Вопросы и ответы

Yes, any foreigner can acquire real estate as a property, this right is enshrined at the legislative level. Clause 19 of the Condominiums Act of 1979 states: “Any foreign citizen has the right to take ownership of an apartment.” It is mandatory to register real estate in Freehold. Freehold is a 100% property right that allows you to own, use and dispose of real estate. The owner has the right to transfer the property as an inheritance, donate or sell. The rights to real estate are confirmed by a special document called Chanot (an analogue of the Russian certificate of ownership), which indicates the name and surname of the owner. This document is presented in two copies: one is issued to the owner in the hands, the second is stored in the Land Department - a government agency that has the right to register real estate transactions.

Freehold is a 100% property right that allows you to own, use and dispose of real estate. The owner has the right to transfer the property as an inheritance, donate or sell.

The rights to real estate are confirmed by a special document called Chanot (an analogue of the Russian certificate of ownership), which indicates the name and surname of the owner. This document is presented in two copies: one is issued to the owner in the hands, the second is stored in the Land Department - a government agency that has the right to register real estate transactions.

Freehold can be divided into 2 types: for foreigners and Thai companies or individuals. A foreigner has the opportunity to register real estate in both ways. In the first case, the name and surname of the buyer will be indicated in the Chanote. In the second case, the name of the company is indicated, the owner and director of which is a foreigner.

You need to understand that the company must be opened in Thailand. If you purchase an apartment or house from a developer at the construction stage (in the primary market), then he takes over the procedure for opening your company. If the transaction is made on the secondary market, then, as a rule, the company is transferred to the new owner along with the property.

Leasehold is a long term lease. This method of registration of real estate is not property, as it does not imply the right to dispose of it. When registering an apartment or house in Leasehold, you have the right to use and own it under the lease agreement. The developer company legally remains the owner of the property. The lease agreement is drawn up for a period of not more than 30 years and is recorded in the Land Department of Thailand. After this period, an extension is required with the participation and consent of both parties. The buyer of real estate registered in Leasehold is not protected by law, and has the right to act limited by the contract. For example, you do not have the right to vote at general meetings of condominium co-owners.

For booking you need to provide a copy of your international passport, address of actual residence, contact phone number and e-mail. Based on these data, a reservation form and an invoice (payment request) for the payment of the deposit are drawn up. After receiving confirmation of the receipt of funds for the object, the developer prepares the main purchase contract, where it transfers the data that you provided for the reservation.

The developer, in turn, also provides a number of documents: DBD - company registration document, company owner's passport, Chanot on land. I would like to draw your attention to the fact that there is a practice when the contract is not signed by the owner of the company. In this case, the power of attorney and the passport of the trustee must be attached to the contract. If the purchase is made remotely, the preliminary signing of the contract takes place electronically. Further, all documents are sent by courier mail to the address you specified.

Initially, a tripartite contract is drawn up - the seller, the buyer and the real estate agency. The agency acts as a guarantor of the transaction and a depository.

To draw up a contract, the buyer needs - a foreign passport, address of actual residence, telephone and e-mail, the seller provides similar documents and a Chanot (certificate of ownership), the real estate agency attaches DBD - a document on company registration in the Kingdom of Thailand, the company owner's passport.

To carry out the transaction, you must provide a certificate from the Management Company about the property quota. Also make sure that there are no outstanding annual maintenance, water and electricity bills. If the transaction is executed in Freehold for a foreign name, a TT3 certificate (Tor Tor 3, Foreigner Exchange Transaction Form) will be required. This document confirms that the transfer came from abroad in foreign currency and was legally converted into Thai baht. After paying taxes at the Land Department, you will receive confirmation, which is also required by the registrar to complete the purchase and sale transaction.

1. DBD - уставные документы компании-застройщика. Очень важно обращать внимание на размер уставного капитала. Он должен соответствовать стоимости проекта, или минимум - стоимости земельного участка.
2. Паспорт собственника компании-застройщика, указанного в DBD.
3. Чанот на землю. Компания-застройщик должна быть собственником земли, без каких-либо обременений. Данный документ в обязательном порядке прикладывается к контракту на покупку недвижимости.
4. EIA - по своей сути является экологической оценкой значимости как потенциально положительных, так и отрицательных последствий строительства проекта на окружающую среду. Без данного разрешения строительство невозможно.
5. Разрешение на строительство - административный ордер, получаемый на строительство конкретного здания. Примечательно, что данный документ имеет ограничение по времени в зависимости от площади застройки. Отсюда делаем вывод, что застройщик обязан предоставить действующее разрешение на строительство.

Хочу обратить внимание, что существует практика, когда контракт подписывает не сам владелец компании-застройщика, а от его имени и по поручению доверенные лица. В данном случае прикладываются доверенность и документ удостоверяющий доверенное лицо.

Tax on the purchase of real estate in Thailand is paid upon registration of the transaction in the Land Department. Moreover, the size will depend on the method of registration of real estate - Freehold or Leasehold.

The full tax rate when registering real estate as a property (Freehold) is 6.8%. This tax is compound. Below are all the fees included in this tax when buying a property on the primary market from a developer:

1. Transfer Fee - a mandatory fee paid for the services of registering the transfer of ownership of real estate in the Land Department. The fee is 2%.
2. Special Business Tax (SBT) - An indirect tax imposed on a number of VAT-exempt activities, including the sale of real estate. 3.3% - paid by the developer.
3. Duty Stamp - The tax established on tools - drawing up legal documents when registering a transaction. 0.5% - paid by the developer.
4. Withholding Tax - Income tax (income of an individual) withheld by the payer under the transaction. 1% - paid by the developer.

If the transaction takes place on the secondary market, then the parties agree on payment of 6.3% under the contract of sale. By the way, if the owner has owned the property for more than 5 years, then a special tax of 3.3% is not paid.
The tax on the purchase of real estate registered in Leasehold is 1.1%:

1. Transfer Fee - a mandatory fee paid for the services of registering the transfer of ownership of real estate in the Land Department. The fee is 1%.
2. Duty Stamp - The tax established on tools - drawing up legal documents when registering a transaction. The fee is 0.1%.

In 2020, an annual tax on property ownership was introduced. However, in the last 2 years, due to the pandemic, the rate of the new tax on land and buildings has been reduced by 90%. Below are standard rates without discounts.
The tax rate depends on the value of the property and its purpose. For real estate intended for one's own residence, the tax is charged in the amount of 0.02% to 0.1% (depending on the cadastral value of the property).
Real estate worth up to 10 million baht is not taxed, the name of the owner must be entered in the house book.
If the property is rented out, that is, used for commercial purposes, the tax rate will be from 0.3% to 0.7%.
If a company is the owner in Chanot, this property is considered for commercial purposes in any case.
If the property is rented out on a monthly basis, then the tax on it is calculated at a rate of 0.02% as for residential property.
If the property is rented out on a daily basis, then it is considered commercial and the tax rate is applied as for commercial real estate from 0.3%.

The purchase of real estate in Thailand in the primary market is concluded by signing a contract of sale. This document must meet certain conditions and laws: "On Condominiums" 1979 as amended in 2008, The standard form of the contract (agreement) for the sale of an apartment in a condominium No. OS 22, approved by the Ministry of the Interior of Thailand in 2008.
The most important thing to know about them, according to article 6/2 of the law "on condominiums" - all contracts between buyers and developers must be drawn up in accordance with a standard form that has been approved by the Ministry. Clauses of the contract that go beyond the standard contract, establish less favorable conditions for the buyer, when compared with the standard form, are not legally binding and entail the liability of the developer company for violation of article 6/2, which provides for a fine of up to 100 thousand baht if the buyer defends their rights through the courts.
Read more in the article.

Guaranteed rent is the amount of your income fixed in the contract for a certain period of time. As a rule, it is a percentage of the cost of the apartment. The rent is paid to your Thai account with the frequency specified in the contract. On the one hand, this is very convenient, since all obligations are known in advance, on the other hand, if the property has earned many times more, then the owner cannot claim an additional payment.
In fact, the owner transfers his property to the management of the hotel group or management company. You can live in the apartment for only 14-30 days depending on the desired month. The management company rents out real estate at a high price, pays the owner the percentage fixed by the contract, and keeps all the funds received in excess of this.

Rental Pool is the actual income from the rental of real estate, which is divided in the proportion established by the contract with the management company. The management company combines several apartments of the same category into a pool. Under this program, the owner of the apartment receives income to the Thai account from the actual rent, and not a fixed amount, as with a guaranteed income.

There are 2 ways to share income. The main difference is who pays the costs of marketing and management under the contract.

• Profit sharing
• Revenue Sharing

Read more in the article.

In addition to the cost of real estate, the buyer pays:

• Registration tax
• Depreciation fee
• Electricity and water meters
• Annual service
• Annual property tax

Possible surcharges for:

• Freehold
• Furniture package

Full description and size can be found in the article.

Bank transfer

The most optimal payment method. With a purchase agreement and an invoice (payment request) in hand, you can make an international transfer from anywhere in the world. Within 1-3 business days, the amount will be credited to the specified account in Thailand. If you purchase property from a developer, then the invoice will contain its details. After the receipt of funds, the buyer is sent a bank statement (credit advice), a receipt - confirmation check and the final balance. 

Important! When buying real estate in Freehold, that is, in the property in the name of a foreigner, it is mandatory to transfer money only by bank payment, since in order to register ownership in the Land Department, you need to provide confirmation that the amount came from abroad (Tor Tor 3). 

Cash

As a rule, only part of the payment is paid in cash - a deposit, since you will not receive other documents other than confirmation from the seller. It is also possible to pay her the full price if you plan to register the property with a Thai company (Thai quota). You need to remember that you can only bring $ 10,000 per person into the country without declaring. 

Bank card 

A convenient way to deposit small amounts at the developer's office, if a terminal is installed there. However, for card payments, you may be asked to charge 3% extra. 

Cryptocurrency 

The purchase of real estate for cryptocurrency is legalized in Thailand at the legislative level. Blockchain technology has already been implemented in both the public and private sectors. At the moment, there are two licensed crypto exchanges in Thailand: Bitkub and Satang Pro, as well as an approved broker - Coins Th Co. Ltd. Many developers offer to pay for the purchase of real estate with cryptocurrency. 

Despite the market volatility, this is a very convenient and fast way to transfer funds. You can choose the most comfortable payment method for you, depending on the transfer amount and the type of real estate registration. We, in turn, will advise you on all the various legal nuances of payment.

Self-management can bring good profits if you live permanently on the island, are ready to 100% invest in the process and treat it as a full-time job. Renting through a real estate agency is convenient for those owners who often use their apartment or villa for personal living, but at the same time want to earn income in their absence, and be sure that the property is under supervision. For those who buy property for the purpose of income and do not plan to use it for independent living, the best option would be to consider projects with hotel management.

Read more about the pros and cons of each method in the article.

When purchasing real estate in your home country, you understand the laws, documentation, and the market. At any time, you can personally come to resolve the issue. And even there, buyers resort to the help of an agency, as it helps to save time and money. And if we are talking about buying abroad, then you can’t do without a market specialist. In addition, in Thailand, the services of a real estate agency for the buyer are free.

What the buyer gets:

1. Real estate market consultation
2. Development of an investment strategy for your goals and deadlines
3. Property selection
4. Negotiation of purchase terms
5. After sales service
6. Assistance in accepting real estate and obtaining property documents.

A real estate agent will save you time and money, his services are absolutely free. Trust a professional and then buying abroad will be a pleasant and profitable process.