It is estimated that around 500,000 to one million expats live in Thailand legally. They come from different regions such as the United States, Europe, Australia, New Zealand, Singapore, China, Japan, Korea, Hong Kong, and Malaysia. Incidentally, while most expats choose to live on rent, a growing number is interested in buying property in this country.
Thai Laws That Govern Foreign Homebuyers
According to the 1979 Thai Condominium Act, people who are not citizens of the country may purchase units in condominiums and apartment complexes that have at least 51% local ownership. What this also means is that foreign ownership in a condominium or apartment complex cannot exceed 49%.
Foreigners have the option of leasing landed property, with the maximum lease period extending to 30 years. If acceptable by both parties, the lease may be renewed once, for an added period of 30 years. If you plan to buy a home in a new condominium project by using the foreign freehold land title method, expect to pay a noticeable premium.
Can Foreigners Buy Houses, Villas, or Land?
Foreigners who set up businesses in Thailand can buy land, houses, and villas. Another option is to invest at least THB 40 million in a Board of Investment approved project. This gives you the ability to buy up to 1,600 square meters of land. Purchasing property via proxy, either through a spouse or a partner, is also a route some foreigners take.
There have been instances of unscrupulous elements indulging in fraudulent property deals in Thailand, making it important that you examine a property’s title deed record through the Land Department. This will give you a clear indication of whether the seller is the rightful owner of a clear title that is not attached to any lien.
Fees Associated With Buying a Home
Most of the expenses that take place during the sale a home in Thailand are borne by sellers. Homebuyers typically have to pay legal fees that may vary from THB 20,000 to THB 30,000. The seller needs to pay real estate agent fees, stamp duty, withholding tax, and any applicable specific business tax.
Getting a Home Loan
Banks in Thailand started offering home loans to foreigners by the mid 2000s. However, expats who apply for home loans need to meet stringent eligibility criteria. The down payment you need to make may vary from 40% to 80% of the home’s value. The maximum loan term extended to foreigners tends to limit 10 years. Interest rates in Thailand are higher than in most western countries.
If you plan to make the down payment or any other payment from outside of Malaysia, you might be better off turning to a money transfer company instead of banks. This is because companies such TransferWise, FrontierPay, HiFX, OFX, and WorldRemit provide bank-beating exchange rates regularly, and they charge little to no transfer fees. With a large value transfer, this aspect may make a significant difference.
While regulations limit the options that foreigners have when it comes to buying homes in Thailand, you still get several alternatives from which to choose. What’s important is that you do not rush into the process and take time to do your groundwork.
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