Procedures for Buying Property in Thailand
Buying property in Thailand is fortunately relatively standard, but the potential buyer must realize that obstacles can arise that hamper the smooth process:-
- Thai law allows the freehold ownership of a condominium by a foreign buyer provided that majority ownership (51%) of the condominium block is by Thai nationals or in the name of a Thai company.
- Foreign buyers can own property in Thailand as either leasehold or freehold, but the freehold choice is only available if the condominium is within the 49% quota. The collective ownership of the condominium block and the land on which it stands must consist of a majority of Thai shareholders, who then set up a corporate body to govern the property.
- Foreign buyers transfer their foreign currency funds from their overseas bank (outside Thailand) to the developers or owners Thai bank account. On receipt of these funds a Foreign Exchange Certificate (Thor Tor 3) is issued by one of the major banks as evidence that the buyer has deposited the foreign currency sum with an accredited local bank.
- Once a foreign buyer has obtained a residence permit in Thailand under the Investment Promotion Act (IPA) issued by the Board of Investment of Thailand, he may only then buy a freehold to a condominium. As proof of his entitlement to purchase a freehold, the foreign buyer must present his or her passport with the certificate from the Board of Investment of Thailand.
- When the foreign ownership quota of the condominium is fully subscribed, the only option available is through Thai company ownership. For your information, your agent can provide full details of buying in company name.
In Thailand, all property-buying transactions attract the following standard taxes and duties, and we advise any potential buyer to become fully aware of them and their consequences:
- A Structures Usage Tax is levied on properties used solely for commercial purposes, and is collected by the municipal or district office.
The buying or selling of any property attracts a TStamp Duty of 0.5%.
If a property has been owned for less than five years when it is sold, an SBT will be imposed at 3.3% of either the property’s selling or assessed price (whichever is higher).
A Transfer Fee of 2% is due on the registered value of the property.
Income Tax is imposed on the property and is usually calculated between 1% and 3%.
Since 2010, Capital Gains Tax is no longer levied on property transactions.