

    What Is Servitudes?

    Servitude is practically a registered “right of way” that is given to a dominant property that benefit from the servient property, who is burdened by this right of way.

    In common law terms servitude is usually described as an “easement”. For example, if property A has a house located adjacent to property B, however, in order to get or property B, the property B tenants has to pass through property A’s walkway, a servitude will be needed to grant the right of way.

    The right of servitude basically secures access to the public road.

    Servitudes In Thailand Law

    Servitudes in Thailand are governed by the Thai Civil Law and Commercial Code sections 1387 to 1401. Section 1387 of the Thai Civil and Commercial Code states that “An immovable property may be subjected to a servitude by virtue of which the owner of such property is bound, for the benefit of another, to suffer certain acts affecting his property or to refrain from exercising certain rights inherent in his ownership”.

    Servitudes are generally not difficult to register but are not a common occurrence.

    Servitudes can put several kinds of burdens or restrictions on a neighboring property, such as usage of a neighboring water well, or defining restrictions on private structures.

    If there is refusal to register such by the Registrar at the Land title office, it may be necessary to make an application in court. Be sure to contact a lawyer or solicitor if a situation as such arises so as to be aware of what options you have available to you.

    As foreigners cannot claim ownership over land as freehold, the preferred method of acquiring land is through leasehold.

    A foreigner can safely acquire the right to use the land and register the right for a maximum lease term of 30-year lease at the Land Department.

    Lease term – A lease agreement will usually guarantee the initial 30-year lease term.

    Renewal Of Lease

    Renewal of lease in Thailand is not in Perpetuity. There is no automatic right to renewal and parties must take an active step to renew the lease towards the end of the initial term.

    It is difficult but possible and success will depend upon careful drafting of the clause regarding the intention to renew and there it will still subject to the Registrar’s discretion.

    Renewal periods thereafter the initial period must not exceed 30 years.

    Have your lawyer advise you on renewal clauses.

    Lease Agreements And Registration

    Drafting of the Lease

    The lease contract is usually drafted in the Thai language, however we do provide English versions if needed.

    It is recommended to include family members such as young adults as co-lessees in the contract. In the uneventful demise of the parents, the children can carry on the full term of the lease period.

    Registration

    Leases for more than 3 years are able to be registered at the Land Office, which will then further protect your interest in the house, as it becomes an encumbrance.

    Upon registration, the title deed will then contain your name and particulars as to the lease. The lease contract is then attached to the title deed and maintained at the Land Department.

    The foreigner can construct a house on the land if the lease agreement permits. The construction permit must be applied for in the name of the foreigner and subsequently the foreigner will own the structure in his/her own name.

    Most importantly, leases are valid even upon the demise of the lessor, or in the event that the land is sold. However, leases are only transferable to third parties in the event that the guarantor of the lease permits it.

    The advantage of leasehold is a lower registration fee. The registration fee for registering such a lease is 1.1% of the rental value.

    The law of Thailand provides for mortgage contracts under Book 3, Title 12 of the Civil and Commercial Code. The nature of the mortgage contract is that it is one in which a debtor assigns property to a creditor in order to secure repayment of a debt.

    Below are the following points you might need to know about property mortgages in Thailand:

    • Foreigners must consult with a lawyer before taking out a mortgage in order to purchase any type of real estate in Thailand. This is particularly true in the case of both condominium units or houses.
    • In regards to condominium units, the Condominium Act of 1979 and a Land Department regulation issued in 2004 require that non-resident foreigners (i.e. any foreigners without permanent resident status) must transfer foreign currency into Thailand and convert it into Thai baht in an amount no less than the purchase price of the condominium unit.
    • The preceding rule (Condominium Act of 1979 and a Land Department regulation) presents difficulties for foreigners who wish to apply for a mortgage in order to finance their purchase of a condominium. Any foreign nationals interested in obtaining financing may have to contact a local Thai bank who is able to assist in providing a loan issued in foreign currency which is transferred from overseas.
    • As for financing such properties as houses or villas, an important legal issue is presented due to the fact that the foreigner may not actually own the land underneath the structure and therefore cannot offer such land as collateral for the mortgage.

    Furthermore, foreigners may face difficulty in obtaining approval for a mortgage from a Thai bank since they are not resident in Thailand and do not have a permanent domicile here.

    Those who are interested in obtaining a mortgage in order to finance the construction of a house or villa on leased property should seek proper legal consultation before proceeding.