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Frequently asked questions when buying property in Pattaya

Mostly asked questions for Property Laws in Thailand

Below are the most commonly asked questions, we received from our customers about property and the answers.

Please contact us, if you cannot find an answer to your particular question.

  1. Can I own a condominium in Thailand?
  2. Can I own a house and land in Thailand?
  3. My wife is a Thai national, can she own land in Thailand?
  4. Do they have land title deeds in Thailand?
  5. What is a ``Thor Tor Sarm``
  6. Can foreigners obtain a mortgage in Thailand?
  7. What taxes and costs are to pay when purchasing property in Pattaya, Thailand?
  8. What costs (electric, water etc.) are to pay after purchasing property in Pattaya, Thailand?
  9. Are there wealth taxes in Thailand?
  10. Service- & maintenance charges for condominiums?
  11. Units of land measurement

1. Can I own a condominium in Thailand?

Buying a condominium is perhaps the simplest and easiest option available to foreigners. Purchases of condominiums by foreign individuals come under the jurisdiction of the Condominium Act B.E. 2535 (1992).

Condominiums can be owned by foreigners in their own names provided that the total number of foreign owned units does not exceed 49% of the total number of units in the condominium building.

The funds to purchase the condominium must be remitted from abroad in foreign currency to a bank in Thai-land, (in the name that is to be registered on the title deed), with the remark 'to purchase a condominium', and then the relevant form "Thor Tor Sam (3)" can be obtained from the said named bank.

The owner of each condominium receives a ownership certificate for his unit. The certificate also startes exactly what percentage of rights over the common areas of the building each owner has.

2. Can I own a house and land in Thailand?

Ownership of land is governed by the Land Code BE 2497 (1954), the Civil and Commercial Code, Land Re-form for Agriculture Act BE 2518 (1975) and the regulations set forth by the Ministry of the Interior.

You are able to own a house or a structure in your own name, but the Thai Law prohibits foreigners from owning the land the building is erected on.

However there are a number of ways in which you can invest in land and control any dealings with this land. Under some very restrictive condition you may even own land.:

  • Become a Thai citizen
  • Be the principal investor in a export orientated Board of Investment (BOI) approved company. The current maximum size limit of freehold ownership rights is one rai of land (1'600 sq m).
  • Make an approved investment of over 40 million Baht left for a (to be fixed) minimum number of years. The current maximum size limit of freehold ownership rights is one RAI of land (1'600 sq m).
  • Invest in a Thai private Limited Company. This involves the incorporation or the buying of a private Limited Company of which the foreigner can hold up to 49% of the shares. The remaining 51% of the shares must be held by Thai nationals.
    In practice, this method is the most commonly used by foreigners, to invest in a Thai private Limited Company which owns or intends to acquire land. The Articles of Association can be worded to allow the foreign minority shareholder effective control over any dealings with land despite the majority Thai owner ship required under the Thai Alien Business Law. By doing this, the foreigner still is not the legal owner of the land, but his investment is fully protected and therefore safe.
    Thai law requires that 51% of the shares are held by Thai natural persons. However, any company with more than 40% of foreign interest that purchases land may be investigated by the Central Land Office in Bangkok (under Section 74 of the Land Code) to ensure that the company has not been organized in an attempt to circumvent the prohibition against foreign ownership of land. This results in the foreign ownership of the company kept at 39% only. With the above changes to the Articles of Association, the foreigner can be the only director of the company. He is therefore the only officer of the company who can legally commit or bind the company. This gives the minority shareholder the effective control over the company. The company is required to submit an annual balance sheet and there will be a very modest tax obligation. Many law- and accounting offices will take over this task at a relative small fee.
  • Lease the land for 30 years in your name
    This is done by registering a 30 year lease contract (residential) to the foreigner in the foreigner`s own name. There is also the possibility of a prepaid option to contractually renew the lease for further periods of twice 30 years. The foreigner may also receive the option to purchase the land should the law in Thailand respect of foreigner`s land ownership rights will change. Under Thai law, the foreigner is the owner of any structure (for example a house) which he has erected on the land. To make this legally binding, a lease for a period of over three years has to be registered. This involves payment of a registration fee and stamp duty based on a percentage of the rental fee for the whole lease term. Such a registered lease remains in force even if the property is sold.

3. My wife is a Thai national, can she own land in Thailand?

Prior to 1998, any Thai woman who married a foreigner would lose her right to purchase land in Thailand. She could, however, still retain land that she owned prior to marrying the foreigner. The new (1999) Ministerial regulation now allows Thai national`s married to foreigners the right to purchase land, but the Thai spouse must prove that the money used in the purchase of freehold land is legally solely theirs with no foreign claim to it. This is usually achieved by the foreign spouse signing a declaration stating that the funds used for the purchase of property belonged to the Thai spouse prior to the marriage or have been given as a gift and is beyond his claim. This is a final and, in any case, remains also valid should the marriage be divorced.


4. Do they have land title deeds in Thailand?

Yes, they are called "Chanot", legally "Nor Sor 4 Jot", and this is the only document which can be described a land title deed because it alone confirms ownership of land. The land is exactly measured, and its area and boundaries are set, today using GPS.

For areas which are not (yet) surveyed, there are other documents, proofing the right to utilize the land or other interests in the land. These documents are called ``Nor Sor Sarm (3)`` and ``Nor Sor Sarm (3) Kor``. Unlike the Title Deeds, these "Nor Sor" documents are issued to show the possessors' exploitation rights for the land. Though these documents do not provide ownership rights, as do Title deeds, they can still be registered for transfer of the land for which they are issued. A buyer's investment is fully protected by these documents.

5. What is a "Thor Tor Sarm"

The "Thor Tor Sam" is an official bank document issued by the receiving bank upon the receipt of foreign cur-rency into the bank account in Thailand. You can only request a "Thor Tor Sam" from the bank, when you are remitting funds to Thailand with the remark "for the purpose of purchasing a property", and the "Thor Tor Sam" must specify, that the remittance is solely for the purpose of purchasing a property - Code 5.22.

6. Can foreigners obtain a mortgage in Thailand?

Until recently banks did generally not give mortgages for property to foreigners. This is slowly changing now, but the interest rates, compared with Europe, are rather high. However, most of the financial institutions in Thailand provide loans for real estate purchasing to Thais and Thai companies.

After the down payment has been paid, the sales contract will be made and the balance amount is paid through the loan signed with the financial institute. The financial institute requires the property to be pledged as collateral for the loan.

It is common for a real estate developer, to arrange for his customers to have a financing package from a fi-nancial institute. In most real estate development projects a down payment can be made, and the remaining amount can be paid by installments from 10 to 48 months.

7. What taxes and costs are to pay when purchasing property in Pattaya, Thailand?

Whenever a property in Thailand is bought and sold, there are four taxes to be taken into account:

  1. Land registration (transfer fee) of 2.0% of the assessed value of the land.
  2. Stamp duty/fee of 0.5% of the assessed value or the sales price - whichever is higher.
  3. Specific business tax of 3.3% of the assessed value or the sales price - whichever is higher. This will
    be applied to all sales by companies and to any private sales that occur within 5 years of the date of purchase.
  4. Income tax - this is calculated on a very complex formula based on the assessed value of the property, the length of time owned and the applicable personal income tax rate. In practice, this will work out to below 2% of the price for low to medium value properties, and up to 3% for higher value properties. The local system of taxing property is based on an arbitrary assessed value as determined by the local Land Department, rather than a true market value price. There are no set rules as to who pays for which taxes, and it is just another part of the bargaining process for purchasing property in Thailand.

8.What costs (electric, water etc.) are to pay after purchasing property in Thailand?

The costs for water consumption are very low in Thailand, compared with other countries, for example in Europe or the USA, not so the costs for energy. Special taxes normally were not to be paid, the tax for the pur-chase of land are so low, that the offices, to collect them, are not - or not willing - to do so.

In case, that the property is bought in the name of a company (Co. Ltd.), which will be often in case of pur-chasing a house, the company has to make a yearly balance. Within this balance there are normally also to pay some tax, additional to the costs for making the balance. For more detailed information ask a law office, please.

9. Are there wealth taxes in Thailand?

There are no wealth taxes in Thailand, which are exactly equivalent to the wealth taxes in European countries. The most comparable taxes are on properties i.e. the Land Tax and the Structures Usage Tax. The Land Tax levied on land is so miniscule, that in practice the body charged to collect it, rarely bothers to do so, and if they do, they usually wait several years until the amount accumulates. The Structures Usage Tax relates to buildings, is collected by the municipal office or district office, and is only applied to properties used for commercial purpose.

10.Service- & maintenance charges for condominiums in Thailand?

Service and maintenance charges here in Thailand are extremely low, even to maintain common areas of the buildings, i.e. lifts, pools and corridors. A small monthly or yearly amount is paid into a fund that covers any major repairs and maintenance to the common areas. Therefore, if you have purchased your condo once, there are no hidden costs.

11. Units of land measurement

Land is measured in RAI - Ngan - Tarang Wah (Wah²):

1 Rai= 4 Ngan = 400 Wah²
1 Rai = 1`600 square meters
1 Rai = 0.40 Acre (approx.)
1 Ngan = 100 Wah²
1 Ngan = 400 square meters
1 Tarang Wah = 4 square meters
1 Tarang Wah = 43 Feet2 (approx.)

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