Investing in property is one of the few investments which when carefully selected will give a high ROI (Return On Investment). Thailand is one of the upcoming countries in Asia that offers diverse real estate investment in Phuket, Bangkok and other provinces to foreigners.
It is a favourite destination for many who seek to enjoy the tropical beaches, beautiful mountains and exotic forests integrated with a mix of culture. More so, many international companies are choosing it as their central head office to conduct business all over Asia.
Here are essential tips for buying property in Thailand as a foreigner
1. Ownership of property
Although you cannot own land as a foreigner in Thailand, you can still own property on the land without having ownership of the land. Confusing? According to the Thailand government, a foreigner is not allowed to own land. The country still wants to ensure that the locals are the ones who own the land and to prevent skyrocketing prices of lands in the country due to foreign investment.
Can foreigners own property in thailand
Yes, foreigners can own property in Thailand but not land.
However, there are other ways in which you can get the land of your choice and build property on it. See them below:
- Through a Thai limited company – The company will own the land on your behalf. However, you are not allowed to own more than 49% of the shares. The only exception is U.S citizens (Thailand and U.S have a treaty that allows U.S citizens to have full ownership of a Thai limited company)
- Leasehold – A foreigner, can choose to enter into leasehold with the owner of the land. Leasehold is usually 30 years which is renewable up to three times.
When writing the lease you need to ensure that you can leave the land to another person. Reassigning can happen if you want to sell the land or want to change the ownership to your spouse or children.
2. Legal advice
Buying property in Thailand requires that you get a lawyer to avoid getting mixed up in fraud. A local lawyer to provide you with the legal help you need to buy property. Just like any country in the world, some people are intent on defrauding investors on their hard earned money.
The lawyer should also help you do a comprehensive search of the title deed. You must verify that the person leasing the land has the legal authority to do so. The land development in the country has records of title deeds way back from the first owner.
There are three types of title deeds:
- Freehold or Nor Sor 4 – Grants full rights to the owner to do with it as they wish as long as it’s according to the law.
- Nor Sor 3 Gor – This means that owner is waiting for the full title deed (Nor Sor 4).
- Nor Sor 3 – The lands department has not yet measured the land.
- Possessory right – Only recognised for its tax payments at local government office.
Therefore the best-recommended title deed to lease for a foreigner would be freehold (Nor Sor 4).
The search will also enable you to know the kind of property that is allowed to build in the area. Yes, there are restrictions on the type of structures in specific areas.
Lawyers will cost you money, but they will be worth it in the end. Remember nobody understands a country better than the locals.
3. Take your time
The desire to own property may make you impatient. The time taken to find the property of your choice may take a few months, and so don’t be in a rush. There are many opportunities in the country.
For example, available property in Thailand for foreigners includes; apartments, condos, and villas. These Thailand investment opportunities have their perks. Ensure that you compare different properties regarding:
- Proximity to the main road and the distance towards public transport
- Other utilities such as hospitals
- Prices of the same property in other areas
4. A property manager/agent
A real estate agent will guide you on how to buy property in Thailand by foreigners. Finding property in a foreign country can be a challenge especially when they speak a foreign language. It is recommended to get a property agent to help you find a property that is within your budget but can still bring in profits.
Hiring an agent will save you time as they will act as an intermediary between you and the property owner. However, if you prefer dealing with the owner directly, then there is no problem. It will only become a challenge if they don’t speak your language.
A property manager will also come in handy. They will oversee the property management when you are not in the country and report to you. You can quickly fly in the country when you need to check the property.
5. Deposits
If you are satisfied with the terms of the seller, you may be required to leave a deposit to let the seller reserve the structure or land for you. Make sure that the two of you sign a clause that indicates the expectation of the deposit. For example, the deposit may be subject to the contract terms.
6. Contracts
Make sure that you have your lawyer present to go through the arrangements to ensure that what you want is indicated in the contract. If the property is under construction make sure that the contract allows for multiple instalments.
There is no need to pay the full amount when the houses are not completed. The contract should be fair to both the seller and the buyer, not one-sided.
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