Ownership property in Thailand

Many foreigners have chosen to buy housing in Thailand. Basically, foreigners are not allowed to own land or property in Thailand. However, there are various options for reconciling the purchase of property in Thailand while complying with Thai law on property rights for foreigners. When buying a house, the land for the house can be rented for 30 years, Leasehold Agreement, with an extension of 2 x 30 years; as well as renewal of the contract upon resale. Buyer can also set up company in Thailand and buy the land through the company and get deed on the land. When buying an apartment, foreigners can own the apartment and get a deed to the apartment.

Land ownership:

Under Thai land law, only Thai nationals are allowed to own land or have a confirmed right to own land. Foreigner is not allowed to own land in Thailand. However, there are exceptions such as investing up to 40 million baht in approved shares that benefit Thailand or large foreign companies investing in Thailand. In both cases, it requires special permits from the Interior Ministry. A foreign spouse of a Thai citizen may inherit land but cannot register ownership of land and must sell the land within one year from the time of takeover.

Ownership of Land by Deed :
The basic proof of ownership of land and apartment is the deed, Chanote. It is the most important document which is a prerequisite for all real estate business in Thailand.

Ownership of land with leasehold Agreement:

Leasehold contract (lease contract) is for a maximum duration of 30 years. The contract is made between the owner of the land and the buyer of the land. The contract is often made in Thai with English translation. Ifb with the contract, the owner must make sure to state on the back of his deed, chanote, that the land has been leased out to the buyer. The owner of the land can then not pawn the land or sell the land. Leasehold contracts of more than 3 years must be registered with the land office, which will give the buyer ownership of the land. No Leasehold of property in Thailand can be longer than 30 years (one can have a Thai lease of longer duration, but a Thai court will only enforce it for a period of maximum 30 years). It is possible to get a renewal clause in the Thai lease, whereby you can renew the lease (max. Up to a further 30 years). The same applies to renewal on sale. However, in order to be able to legally carry out the Thai lease renewal, you must re-register it at the local land office in Thailand in connection with. with applying new lease on the back of the deed.

Ownership of land with partly foreign-owned company:

It is possible to set up a Thai company, Thai limited company, and buy land in the company’s name. But in recent years, the government has begun to enforce existing laws. Thai limited company can be set up with Thai owners who own more than 50% of the company, but with foreigner as director. The model requires that the buyer is really thoroughly informed, because it is under criminal liability to use Thai “straw men” in connection with setting up a company. The company is taxable in Thailand. The company must submit periodic accounts. The company must be able to document that it is run as a regular company.

Ownership apartment:

Foreigners can own an apartment in a building that is registered and approved under the Thailand Condominium Act. It states, among other things, that the building must not be owned by more than 49% of foreigners. In addition, foreigners must qualify for ownership. This means that the foreigner must have brought foreign currency at least equal to the total purchase of the apartment to Thailand and exchanged this amount for Thai baht. The receiving bank in Thailand must document the receipt to the authorities and the certificate must be approved by the relevant authorities.

Purchase expenses, financing and payment

Buying property; apartment, house with deed or house with leasehold agreement:

When buying property in Thailand, there are several expenses that the seller must pay in connection with the sale of property. The costs are often included in the actual negotiation of the final price to the buyer. But this presupposes that the seller and the buyer agree on what expenses or how much of the expenses are to be paid by the seller and the buyer, respectively. It is usually only the Transfer Fee that is negotiated. Seller bears the remaining fees. These are almost the same expenses that occur when buying property directly via deed Chanote or by leasehold agreement. When building a house, there is also a fee for building permits, etc ..

Purchase of property via Company:

The buyer must pay the costs of setting up a business in addition to the usual expenses that occur in real estate. Most real estate agents and law firms can set up a company for the buyer where all legal requirements are met. It costs a minimum of 35000 baht for setting up company, Limited Company. In addition, a minimum of 15000 baht must be paid for annual accounts. Prices are indicative and may vary depending on the provider.

Transfer fee:

Fee to the Thai state, for transfer of ownership. 2% (- 2.5%) of the property value. The property value is not the sale price but a value set by the land office and the state. The valuation is usually lower than the selling price.

Business Tax:

Fee to be paid to the Thai state for the transfer of the property. about 3.3% of the property value. The property value is not the sale price but a value set by the land office and the state. The valuation is usually lower than the selling price. The fee must be paid if the seller is a company or if the seller has owned the house for less than 5 years. There are certain exceptions for eg inheritance etc ..

Stamp expenses:

Max 0.5%

Tabian Baan:

Yellow or blue book, address registration. Foreigners must have a yellow book and Thais a blue book. The book must be registered at the country office. But the cost is approx. 1000 baht .. The price is indicative.

Income withholding Tax:

Tax / fee which is assessed at the country office and which depends on the value of the property and how long the seller has owned the property.

Financing:

Property in Thailand must be financed 100% by the buyer in most cases. It is not possible to borrow for the purchase of property in Thai bank for foreigners. Some providers offer partial financing. But the term and interest rate are not as favorable as when financing a home loan through a Danish mortgage bank. Most often, the home in Thailand is financed with loans in the free value from Danish property through a Danish mortgage bank.

Payment / payment:

The payout varies from 10% and upwards and thereafter the remaining amount is paid with 1 deposit. Some home purchases are paid over 1 year with eg 4 payments. In general, when buying a home, such as a new building, the home is usually paid in 4 installments, so it is agreed that the last installment is paid when the home is completed. However, in the case of new construction, most often of condominiums, the payment can be distributed so that the first installment / payment is low and the remaining installments are distributed so that they follow the construction with the last installment when the buyer’s apartment is ready for occupancy.

Current expenses property

The current cost of property in Thailand depends on whether it is an apartment in an approved condominium, housing in a resort, house on leased land (leasehold agreement), house and land owned by a company (limited company) or house and land owned by a Thai citizen.

Property tax:

Property tax applies to both apartment and house. The tax varies depending on the area in which you have property. The “more expensive area” the higher the tax. So the tax is highest in the areas where many properties are owned by foreigners. It is usually tourist areas like Hua Hin. Property owned by a foreigner is taxable in Thailand. This applies to both apartments, houses on leased land (leasehold agreement) and land and property owned by a company (Limited Company). As a guide, property in Hua Hin urban area worth 2 million baht should pay about 15000 baht per year in property tax to the Thai state. Outstanding property tax is calculated / charged on the sale of the property, if you “choose” not to pay tax on an ongoing basis per. year. Property tax must also be paid to the Danish state, but the tax to the Thai state is set off against the tax to the Danish state. The information here regarding. tax is indicative. Property owned by a Thai citizen is tax-free if the plot is a maximum of 400 m2. and the owner owns only one piece of property. If Thai owns more than one house, the next house is taxable.

Operating expenses house:

Property in Thailand has operating costs as property in Denmark. However, if one does not live in the property permanently, it requires the owner to hire service companies to perform maintenance. Prices are indicative and depend on provider and plot and house size. The following indicative prices are for house of about 120m2, plot 400m2 and pool 8 x 4 m:

Garden service: Approx. 1500 baht / month

Pool service: Approx. 2500 baht / month

Pest control: About 5000; baht / year

Aircon: About 500 baht per unit / year

Wifi: About 600 baht / month.

Common expenses for eg security guard, street lighting, renovation, etc .: Depends on residential area

In addition, there is electricity and water consumption. Water is very cheap and not more expensive than about 50 baht / m3. It costs about 5-7 baht kW. Both electricity and water are consumed in an uninhabited house if you have a private pool.

Many foreign homeowners in Thailand have chosen an agency to handle the tasks. Most real estate agents arrange property service as a complete package. Many people choose to pay the house manager to check that service is carried out properly and keep an eye on the property on an ongoing basis. Housekeeping agencies are appearing more and more. Prices start from about 1500 baht per month depending on the scope of agreed real estate service and overhaul.

Operating expenses apartment in approved condominium or house / apartment in resort:

Accommodation in a resort or condominium is subject to a fixed monthly allowance for common expenses. The cost varies and depends on the resort / condominium and the size of the home. Most current operating expenses are included in the common expenses. But it varies depending on the agreement with the resort / condominium