Buy a Stunning Investment Property in Thailand
Located in the heart of Southeast Asia, Thailand is the cultural, spiritual, ecological and economic hub of the region. With spectacular temples, pristine beaches, breathtaking coral reefs, abundant flora and fauna, rich indigenous cultures, unique nightlife and internationally lauded cuisine, this vibrant kingdom has long attracted foreigners with a sense of adventure and a taste for the exotic.
Known affectionately as ‘the land of smiles’, Thailand’s population of 66 million are famous for their friendly personalities and extraordinary hospitality. No matter where you happen to travel, a sense of relaxation and wellbeing typifies the Thai way of life. A destination that never ceases to incite awe and wonder, there is something in this picturesque kingdom to suit everybody’s interests.
A land of contrast, you can go from a simple beachside hut on stilts to a life of luxury in a bustling Bangkok hotel in the blink of an eye. The diverse range of entertainment, travel, and sightseeing options available in this country is part of what keeps travelers returning. From traditional massage and sunbathing to golfing, big game fishing and jungle trekking, there are few countries in the world that can compete with the possibilities Thailand has to offer. From this perspective, choosing to buy an investment property in Thailand’s resort sector has a great deal of potential.
In addition to being a world class holiday destination, Thailand has much to offer in the way of permanent residency. With premium international schools and exemplary healthcare facilities, residential property is an equally astute investment.
Buying and owning residential or resort real estate as a foreigner
Foreigners can own investment real estate in Thailand under foreign freehold and leasehold ownership. Both these methods allow foreigners to own property in their own name or through a company incorporated in the UK, Hong Kong or British Virgin Islands in which the foreigner owns shares. These are the only two forms of investment methods that ALFA Investors endorses. Other methods may not be 100% within the legal boundaries of real estate investment in Thailand.
Freehold foreign ownership of investment real estate
Under Thai-law, foreigners can own up to 49 percent of the built area of a condominium property on a freehold foreign ownership basis. This enables you to own the property without needing Thai partners or shareholders to help you own the property. However, some developers charge a premium for these ‘foreign quota’ units. The remaining 51 percent of the properties must then be sold to Thai nationals or Thai entities (such as Thai limited companies). The transfer tax is currently 6.6 percent when transferring a freehold foreign ownership.
Foreigners can lease a condominium or villa for a registered lease term of 30 years with contractual options to renew the lease for multiple subsequent lease terms of 30 years each. This is normally extended by two to three term periods to give 90-120 years. A condominium building will be registered on completion in accordance with the laws of Thailand relating specifically to condominiums. Thai law provides foreigners who acquire units in a condominium with enhanced ownership rights and legal protections. As stated above, the current condominium law states that 49% of the registrable area of the condominium can be sold directly to foreigners. The remaining 51% of the registerable area of the condominium can be owned through leasehold. With villa developments, foreigners cannot own the land in their own name, a Thai limited company is set up to own the land and they can lease the villa which is on the land in the same format as above.
All funds used to purchase an investment property by a foreigner must be remitted to Thailand as foreign currency. A “Foreign Exchange Transaction Form” certificate must be obtained by foreigners for each payment from the beneficiary bank. These must be shown to the Land Department before the property can be registered. When the foreign funds are sent to Thailand, the purpose of the transfer (to buy a condo unit) needs to be stated in the transfer instructions.
Those with Thai baht in a non-resident bank account or has a Thai foreign currency bank account can withdraw money to pay for the real estate. Confirmation of the intent to use these funds to buy a property needs to be shown to the Land Department in the form of a withdrawal slip and a bank certificate.
These foreign ownership regulations also apply to foreigners with a Thai spouse. Foreigners with Permanent Residency status do not need to transfer funds from overseas. A member of ALFA Investors sales team will be available to guide you through this process.
The above is supplied by ALFA Investors for information only. We advise that you take legal advice from a Thai law firm and we would be happy to assist in recommending a reputable legal firm to you. There has never been a better time to invest in residential and resort property in Thailand. Contact us to learn more.