Advice and answers to legal, tax, rental, leasehold and purchase questions regarding property in Thailand


qWhat about Land Appraisals & Valuations?
 
aFinding the exact appraisal price for land is difficult since there are generally three different appraisal rates; the government rate, the appraisal company's rate and the rate which is considered to be fair market value of the land. Over the last few years all of these rates have begun to come closer together.
 
qWhat is a condominium? / What is an apartment?
 
aA condominium is like a flat (apartment) that you can own in common with other owners of units within a high-rise with complete facilities. This means that each tenant is a shareholder in the building and surrounding common property, and they pay a monthly management fee based on the square meter size of their apartment to maintain the building and public areas.

Foreigners may own a condominium freehold; with full rights of ownership.

An apartment is a building owned by one owner who lets out units within the building on a short or long-term basis.

 
qWhat is a Townhouse?
 
aA townhouse is a single vertical dwelling in a block of similar vertical dwellings, each owned by one owner.
 
qWill you help me overcome the language barrier?
 
aYes of course! You can call on us any time for help. However, most condominium and apartment building managers speak at least some English and should be able to understand you.
 
qHow do I pay the utility bills?
 
aIf you are renting, most buildings will pay the bills for you and add them to your monthly rent. It is a good idea to find out the cost of utilities before you move in so that you know how much you will have to pay. If you are living in a house, we can advise you on the best methods of payment. For example, most utility bills can be paid direct from your bank account and the receipts sent to your residential address. Nowadays, you can also pay utility bills at any 7/11 store. When buying, you should also inquire about telephone and electricity connection fees.
 
qHow safe is it to live in Thailand?
 
aThailand has an enviable reputation as a very safe place to visit and to live. The people are friendly, and there is relatively little crime against foreigners. However, like anywhere else in the world, there is always the potential for crime.

If our agent feels an area you visit is not safe, he should advise you and suggest alternatives. We all want you to enjoy your stay here!

You have probably read the recent news about the Muslim unrest in the three southernmost provinces. The government is working to solve this problem. Despite the rhetoric of a few Muslim hot heads, relations between Muslims, Thais and foreigners throughout Thailand have always been friendly and tension-free. Knowing some of the people involved in security work in the Kingdom, we are confident that Thailand will continue to remain a safe and pleasant country to live in.

 
qWill I need to bring my own furniture? And can I buy quality furniture in Thailand?
 
aThere are plenty of fully furnished apartments and condominiums available. If you don't plan to stay in Thailand permanently, it may be better to leave your furniture in storage back home. It will probably be too heavy for the tropics anyway. Even if you plan to rent or buy a house, you can always get one fully furnished. If you prefer to furnish it yourself, your agent can advise you on the best places to shop.
 
qI have heard there are bad floods here sometimes. Will I have to worry about them?
 
aIn the bad old days floods were a problem every year. Some years were worse than others. But since the Bangkok government has installed anti-flooding measure, flooding is not a big problem in Bangkok any more. The drainage system has been upgraded and is well maintained so that even the worst floods will drain away within a few minutes...hours if we have a particularly heavy downpour. If you plan on living outside Bangkok your agent can advise you on the best places to live to avoid the problem.
 
qHow fast can you find me somewhere to live?
 
aAs fast as possible. We will prepare a list of properties that have the features you are looking for after we discuss your needs with us.
 
qWhat is the minimum rental contract, and what are the terms and conditions?
 
aMost rental periods are for one year, although some shorter terms are available. In most cases you will need to pay a 2 month deposit, and one month rental in advance when you sign the contract. Sometimes, especially for longer contracts, the landlord may require 3 months deposit. The deposit is refundable when you move out, although the landlord may deduct expenses for any damage to the property during your tenancy.
 
qI'm moving to Thailand, which is a completely new country with different customs. What can you do to make it easy for me?
 
aIf you plan to stay here for more than 1 year and you have never been here before, we recommend you take a cross-cultural seminar that will explain the many strange and different things you will encounter in your daily life.
 
qWhat should I look for in a property?
 
aWhether you are considering renting, leasing or purchasing property there are several infrastructure and other considerations which must be taken in to account:

1. Location: Roads, proximity and access to business, shops, hospitals and etc.
2. Telephone: Access to direct lines, IDD facilities, and Internet connection.
3. Water: Mains water and supplementary storage facilities.
4. Electricity: Mains connection, and backup generators for condominium blocks.
5. Security: 24 hour security service, door and window locks.
6. Cable or Satellite TV connection.
7. Pest Control: localised spraying and flywire screens on windows.
8. Hot water facilities: nearly all in Thailand are instant and not storage.
9. Air Conditioning: a necessity in Thailand.
10. White Goods: Refrigerators and Washing Machines.
11.Quality of the building mangement company.

 
qCan you help me decide where to live?
 
aBangkok Property Agents will help in your decision on where to live based on your requirements.
 
qWhat sports and exercise facilities are available?
 
aThailand offers a wealth of sports, including golf, trekking, para-gliding, diving, fishing, golf, squash, jogging venues, and so on. Serviced apartments and condominiums usually have their own exercise rooms and swimming pools. Bangkok Property Agents have a good knowledge of the buildings and will be able to show you properties that meet your requirements.
 
qWhat about schooling for the children?
 
aBangkok boasts some of the best international schools in the region. Fees are high, but so are their teaching standards. In addition, there are some excellent private Thai schools. You will be able to see through the search engine on the Bangkok Property Agents website which schools are located in the area you would like to live.
 
qDo I have to pay Bangkok Property Agents any additional fees for finding me a property in Bangkok?
 
aOnly if the rental contract is shorter than one year, then we charge the eqivalent of one half months rent. Otherwise the seller or lessor will pay our fees.
 
qIf I buy property and want to live in Thailand, how can I do that?
 
aYou can apply for a visa, depending on the type of residency laws you would like to stay here under. For example, if you plan to buy a property and run a business, you can apply for a business visa. Or if you plan to retire you can apply for a retirement visa.
 
qCan foreign citizens own land in thailand?
 
aWith limited exceptions, foreign ownership of land is generally prohibited under Thai law, including both the Land Code and the Foreign Business Act. However, foreign citizens may own a house, villa, or other structure built on the land.


 
qCan foreign citizens lease land in thailand?


 
aForeigner citizens are permitted to lease land for a period of 30 years, in addition to a renewal term of an additional 30 years. However, only the first 30 years of a lease may be registered at the Land Office. The Land Office charges a registration fee equivalent to 1.1% of the rental amount.
 
qCan foreign citizens own condominiums in thailand?


 
aYes. Condominium ownership is available to foreign citizens. However, foreign citizens may only own a maximum of 49% of the livable space (excluding common areas) of each condominium building.


 
qIf i purchase a condominium, who holds the title deed to the land and the common areas?


 
aThe land and common areas of a condominium building are owned by a “juristic person” (a Thai corporation) controlled by the condominium unit owners. The title deed for each condominium unit is held by the owner of each condominium unit.


 
qCan foreign citizens own townhouses in thailand?


 
aYes. Foreign citizens may own townhouses (but may not own the land beneath townhouses).
 
qCan a thai company acquire land and/or a house?


 
aYes. However, a majority of the shares of a Thai corporation must be owned by Thai citizens (with limited exceptions). Thai citizens owning shares of Thai corporations engaged in land ownership must demonstrate their source of funds to purchase the shares. Note that each Thai corporation must have a minimum of 7 shareholders under the Civil and Commercial Code.
 
qCan foreign citizens purchase shares of an existing thai company which owns land
 
aYes. However, a majority of the shares of a Thai corporation must be owned by Thai citizens (with limited exceptions). A change of ownership of any shares of a Thai corporation must be registered with the Ministry of Commerce (Form Bor. Or. Jor 5).
 
qWhat is the difference between freehold and leasehold?
 
a“Freehold” refers to outright ownership of the land. “Leasehold” refers to a possessory right to the land.
 
qCan foreign citizens lease the land and own the house?
 
aYes. The Land Code does not restrict the right of a foreign citizen to own or construct a house built on leased land. However, the ownership of the house will revert to the land owner upon the expiration of the land lease unless the land lease agreement explicitly provides otherwise. (Some local governments refuse to grant construction permits to foreign citizens and companies which do not maintain offices in Thailand.)
 
qWhat type of long-term lease is permitted under thai law?
 
aThe lease agreement may include an option to buy or transfer the land during the lease term. The term of a long term lease may be 30 years with an additional 30 year renewal term. The enforceability of a lease term in excess of 30 years (plus a 30 year renewal) is highly questionable under Thai law. A lease agreement may also restrict the right of the property owner to sell, transfer or otherwise encumber the land during the lease term.
 
qIs a long term lease enforceable against the heirs of the lessor?
 
aYes and no. During the initial 30 year term of the lease, the lease is enforceable against the heirs of the lessor. However, the heirs of the lessor are not bound to honor the 30 year renewal term. Therefore, it is advisable to avoid lease agreements with individual lessors (as opposed to corporate lessors).
 
qWhat are the benefits of a long term lease?


 
aIf a long term lease contains an option to buy (or transfer) the land, the lessee may buy or transfer the land anytime during the lease term if the then current laws of Thailand so permit. Registration of a lease agreement with the local Land Office is also less expensive than registering a change of ownership of the land. In addition, there is no need for annual legal and accounting fees under a lease agreement.


 
qCan a thai spouse (married to a foreign citizen) own land in thailand?


 
aYes. However, some local Land Offices inexplicably refuse to register the land under the name of a Thai citizen with a foreign family name.


 
qCan i obtain mortgage financing in thailand?


 
aYes. However, some local Land Offices inexplicably refuse to register the land under the name of a Thai citizen with a foreign family name.

(Note that BPA has negotiated a loan program with a well-known offshore bank to provide a loan of up to 70% or 80% of the purchase price. If you plan to invest through BPA, we will be happy to assist you in obtaining a mortgage.)
 
qDoes thai law provide for warranties on homes and condominiums?
 
aNew condominium units purchased directly from developers are protected by 5 year statutory warranties. Similarly, houses purchased directly from developers under proper “land allocation licenses” are also protected by 5 year statutory warranties.
 
qWhat taxes and fees should i expect to pay when i purchase a condominium in thailand or lease a home/land in thailand?
 
aApplicable taxes and fees on the transfer of a condominium include (1) transfer tax of 2% of the appraisal value; (2) special business tax of 3.3% of the purchase price or stamp duty of 0.5% of the purchase price (depending upon how long the property has been owned by the seller). The Land Office charges a registration fee of 1.1% of the lease amount to register a long term land lease as a property right.

(Note that the party responsible for payment of taxes is a matter of negotiation between the buyer and the seller or the lessor and the lessee, as the case may be. PPA staff will be happy to assist you in negotiating this and other contract terms relating to your investment.)


 
qWhat land taxes and fees should i expect while i own the condominium? specifically, are there any property taxes assocaited with the ongoing ownership of the condominium?
 
aIn Thailand, there are no annual property tax assessments (as in the U.S. or EC). However, a tax is imposed on any rental income at a rate of 12.5% of the annual rental value.


 
qWhat taxes and fees should i expect to pay when i sell the condominium? do i pay such taxes only on the “gain” or are such taxes paid on the full sales price?
 
aIf the condominium is owned by a corporation, corporate income taxes are imposed on the net profit on the sale of the condominium unit. Corporate income tax in Thailand is 30%. If the condominium is owned by a foreign citizen, taxes are imposed in accordance with a complicated formula contained in the Thai Revenue Code. The tax differs based upon the sales price, the term of ownership, and certain other factors.
 
qWhen i sell my condominium, can i send the sales proceeds back to my home country?
 
aYes, but only if you obtained a “Foreign Exchange Transaction Form” from your bank when you originally brought the funds into Thailand.
 
qWhat is the difference between a property’s appriasal value and purchase price?
 
aThe “appraisal value” is the value set by the local land office. The purchase price is the price agreed upon between the buyer and the seller.
 
qWhat are the regulations associated with bringing funds from overseas for purchasing a condominium? Can i wire funds directly to the seller from abroad, or do i have to wire the funds into a thai bank account held in my name?
 
aYou can wire the funds directly to the Seller from your overseas bank account or through your bank account in Thailand. In either case, you should obtain a “Foreign Exchange Transaction Form” from your bank in Thailand for all funds brought into Thailand in excess of $US 20,000.
 
qAre funds wired from abroad subject to the bank of thailand’s new 30% capital reserve requirement?
 
aThai banks will waive the 30% reserve requirement if you submit a copy of the purchase and sale agreement (for a condominium) or long term lease (for land).
 
qHow do i open a thai bank account as a foreign
citizen?

 
aMost Thai banks require that a foreign citizen have either a work permit or a retirement visa to open a bank account in Thailand. However, certain banks will permit a foreign citizen to open a bank account with a copy of a signed purchase and sale agreement. BPA staff will gladly assist you in establishing a bank account if you invest through BPA.
 
qCan i pay cash for my property purchase?


 
aYes. However, a cashier’s check (or bank wire) provides superior documentary evidence of payment.
 
qHow can i obtain legal advice concerning my investment in thailand?
 
aWe suggest that you contact Daniel Chernov (daniel@legalthai.com), an experienced American attorney with the law firm of McEvily & Collins (www.legalthai.com), one of Thailand’s leading property firms. McEvily & Collins maintains offices in Bangkok, Phuket and Koh Samui.