Buyers Guide
Introduction : Buying Property : Simple Steps : Leasehold vs Freehold Q&A : Mortgages : Currency Exchange : Rental Management and Property Maintenance : Consultancy Service : Legal Advice
Introduction to buying in Thailand
Thai Holiday Villas aim to remove all the pain usually associated with purchasing property abroad, presenting you with clear, simple options so that you can acquire your property with real peace of mind.
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Thailand is situated at the centre of the Far East and in recent years has enjoyed steady economic growth that has outstripped many of its rivals. It enjoys good relations with its neighbours including China. Foreign investment in Thailand is at an all time high.
It has a history of stable government and constitutional monarchy, headed by the much revered King, enjoys universal respect. It has a comprehensive laws on property purchase and leasing and these laws are well regulated and enforced. Buyers' interests are well protected under the law and so long as regulations are followed, the whole process is simple and straightforward.
Buying property in Thailand
Although the Thai law stipulates that a foreigner may not own land in Thailand in his name, he has the right of ownership of
buildings only. If a foreigner wishes to purchase land in Thailand to build a property, he has 2 options:
1.
Leasehold: very different to UK leasehold and a popular choice for many buyers.
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The land is purchased on a 30-year leasehold with an option to extend the lease for additional 30 year periods. Possession of the land is assured by virtue of the fact that property occupies the land. The lessor has no claim to the property upon expiration of the lease, as the property is a separate entity from the land.
In order to be enforceable, any lease for a period longer than three years must be registered at the land department, which involves payment of a registration fee and stamp duty based on a percentage of the rental fee for the whole lease term. The original registered lease remains in the force and effect even if the property is sold. Both parties can contractually agree to renewals, but this right cannot be registered at the Land Department.
2.
Freehold: requires foreigners to use a Thai company as a vehicle for purchasing the freehold for their land.
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If a foreigner is going to operate a business in Thailand then he may purchase the freehold of the land through his Thai Limited company. The land will be owned by the Thai Company, not by the individual.
The company must be a legitimate enterprise and properly set up under Thai law. You will need to seek advice from a qualified lawyer as to the most suitable strucure to adopt.
Purchasers of condominiums may buy the freehold so long as total foreign ownership does not exceed 49% of the whole structure.
Although there are a number of other ways to purchase freehold in Thailand, the avenue open to most foreigners is to lease land for 30 years.
Thai Holiday Villas consultants are here to help you each step of the way and make the process of acquiring your property as painless and simple as possible. We have broken down the buying process into simple steps so that you see at a glance what will be required of you:
Step 1 - Choose your villa or condo style and select your preferred plot and then complete a reservation form and pay you reservation fee.
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Usually you will be asked to pay a deposit of about THB 100.000 to secure your plot. This will reserve the property for between 10-21 days.This deposit is held in a client account by Thai Holiday Villas Limited as agents for the developer. This deposit remains in the UK in this protected client account until you complete and sign a purchase contract. The reservation fee is normally non refundable.
Step 2 - Either appoint your own lawyer to act on your behalf or take a Legal Package provided by the Developer.
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Thai Holiday Villas Limited can assist you in finding a suitable lawyer, but can offer no legal advice. Your Thai Holiday Villa Consultant will assist you in deciding any alterations you require to the standard layout plans and what items you may wish to order from the furniture and buildings price list. A final contract price will be agreed.
Step 3 - Pay the balance of your deposit, less your reservation fee (usually 20-25% of the purchase price).
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You will also be required to sign a purchase agreement. Your lawyer will check legal title and the developer will confirm that you chosen plot will accommodate your style of villa.
Step 4 - During construction you will be required to pay instalments towards to total price. These will be stipulated as to when and how much by each developer.
Step 5 - Pay remaining staged payments until building is complete.
1 - Can a foreigner obtain 100% interest for a land lease in Thailand?
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Yes. A foreigner can obtain 100% interest for a land lease in Thailand. Unlike direct land ownership, the law allows foreigners to obtain long-term land leases.
2 - Do I have to register the land lease at the Land Department?
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Leases up to three years need not be registered but registration at the Land Department is mandatory for leases that are three years or more.
3 - What is the maximum lease term available?
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The maximum lease term available is 30 years, with an option to renew for an additional 30 years. Each lease renewal that is agreed upon with the landowner must be registered at the local land office. For each new registration, taxes will be levied.
4 - Why is land leasing favoured by foreigners who wish to own property in Thailand?
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There are numerous obstacles faced by foreigners who wish to buy land or purchase property in Thailand. To avoid these obstacles, many foreigners choose to acquire land on a 30-year leasehold with an option for extension. This is the simplest and most straightforward way for foreigners to acquire property in Thailand. In addition, a lease stays valid even in the event that the property or the land is sold.
5 - What are the advantages of having a land lease over Purchasing land with a company?
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A foreigner’s lease rights are formally recognized by the Thai law. The land lease is executed and registered only once, after which very little legal maintenance is required. In comparison, a limited company has several shareholders who may have interests that are different from yours, and this could translate into potential risks for you and your objectives. Also, a company requires regulatory compliances such as yearly balance sheets to be filed with the Tax Department.
Mortgages
There are 3 possible ways you might seek to finance your property purchase:
1 - Equity release from your existing property
2 - Where offered use a Developers mortgage (usually no more than 50%)
3 - Apply for a Bangkok Bank (Singapore Branch) Local mortgage.
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Currency exchange
Some developers give the option to pay in different currencies other than Thai Baht. If you require international currency exchange either to pay the instalments on the purchase of your villa or to transfer money to Thailand, then check out
World First. They offer very competitive rates. Check them against the rate offered by your own bank. You may be surprised at the difference in exchange rates.
Rental management and property maintenance
Depending on which development and property you choose we have a range of options to ensure that your property will not only enjoy a healthy capital appreciation over the coming years but that you will also have the ability to lock up and leave your home whilst it is marketed and maintained on your behalf.
Options range from 5 year guaranteed rental return of 47% (which equates to over 9% per annum) through to promoting your property privately on high traffic villa and condo rental websites. For detailed information go to your chosen property and download the associated brochure.
Consultancy service
Thai Holiday Villas offers a full consultancy service.
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Thai Holiday Villas Limited is a UK based company registered in England that is the appointed agent for selected developers in Thailand.
Consultant’s Role
Our role is to act as an interface between you as client and the Developers/selling agents as Vendor of the property(ies). We undertake to use our best endeavour to ensure as simple and hassle free purchase as possible on behalf of clients. We offer to provide you with a quality service acting as Agent for the Vendor.
We promise to:
- Offer advice to the best of our ability and understanding of your stated needs
- Guide you through the process of choosing a suitable style of property
- Assist clients in completion of purchase documentation
- Hold monies paid by clients to Thai Holiday Villas in a UK bank in a separate client account
- Assist and advise clients on alteration/ acceptance of standard building plans
- Advise and assist clients in ordering items from the standard building extras list
- Advise and assist, if required, in selecting items from the furniture list
- Advise on any visa applications required
- Give general advice on living in Thailand
- Respond promptly to correspondence and enquiries from clients
- Provide our basic consultancy service free of charge. We reserve the right to raise charges for additional services. If clients are likely to incur additional costs, these will be advised in advance
Client undertaking
In taking our consultancy service, the client agrees to respond promptly to correspondence and enquiries from the consultant.
Thai Holiday Villas is a Member of the Association of International property Professionals (AIPP) and abides by their code of conduct.
Thai Holiday Villas are not able to offer legal advice. Before purchasing a property, all clients are advised to seek independent legal advice. Such advice will best come from lawyers based in Thailand. If required we can put you in touch with independent lawyers willing to undertake purchase/lease agreements.
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