Navigating the process of buying property in Thailand can be a bit perplexing, especially for foreigners. Many online sources provide conflicting information, making it difficult to find straightforward answers. The reality is that purchasing property in Thailand is more nuanced than a simple “yes” or “no.” However, with the right guidance and patience, you can successfully navigate the process. This guide will cover everything you need to know about buying property in Pattaya.
It is possible for a foreigner to live permanently in Thailand. The official way would be to obtain permanent residency, but that’s not without its difficulties as there are certain conditions which must be met. We covered some of the changes which made the process for retirees harder here and generally you may want to liaise with one of the top visa companies in Pattaya to make sure you approach the task appropriately. You can also explore retirement visas, or simply working with a non-immigrant visa and permit. There are certainly a number of ways of remaining in Thailand permanently, but prior planning and arranging documentation are needed.
The safety of purchasing property in Thailand largely depends on your intentions. Thai laws regulate property ownership, and while they are generally stable, it’s crucial to follow the correct procedures. If you’re buying a home for personal use, especially if you have family ties in Thailand, it can be a safe investment. However, if your goal is to rent or flip the property for profit, be aware of the inherent risks in any real estate investment. Consulting with a local expert can help you navigate these waters effectively.
There is such a thing as an investment visa, however, this isn’t a long-term solution to your residency needs. You may still need to explore other options if you’d like to remain permanently.
Whilst on the subject of buying property and moving money about Thailand, here is what you’ll need when opening a bank in Thailand—you’ll be pleased to learn that the process is not much more complicated than what you’d expect in your home country:
Basic Thai Ownership Law dictates that land can only be owned by a Thai citizen or permanent residents (with an exception for BOI companies). As a consequence, 51% of all sellable units in a condominium are for Thai Nationals (Thai Quota) and 49% are for foreigners (Foreign Quota).
When you purchase a condo, sold as part of the Foreign Quota, you are entering into a long-term freehold agreement, with full ownership in your name.
Unfortunately, foreigners are unable to own land in Thailand (unless of course, you have managed to achieve your permanent resident status). As such the purchase of a plot of land, would need to be 51% registered with a Thai National or be purchased through a Thai company where a minimum of 51% of the shares should be held by Thai shareholders.
However, this doesn’t mean that you’re unable to buy a house and live comfortably on said land. There are other ways around it, which we will get to in a moment, but first let’s look at how land is measured in Thailand:
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Thai Land Measurements
In Thailand, the size of land is expressed in Rai, Ngan and Square Wah (or Talang Wah).
One Wah = 2 metres, and thus one Square Wah (2X2 metres) = 4 square metres.
One Rai, the biggest unit, is 4 Ngan, 400 SQW, or 1600 sqm
My Child is of Thai Nationality, Can They Own Land?
The answer is yes! There are no restrictions on age limit for Thai nationals owning land or property. However, whether or not the land departments accept is down to their discretion, so you should not think of having the land and property in your child’s name as a guaranteed fix. It is, however, something worth exploring.
Ownership Through Thai Company Is it Legal?
If you are interested in investing in land in Thailand, you will have to invest in a majority Thai company (51% of shareholders of Thai Nationality). However, using a majority Thai company merely to get past Thai law restricting foreign land ownership is illegal.
If you are a minority shareholder in a legitimate Thai company, then you may own real property in Thailand through that company. If you are the director of said company and have amicable relations with the Thai shareholders, then you essentially own the property through the control of the company. You may even decide in the future, with the consent of the other shareholders, to sell the company with the property asset.
Can My Child Be a Shareholder of a Company Under the Age of 21?
Technically speaking, anyone can be a shareholder in a company at any age. However, they cannot be registered as “Managing Director” until the age of 20.
Typically speaking, houses tend to be cheaper than condominiums per living space SQM. There are reasons for this and of course, pros and cons to choosing a home over a condominium.
There are many other benefits to living in a condo, but these tend to be the reason why they are more expensive per the SQM when compared to a house.
The buying process is similar to what you’d expect, in that you find a property that you’re interested in, view it, then begin the negotiation process. Only, there’s a few extras thrown in to the mix as well.
What is the Typical Deposit Amount and is it Refundable?
When buying property in Pattaya, Thailand, the typical deposit paid will be 10% of the unit cost, which may be negotiable depending on who you work with. As a rule of thumb, the contract will detail the conditions and status of the deposit and the balance payment will be paid within the term of the contract, with deposits going toward the overall payment amount. If you decide to purchase another property after you sign the contract, you will, however, lose your deposit.
Transferring Money from Abroad
When transferring money from abroad into Thailand, the best way to do this is transfer it over in the original currency (e.g., GBP, USD), and then convert into Thai Baht (THB). You will also need a Foreign Exchange Certificate or Foreign Exchange Transaction Form. It is the official document prepared under BOT regulations to report foreign currency exchange transactions in Thailand. It should feature the following information:
Can You Buy a House or Condo with Money Earned in Thailand?
All money for the purchase of a condo must be sent to Thailand from a foreign country in the original currency. Without proof of this, a foreigner cannot register the condo in their name.
There is a misconception that foreigners are unable to get a loan or mortgage in Thailand, but that is not the case. It is indeed possible for foreigners to access property financing in Thailand, however, the conditions are rather restrictive and in most cases, Foreigners become Guarantors for the Thai Buyer (Wife or Long-term companion). One such stipulation that Thai banks place on mortgages is that a lender can’t hold a home loan past the age of 60. The assumption is that people over 60 lack the income to repay a sizable mortgage. We recommend getting in touch with a Financial institution for details, but a Singaporean Bank such as UOB is known to offer Mortgages to Foreigners in Thailand.
Understanding Property Tax as a Foreign Homeowner in Thailand
Property tax in Thailand is complicated and as of July 2020, the details for are as follows*, please remember things can change quickly and to check with our consultants for up to date info.
These taxes apply to all cases, whether personally owned or in the company name.
When it comes to business tax upon the sale of a property, a levy of 3.3%* of the registered sale price or appraised value will be required to be paid (if the property is owned for less than 5 years*). This is made up of 3% business tax, and 0.3% local tax.
*the Thai tax system can differ from province to province and the above details are specific to Chonburi, as well as being subject to change. We recommend contacting one of our agents for more details on your specific situation.
Owning Property/Land through a Company
In a situation where a Foreigner owns a property through a Thai Company (Thai juristic entity) and uses the house as his/her holiday home or residence, the same tax rules as the previous section apply*.
In the case where Property is used for business or other purposes, but not for living (Land or buildings). The following Tax applies*,
*tax rules are always changing and with new 2020 rules like above, it is important to check with a Tax Lawyer before making decisions.
The short answer is yes. When looking at buying a condo in freehold, your real estate agency will be able to handle all of the processes easily enough, so a lawyer may not be necessary. However, if a Thai company is involved in the process, then it’s always safer to work with a lawyer. This will allow you: unbiased due diligence, the additional setting up or transferring of a company (if applicable), liabilities and control with shareholders, and of course, greater experience when it comes to dealing with complex contracts and legal documents.
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Buying property in Pattaya can be a rewarding experience, but it’s essential to be well-informed and prepared. Partnering with a reputable real estate agency and considering legal advice can help streamline the process and minimize potential pitfalls.
While the information presented may seem overwhelming, taking your time to conduct thorough research and due diligence will pay off. With the right guidance, you can find your dream home in one of the most beautiful tropical destinations in the world.
If you’re ready to embark on your property-buying journey in Pattaya, feel free to contact us. We’re here to help you navigate the market and answer any questions you may have about your eligibility and the buying process.
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