| BUYING PROPERTY IN THAILAND
WE CAN
ARRANGE YOUR WORK PERMITS, PARTNERSHIPS, CONTRACTS, COMPANIES
& VISAS THROUGH OUR LAW SERVICE; Title searches, House
inspection reports so be safe.
To date foreigners may
own
- a unit in a registered Condominium
- a
building (as distinct from its land)
- a
registered leasehold of up to 30 years for all types of titled land
(and/or buildings).
- a company can purchase land and buildings but will be inspected and
all Thai shareholders veted.
- more than 49% of a condominium unless in Company form.
- foreigners can own land being 49% in a company but the company must operate a business & shareholders interviewed so not that easy anymore
- if you invest 40m baht you can buy 1 Rai of land in Thailand outright.
Thailand has so many different types of
properties for sale that whatever your dream home is, you can realize it
here if you do the paperwork right. Prices are a lot cheaper than
Western houses but some aspects need close scrutiny especially wiring,
water & most importantly the deed title. Now that you want to buy a
house what should you look for?
The first thing you need to do is obtain the services of a reputable
real estate agent or lawyer on your behalf. The Thailand Realty Industry
is not regulated so watch out for agents forcing you to sign contracts,
& check the title
deed to make sure the property is what it says. Do yourself a big
favour and obtain a House Inspection report which in effect pulls the holes
out of the property! Some buyers have bought
the house only to find the land is on a different title & visa versa
or the cracks have been disguised. Once you buy then its your problem.
PAYMENT:
A deposit of 10- 30% is usually required to
secure a property and total payments should be made within 30-60 days
(see your lawyer first) but normally once the transfer has gone through. If signing a purchase
agreement then up to 30% down & 70% following transfer. Normally the
seller will pay the changeover tax which starts at 2.5%. However if the
seller has owned the house longer than this [period it is discounted.
Some Land Offices will charge up to 8% depending on the area and office.
An agreement can be made between buyer and seller than each pay 50%. You can obtain longer periods but you will probably be required to
pay a higher deposit. Deposits are normally non refundable, except by
default of the vendor, so bear in mind that once the deposit is placed
you are committed.
This situation also prevails for the vendor. He must refund your deposit
and pay a penalty of an equal amount if he defaults on the contract.
Deposit in escrow is still rare in Thailand, but it is becoming an
increasingly recognized way of proceeding. It generally trades off
greater security for the buyer's deposit versus a weakened claim for
damages in the event of vendor default.
Beyond the price, payment and closing schedules, it's important that a
contract includes clauses to cover who will pay the legal fees, transfer
fees and taxes (there is often a business tax and always an income tax
assessment made at time of sale) as well as an understanding of the
value at which the sale will be declared - this is typically (for tax
reasons) at or close to the government minimum assessed value.
A foreigner buying a condo must transfer
funds from a bank account out of Thailand in foreign currency and verify
the transfer on paper. The transfer of funds must be in the same
name as the name that will appear on the final purchase contract ie. the
buyer. Funds must be transferred into a Foreign Currency Account in
Thailand opened in the Buyer's name. Use Bangkok Bank, Thai Farmers Bank
and Siam Commercial Bank and make sure you tell them that the purpose of
his or her opening a Foreign Currency Account is to purchase a condo in
Thailand. This law is somewhat a catch 22 situation as the Foreign Banks
usually will not write such a letter but don't worry. You can remit as
much as you like to Thailand via your bank. Transfers out of this Foreign Currency Account in Thailand
into a Thai Baht Account or some form of Thai Baht draft or check to the
Seller must be made in amounts US$5000 or more in order to qualify for a
"Tor Tor 3" Certificate issued by the Buyer's bank to verify
that the originating funding came from outside Thailand in a currency
other than Thai Baht. On the "Tor Tor 3" Certificate, it
should state explicitly that the Thai Baht funds are used "to
purchase a condominium" in Thailand. Taxes are payable by the buyer
or seller of a condo in Thailand such as the Transfer Fee/Stamp Duty Tax
of 0.5% usually payable by the seller upon the date of the actual sale
or a Special Business Tax of 3.3% which is usually payable by the seller
if the property has been owned for less than 5 years. By the way there
is no limit on how much you can remit into a Thai account from overseas
and no tax. Tax levied at 15% is on interest earnings only.
REMITTING FUNDS: If sending over funds to
purchase a house you must tell the National Bank what you are using this
money for with sums exceeding 2,000,000 baht quantities. If remitting
funds from abroad to purchase property which is the law over sums of 2m
baht it may save you when it comes to a divorce situation of whose funds
were used to purchase the property. If you wish to
know more than ask us.
COMMISSIONS
Are normally 3% -5% but some charge 10%.
Watch out also as some realties charge both the seller and the buyer
& even hike the price up and have deals with the owners. We do not
do this.
BUYING NEW CONDOS NOT BUILT
Some Chiangmai condo buildings are not desirable and have a bad track record of trying to get all the money from a foreigner with sub standard finishing and not abiding by the contract that the foreigner signed. If this Company does not complete the project it is a court case to try to get your money back and can take a long time. Please note some buildings we know we will not be a party of selling them. If you are not sure get a good lawyer who can check the company out or ask us. If you pay based on the glossy sales pitch or even give a deposit this is normally non refundable. We have had problems selling Twin Peaks Condos but have assisted the buyers as best we could.
BUYING
A CONDO:
A foreigner can ONLY own a condo in
his / her name OUTRIGHT. You cannot own a house and land in your name unless you
invest 40m baht = 1 Rai of land. Bank's do not lend to foreigners;
only Thais or Companies and you must lease, or have a Thai Company to own
a house in your name. Ask us if you wish to borrow (must have
overseas collateral).
Just a note about buying Condos. ---Find out what the monthly maintenance
costs are from the managers. Ask for this in writing. Avoid unfinished
projects as they may run out of money or be over mortgaged. If very few condos have been
sold in a building with good amenities like landscaped grounds, security
Guards and a receptionist and office have the title searched but most of
all someone has to pay for all this, plus
the electricity for lighting and lifts. The total cost (often inflated) has
to be divided up among the condo owners, which can be a lot if only a few
units have been sold. Ask for an exact statement of maintenance costs and
how they are paid. If the project has different size condos in the same building, large units will pay more towards maintenance costs than small
units. If you are a legal resident you can obtain a mortgage but you
need to check with your bank and credit. The best idea though is pay
cash as you can negotiate but you must remit from abroad. In Bangkok look at around 25,000 -100,000
baht per sq m. A foreigner can only buy max 40% of a condo unit so if
that 40% has been taken up and you are the 42% person you may find you
are buying a lemon so to speak. If the developer owns a majority of
units you may not like his manager but if the owners have majority votes
than they can remove him.
The Condominium Act has been
amended. Now 49% of units in all condominiums and 100% of units in
condominiums in a total development area under 5 rai located in Bangkok,
all municipal districts and such other areas as shall hereafter be
announced by the Minister of the Interior (which is expected to include
rural Phuket) can be foreign owned. Funds used to buy a condominium
& remitted from abroad are recorded by a Thai Bank on a Tor Tor Sam.
Purchases of condominiums by foreigners come under the Condominium Act
B.E. 2535 (1992). The owner of each condominium is issued with a
certificate of unit ownership. The certificate also has a statement with
percentage rights over the common areas of the building each owner has.
COMMISSION
PAYMENTS:
Are normally levied on the seller rated
at between 3 & up to 6% of the asking price. Some agents are known to
charge a commission from both the buyer and seller while we are told 10%
is being levied by some. Due to the
unregulated realty industry you must use discretion when buying off any
agent or person. Ask how long they have been in business & look at
their company papers for proof. If they say the price of a house does not include their
commission, chances are this company is getting a cut both ends. Our
company levies a commission solely on the "seller" & makes
sure the person buying is getting the best deal for their money. We
normally only sell houses that have a chanote (clear title).
ONSITE
INSPECTION REPORT:
If you want to make sure your house is
safe and has what it should have & hasn't had recent false
renovations, hidden maintenance, then we also conduct a professional onsite inspection house
appraisal of the home you want to buy or sell. This inspection is over and
above your title search but compliments the title search as we work in with
our own lawyer. This 5-8 page onsite
inspection report covers everything from electricity, inside and outside structures,
water supply, plumbing, and general condition of your house & land,
elevation etc in a check list report. Added to this we give you the
buyer, a full written maintenance report plus our suggestions
and recommendations all in
English. We even oversee the recommendations on your behalf. Cost for this Inspection ranges from
5000 baht for new houses under 2 years old to 6-8000 baht for a
standard 3-6 bedroom older house, condos 5000 baht as we look at the
entire building ( This does not including away travelllng
expenses). eg. cost to inspect in Bangkok is 12,000 baht to start and
extra if we have to travel.----takes 3-4 days
----report printout. We do not conduct land area searches as survey pegs are not
shown. For this you need a surveyor which we can obtain for you. Other buildings like Commercial
properties we can quote you. PLAY IT SAFE-- WHY HAVE A HOUSE THAT WILL
NOT LAST!!!!!! As of August 2005 we have managed to assist foreign clients
before they buy with the knowledge that the seller will initiate our
recommendations & saved money for our clients. It is worth it
to have these houses inspection reports.
We highly
recommend you obtain a Title search and House Inspection report before
you purchase ANY property in Thailand. Cost Title search = 7000 baht
Comprehensive
Title search as well as House Inspection fee starting at 3000 baht.
KITCHENS
& AIR CONDITION INSTALLATIONS:
When buying an existing
home or new house you may want to have a new western style kitchen
installed or maybe air condition units. If we carry out a Housing
Inspection then we also in our report have a free quotation for air
condition units and kitchen joinery for you with FREE installation or
arrange on your behalf. We can help you with the top Kitchen
manufacturers.
ARCHITECT:
Ask no further as we use
Khun Da in ChiangMai recommended to us who speaks excellent English and
whom one of our partner's Dr. Harry Gair is presently using. We can
arrange for you as many foreigners use her services.
INSURANCE:
We use the services for all
your house insurance. Please just ask us as we are agents for Thai
Zurich in Chiangmai and all over Thailand. Need to know more then ask us. We
can advise you on all your insurance needs & whether you go through
us or you do yourself there is no difference in the price. However using
our services we make sure you are happy before you even have to pay any
more------- no hidden agendas as we are safe.
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