Sell and Purchase Property

Loft Property

Leasehold refers to when the lease holder (land owner) leases property to the lessee (buyer) for a pre-determined time period, which is typically this is 30 years. At the end of each period, the lease holder determines whether the lease it to be renewed for another period. In the event that the lease is renewed, both parties are required to register with the Land Department and are subject to pay government fees, which are inclusive of stamp duties. A potential issue for the buyer is that laws are subject to change over time or the land owner may simply decide not to new the lease. Therefore, any capital invested into leased property is liable to be lost.

Freehold refers to when foreigners can buy and own freehold condominiums. Additionally, the owner retains the right to lease, sell and develop the property in accordance with Thai law

In Thailand, land is typically owned by a Juristic Persons Group, which has a Thai majority and is registered with the government. A foreigner can own a condominium because the title deed is not tied to any land. Therefore, buying condominiums is a relatively straightforward and hassle-free alternative for foreigners. However, any given condominium block cannot exceed 49% foreign ownership. Should a block already reach 49%, a foreigner can still buy a condominium through opening a company that has a Thai majority (51%) ownership.

A foreigner may also own a condominium by signing a 30, 60 or 90 year leasehold agreement. Although the property remains under the Thai owner’s name, the foreign bears the right to buy, sell, trade and will the lease. Typically, foreigners seek the assistance of lawyers in the carrying out the procedures and filling out required paperwork.

The two most common ways in which foreigners can purchase land are:

Long-Term Leaseholds

Registered leaseholds are safe and fairly simple to put in place. Furthermore, a long-term leasehold can be arranged such that it is similar to freehold ownership. Under this form of rental agreement, the term typically consists of a period of 30 years, which can be renewed two more times resulting in a total of 90 years. In accordance with Thai Civil Law, the lessee is guaranteed ownership of any buildings which are built on the land that has been leased out to them. Hence, property is considered independent of the land which it sits on. Therefore, the lessor cannot take possession of any property when the lease reaches its expiration.

Limited Liability Company

The alternative to arranging a leasehold is setting up a Thai company through which you can legally purchase land. A foreigner is permitted to own 49% of the shares in any Thai company. The remaining shares must be owned by Thai nationals*, who you will appoint. Through a lawyer, you can arrange to have control of these shares signed over to you. Although the land will technically be owned by the company, you will retain voting rights for all shares and consequently have control over ownership of the land.

*In accordance with the Foreign Business Act (1999) it is illegal to appoint nominee Thai shareholders. Furthermore, the Thai government has recently started looking into the source of the money that is used by the Thai shareholders in the company to verify whether or not they are nominees.

As of 1999 as per ministerial regulations, Thai nationals married to foreigners are permitted to purchase land. However, the foreign spouse must sign a declaration stating that the finances used to purchase a freehold belonged solely to the Thai spouse prior to the marriage with no foreign claim to it

Typically, foreigners cannot obtain a loan from banks in Thailand. In order to obtain mortgage loans from a bank in Thailand, a foreigner must have a Thai partner willing to be the guarantor. However, this is also contingent on various factors. A foreigner will typically need to have substantial income in Thailand or abroad. Furthermore, it is advisable to have a reliable Thai partner. Purchase money must be transferred from banks abroad and must be in foreign currency. Additionally, the buyer must also state that the money will be used to purchase a condominium unit in Thailand under the Funds Transfer Document. A foreigner can then obtain the Authority to Purchase given that the bank issues the Thor Thor 3 (TT3) form

At present, the annual interest rate is 6-7% while the repayment period does not exceed 7 years. For the latest interest rates, refer to: Click Here

The purchasing procedure consists of the following:

  • Deposit – 10% is typically paid in order to secure agreements on selling/purchasing property. The remainder should be paid within 30 to 60 days of the date on which ownership is transferred. Furthermore, transaction expense must be paid to the Land Department. Longer periods can be arranged although this will typically require a larger deposit. In addition, note that deposits cannot be refunded.
  • Purchasing Contract – States the time limit under which ownership must be transferred between buyer and seller and buyer must pay the remaining balance to the seller. Both parties are subject to penalties should they fail to meet the agreement. For example, the buyer may not get back the deposit or the seller may have to refund the deposit.
  • Required Documents to Purchase a Condominium:
    • Buyer:
      • ID card if Thai citizen, certified copy of passport if foreigner.
  • Seller:
    • ID card if Thai citizen, certified copy of passport if foreigner.
    • Certified copy of title deed.
  • Both parties must keep a signed copy of the Purchasing Contract for reference. On the day of ownership transfer, a foreign buyer must go to the Land Department with the following:
    • TT3 (Thor Thor 3)/Authority to Purchase for the particular land office within the country.
    • Certified copy of passport.
    • Certified copy of marriage certificate (if any).
    • Letter of Consent from spouse (if any) in case either is not present at the ownership transfer.

* All of the above documents must be translated in Thai.

For all utilities such as electricity or telephone, the government or service provider sends the bill with not extra cost to the building. The only exception to this is water. In most cases, a tank is placed on the rooftop of a condominium building. Water is pumped to the tank and then distributed to each condominium. The electricity bill incurred by operating the pump falls on the condominium building. This is why the unit price for water in a condominium building is usually higher than for a private house. The unit price for water supply typically ranges from 16-25 baht/cu.m

The maintenance cost is contingent upon the size of the condominium. This varies across different condominium buildings. Regardless, it is calculated on a per square meter per month basis and paid for annually. Maintenance costs typically range from 25-50 baht/sq.m./month

While you may incur costs in minor reparations and repainting, the added value of having a clean, new looking property goes a long way in being able to set a more desirable price. Therefore, note that cleanliness and the look of a particular property are of great significance. One of the most challenging aspects of preparing a property for sale is determining a price that neither incurs a loss for the seller nor is too high for potential buyers. In this case, a seller can consult their agent to determine the selling price vis-à-vis the selling prices of other similar properties that have been sold recently

There are four types of visas issued to visitors/residents of Thailand.

  • Transit Visa–Typically issued to people arriving in Thailand without a visa and carries a validity of 14 days. While you are actually required to have an onward flight ticket, this visa is usually issued without one or much hassle. There are very few countries that do not require visas and will be issued a three-month entry stamp on arrival. However, this is limited as the countries that receive such treatment afford the same to Thai nationals.
  • Tourist Visa–Issued by an embassy outside of Thailand and normally carries a validity of 60 or 90 days. You may even apply for multiple tourist visas and use each consecutively.
  • Non-Immigrant Visa – Issued by an embassy outside of Thailand and carries a validity of one 90 day stay. The visa may be extended in Thailand for periods of up to one year at a time. There are several requirements to obtain a non-immigrant visa:
  1. You are employed, and therefore have a work permit, in Thailand.
  2. You have a Thai family.
  3. You are retired and have pension/other finances that are sufficient to support yourself.

Upon initially applying and subsequently renewing this visa, there is usually extensive form filling and submission of certified copies of pertinent documents. Note that this visa also grants a Re-Entry permit.

  • Resident Visa ­– This type of visa is a very rarely issued and difficult to obtain. They are issued on a highly selective basis. Some typical requirements are Thai literacy, strong financial standing and a few influential Thai references.

There are always taxes that need to be taken into account when property is bought and sold in Thailand.

Taxes on Purchases of Property:

  • Ownership Transfer Fee of 2% of the government appraised  value or selling price. However, this can vary in different cases. This must be paid to the Land Department Office.
  • Duty Stamps Fee of 0.5% of the government appraised value or selling price. Usually, the higher of the two will be applied. This also must be paid to the Land Department Office.
    • The requirements for the duty stamps fee are as follows:

– The seller has owned the property for a minimum of 5 years.

– The seller obtained the property as an inheritance.

– The seller has used the property as their primary residence for at least 1 year prior to the sale.

Specific Business Tax of 3.3% of the government appraised value or selling price. Usually, the higher of the two will be applied. This is applicable to all sales made by the company and any private sales within 5 years of the date of the purchase assuming that the seller has not used the property as their primary residence for at least 1 year prior to the sale.

  • Withholding Income Tax

1. Corporate Income Tax of 1% of the government appraised value or selling price. Usually, the higher of the two will be applied.

2.   For Private Sales, the applicable tax is calculated through a very complex formula that takes into account:

  • Assessed value of the property.
  • Length of ownership.
  • Personal income tax rate to be applied.

*Appraisals Price and Valuations – There are typically three appraisal values: the government value, which is calculated every 5 years, the appraisal company’s value and the market value of the property. However, these values tend to be quite similar and do not have great variance.

In order to apply for a work permit, you MUST first have a Non-Immigrant Visa. We assist qualified individuals in obtaining work permits at qualified employers through the following process:

  • Verifying your current Non-Immigrant Visa.
  • Preparing the Work Permit Application.
  • Preparing a Letter of Employment.
  • Putting together all pertinent documents.

Although we will assist you in the process of obtaining a Work Permit, there are a number of factors to take into consideration and they are as follows:

  • On BOTH the day the Work Permit application is submitted and collected, you MUST be present in Thailand.
  • The Visa Permit that you use to apply for a Work Permit MUST NOT EXPIRE while the application is processing.
  • Your Work Permit will expire on the same date as the Visa Permit that was used to obtain the former. Hence, if your Work Permit is issued using a 90-day entry permit, it will have a validity of ONLY 10 weeks. In most cases, you will need to use the initial Work Permit issued to you in order to apply for an Extended Entry Permit. Once the Extended Entry Permit is issued, you will need to apply for a renewed Work Permit which will have an expiration date that matches the new Entry Permit.
  • Make sure that your current Visa Permit is renewed at least 3 days before the expiry in order to prevent any delays in the renewal of the Work Permit.
  • Typically, the sponsoring company of a Work Permit MUST have a) 2 million baht in capital and b) at least 4 Thai employees. If these conditions are met, the process is usually straightforward.
  • Generally speaking, Work Permit holders must have a monthly salary of at least 50,000 Baht on top of which personal income tax is paid. This is as per government tax ruling.
  • In most cases, the Job Description submitted with the Work Permit Application must entail skills that a Thai does not typically posses. Otherwise, the Work Permit may not be issued. It is important to note that the Job Description is a critical factor in determining the approval or rejection of an application.
  • Once approved, the Work Permit allows you to work at the location and company specified in the application. Should you chose to change employers or location, you MUST submit a new application. Furthermore, in the event of resignation or termination, you MUST return your Work Permit to the Labor Department within 10 days. Most importantly, the employee is liable for returning the Work Permit, NOT the employer.
  • Because the Work Permit is tied to the Visa, it must be renewed when the latter expires. If you posses an unexpired Multiple-Entry Visa, all you need to do is go over the border and then return. If you need to leave Thailand in order to obtain a new Visa, you will need to provide the following documents to the Embassy/Consulate PRIOR TO Work Permit expiration:
    • Copies of your Work Permit.
    • Updated recommendation letter from the sponsoring company.
    • Relevant sponsoring company documents, i.e. registration, taxes and finances.

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