The most important things an expat should know before buying a house in Thailand

Several people from regions such as China, Singapore, Hong Kong, Japan, Europe, Canada, Australia and New Zealand have bought houses in Thailand during the last two decades. While a number of Chinese buyers are showing interest in the mid- and low-end sectors, demand in the high-end market is driven by residents of the other countries in question. Given the sizeable expat community in Thailand who own homes, how easy is it to buy property in this country?

Can an expat buy a house in Thailand?

If you are not a citizen of Thailand, you can legally purchase a condo or apartment unit. This restriction exists due to Thailand’s Condominium Act of 1979, under which a foreigner may not own more than 49% of the total unit space in a given condominium. The other 51% should be owned by Thai citizens.

Another option is to lease real estate for up to 30 years. Some developers even offer free extensions to these leases for an additional 30 years. However, the maximum lease period is limited to 30 years. If you plan to opt for foreign land title, expect to pay a premium when you buy a unit in a new condominium abroad.

Buy a land, a villa or a house

A common way for foreigners to purchase other types of property is to establish Thai companies. If you are planning to go this route, you may want to seek the services of suitable legal consulting firms. Alternatively, if you invest THB 40 million or more in a project approved by the Board of Investment, you can purchase up to 1,600 square meters of land. Some foreigners in the country have also purchased property by proxy, either through a Thai spouse or trusted associate.

Can expats get mortgage loans in Thailand?

Expats in Thailand began to gain access to mortgage loans provided by the country’s banks in the mid-2000s. While country of residence is not a criterion, you must meet strict eligibility requirements. Interest rates are typically higher compared to what you would pay in most Western countries. Depending on individual circumstances, one may qualify for a loan of 40% to 80% of the sale price of a property. Typical foreign loan terms extend up to 10 years.

Associated fees

Buying a house in Thailand entails different expenses, although most are borne by the sellers. As a buyer, you may be required to pay legal fees of THB20,000 to THB30,000, and this is subject to negotiation. Seller is responsible for paying real estate agent fees, stamp duty, specific business tax, registration fees, and withholding taxes.

researching the title

Be sure to do a thorough examination of the property title registered with the Department of Lands. Before entering into any type of legal agreement, determine if the seller is in possession of clear and legal title to the land. The title search also gives you information about any mortgages or liens related to the property.

make payments

If you want to pay the deposit or legal fees from your current country of residence, using the services of an overseas money transfer company might work better than going through a bank. This is because most banks tend to offer less than favorable exchange rates while charging hefty fees. These costs can make a noticeable difference, especially if you plan to transfer a large sum. Some of the top companies that allow you to send money to Thailand include OFX, TransferWise, WorldFirst, WorldRemit, and CurrencyFair.

conclusion

Buying a house in Thailand is not as complicated as one might imagine, although it does require some basic legwork. Whether you buy one through a developer, broker, international roadshow, or previous owner, take the time to thoroughly compare your options.

If you would like more information on Thailand’s property and title taxes, please see our Buyer’s Guide for further assistance.

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