Thailand is an ideal location for investing in property for so many reasons. It is quite an exotic and popular tourist destination, the health system is in keeping with modern and international standards of healthcare, the property market has also been very stable for over a decade, ongoing taxes are low and the government waives transfer tax fees and stamp duties particularly for the benefit of foreign investors.
Thailand’s currency the Baht, is also the most stable Asian currency at the moment, which is appealing to investors in terms of gaining lucrative returns on their investments.
There are several ways in which you can choose to invest in property in Thailand. Here are some of them.
Purchasing a Condominium
This is one of the simplest ways to invest in property in Thailand. The Condominium act allows foreigners to own condos in full. They can purchase up to 49% of the available units in a development, while the other 51% are reserved for native buyers.
In order to invest as a foreigner though, you will find that the process of obtaining a loan through a Thai financial institution can be quite difficult. You might have some form of financial record and history in the country to provide evidence of ability to make good on your loan repayment, but it may still be difficult.
A more viable option is to try to obtain the loan through a bank in your home country, where you would have a solid and established financial record and credit history, in order to obtain the funds toward your investment. The condominiums can then be rented for income turnover.
In purchasing a condo however, there are some key things to keep in mind.
The money for the purchase the property must originate from overseas. This is a stipulation made by the amended Condominium Act of 2008, which requires that the money be remitted in the overseas currency, in proportion to the full value of the property in Thai Baht.
This requires Foreign Exchange Transaction Form Certificates from the loaner bank, for each payment disbursed, as part of the required documents which must be presented at the Land Department.
Purchasing a Detached House or Townhouse
The process of purchasing a single detached house or a townhouse requires a bit more in terms of the procedure. Under Thai law, foreigners are not allowed to own land, and the common thing with both of these types of structures is that they are landed. In order to be able to acquire ownership of this property, the foreigner would either have to be married to a Thai native or start up a company in Thailand of which they are 49% owner. The remaining 51% of ownership must be controlled by Thai nationals.
In the case of marriage, the property must be registered in the name of the native spouse and it is easy to see that there could be potential financial issues in the event of a future breakup. Thai laws are so structured to favour the holding of land for Thai nationals, so they are very serious about retaining it and providing opportunities for their own people.
In the second option where a foreigner can create a company in which name the property will be registered, they will come to realize that this is not such a bad option after all. Many times the 51% of shares is split up among multiple Thai investors, which still results in the majority of combined shares being held by a sole foreign investor. This gives the foreign director more control.
Purchasing Resort or Office Building Property
If you opt to make large purchases of resort property such as a villa or a hotel, or for office building purposes, then you will certainly need to route this through your limited liability company, as individual foreigners cannot own these properties. There are also requirements for the amount of capital needed to be eligible for ownership of these properties.
How to Start the Process of Investment
Now that you have decided on what type of property to invest in it is important that you familiarize yourself with the other laws of the land governing the sale. A successful sale always starts with a title search after identifying the property of interest, to ensure that it can actually be legally sold.
Alternatively, you may choose to hire a real estate agent with high credibility to route the sale for you. They will be able to provide advice and mediate negotiations as well source you a good lawyer.
Of course, you could always forego the agent and use an attorney solely. They will be able to provide you with some of the same services you would get through an agent and you will only have to pay one cost rather two separate ones.
Still as a third option, you may find it less of a hassle to deal directly with the developers if you are purchasing property through a new development. Take caution to ensure that you are dealing with a trusted developer, as they have systems in place to take you through the entire process of sale and acquisition.
One thing you may want to do for yourself with this option however is to hire a building inspector, so that the developer is obligated to finish everything according to acceptable standards before the transaction can be completed.
Author Bio – This article is written by Paul Smith promoting Phuket property for sale, Phuket real estate, Phuket villas, condominiums and apartments.