If you’re an expat or tourist in Thailand, you may be wondering if buying a property is a good investment. Buying a house in Thailand could be a good investment there are risks to consider. Thailand is a popular destination for tourists and expats, and there is a growing demand for property, especially in popular tourist areas like Bangkok, Phuket, and Chiang Mai.
One of the advantages of investing in property in Thailand is that the Thai government has policies in place to encourage foreign investment. As a foreigner, you are allowed to own a condo in Thailand. The process for buying a condominium is relatively straightforward. However, if you want to buy a house or land, you might need to set up a Thai company or enter into a long-term lease agreement in Thailand. Usufruct rights are also popular in Thailand and there are others legal protections. A new right since 2019 is called Sap Ing Sith rights. We suggest you to consult a law firm with experience about real estate before signing any agreement.
Another advantage of buying a house in Thailand is the relatively low prices compared to other countries. You can find a wide range of properties, from budget-friendly condos to luxury villas, depending on your budget and preferences. It’s important to do your research and work with a reputable real estate agent to find the right property for you.
Thailand Property Prices
Thailand property prices vary depending on the location and type of property. In 2021, property prices in Bangkok range from around 80,000 THB per square meter for a condo in the suburbs to more than 300,000 THB per square meter for a luxury condo in prime areas like Sathorn and Sukhumvit. In popular tourist areas like Phuket and Chiang Mai, you can find condos for around 50,000 THB per square meter and luxury villas for several million dollars.
It’s important to note that property prices in Thailand are subject to fluctuation, so it’s important to do your research and invest wisely. Working with a reputable real estate agent can help you navigate the market and find a property that meets your budget and preferences.
Buying a house in Thailand
Buying property in Thailand as a foreigner is not straightforward and you will need guidance. As previously mentioned, foreigners can own a condominium, even a house, but normally they can’t own land. Since 2019 is it possible to acquire Sap Ing Sith rights that give you full ownership but only for a period of 30 years. We believe a renewal is possible so that would make 60 years but it is limited.
Before buying a property, it’s important to do your due diligence. Use real estate agency and lawyers that you trust and have a good reputation. Have an attorney review any legal documents before signing.
Taxes and and other fees
There are also various taxes and fees associated with buying property in Thailand, including transfer fees, stamp duty, and income tax. These costs can vary depending on the value of the property and other factors. Working with a real estate agent and attorney can help you budget for these costs and avoid any surprises.
It’s also important to consider the potential risks associated with property investment in Thailand. For example, property values can fluctuate, and there are no guarantees that you will be able to sell your property for a profit in the future. There are also legal and regulatory risks to consider, including changes to Thai property laws or restrictions on foreign ownership.
In conclusion, buying property in Thailand can be a good investment for expats and tourists, but it’s important to do your research and work with reputable professionals to minimize risk. With a wide range of properties available and government policies in place to encourage foreign investment, Thailand is an attractive destination for property investment.
Thailand is one the most beautiful places you can opt for after your retirement from your professional career, if you desire living a relaxed life. Properties are available in Thailand but before obtaining one for yourself, you must be conscious regarding several rules and guidelines of the land. Foreigners are normally forbidden to own Land in Thailand but there are ways to protect your asset should you wish to live here. Buying a house in Thailand is possible.
In Thailand, you will find a lot of ventures; especially real estate is something what everyone wants to go for. However, to own an asset for yourself in Thailand certain rules are put in front of you, and you have to abide by them.
Different ways to protect an real estate investment in Thailand.
1) Thai Limited Company
Since February 2023, 2008, only two shareholders are required to setup a Thai limited Company (It was 3 minimum before). Under the business Act, if your company has 50% or more foreign shares, it’s considered a foreign entity. In practice, this means your company will need more licenses and permits to operate and that could be expensive. You must also know that it’s forbidden in Thailand to use Thai people as “nominees” into your company. However, many Law firms in Thailand will offer to find you Thai people for your company.
The company route is more expensive: setting up a company will cost you money and you must do accounting every year. Many documents have to be filed. But it’s one of the only way to really own a property and be able to sell it should you wish. If you really want to do some business in Thailand and acquire a property, find yourself a reliable Thai partner and that solution can be a good option for you.
If you don’t have a Thai partner, most Law firms will ask the remaining Thai shareholders to sign documents, power of attorneys, or share transfer agreements and so that you can, as director of the company transfer it as you wish. But like we stated before, that is an illegal practice, even if commonly used in Thailand. Consult our section on Thai limited Company. Again, having a nominee into your company is illegal. But is it completely legal to setup a company with your Thai partner, maybe proving a loan to your partner and setting up what is called preferred shares so even if you do not have the majority of shares, you will own majority of votes. Good law firms can protect you.
2) Leasehold (or rental contract called “hire of property”)
Because many foreigners are afraid to use nominees, they can buy a house in Thailand under a leasehold structure. A lease agreement in Thailand is done for a maximum period of 30 years and a renewal option is possible.. A lease drafted properly is transmissible to your heirs. So, you will also have the choice to pass on your property to your successor.
Because a real estate investment normally involves large sums of money, it’s a good idea look for a reputation law firm. Think that your contract should be bilingual so you can understand what you sign. (English and Thai) and it should be explained to you. If your lease is only in Thai, you won’t know what you sign and you might have surprises one day. Options about heirs, renewals, future modifications about ownership laws can easily be added to your lease agreement. A good idea is to add superficies rights to a lease agreement especially is on an undeveloped land.
Building permit under a foreigner’s name
Another way to gran ownership of the house to a foreigner would be to rent the land and get a building permit on the name of the foreigner. The building permit will operate as an ownership document if you wish to sell the property in the future. Remember that some marital rules do apply if you are legally married.
3) Superficies
With these rights, the ‘superficiary’ owns the top of the land. Some Land Departments will refuse to register that right if constructions already exist on the land. Superficies are also transmissible to your heirs, just like a well drafted lease agreement.
4) Usufruct
A usufruct in Thailand is different from a lease but there are similarities. It is not limited to 30 years and can be given for your lifetime. It is often a very good idea for mixed couples that want to retired in Thailand. The foreigner will be protected by usufruct and the price to complete that step really not expensive. You should ask a law firm to draft a proper usufruct agreement as the forms given by the land department are not the best…Usufruct are rights that comes from Roman Law and are real rights, which is the best rights you can own on a property.
5) Loan and mortgage
Some clients choose to make loan agreement to a Thai, and protect their investment.They registered mortgage as collateral to guarantee the repayment of their loan, just like banks do. It is important to understand that there not a best way to protect your rights. Sure, fully owning a condominium is great. But for some people, they prefer buying a house, having some land, they being restricted to a condo.
6) Sap Ing Sith rights
We would like to refer you to this article to understand what are Sap Ing Sith. This could be the proper way for you to protect your investment.
Other considerations to think about when buying a property in Thailand
Before making any decision regarding your house , the first step you should take is to fix up a limited budget for yourself. Otherwise you will end up spending a lot of unnecessary expenses. The costs of material you will need to complete your house may vary from day to day.
Maintaining a budget will definitely help you.It is normally always more expensive than we imagined. If you see that your budget framework is not what it is supposed to be, then you may cut down some aspects. Budget should not be the factor that should oppose you from getting the comfort of your new house in Thailand. Take a wise decision according to what fits you before embarking upon buying a house in Thailand.
Do not sign any contract before having seen a reputable lawyers that speaks your language
Often, people buy a house, sign a contract and then see a lawyer after to protect their purchase. That is a mistake because the sale agreement is already signed. Law firms dealing with properties can easily verify your contract. They might even be able to negotiate with the builder, developer, or owner. But that should be done before any signatures. Professionals contracts will explain the quality of materials and the delays of construction. They will add warranties, permits and licenses and obligations of each parties. Remember that you must agree on many aspects, not only the price. Who will pay taxes and transfer fees? What about utilities? This should also be decided before any signature.
If a deposit is asked to reserve a plot or a property, try to make it refundable if you can’t agree later on terms of the final sale agreement. Conditions about payments will vary a lot from one developer to another. Don’t be afraid to “shop around” for your property and visit different developments. In cases where large amounts are involved, due diligence should be made. Due diligence is a kind of investigation about the property. You want to be sure that all documents, requirements, people involved won’t make any problems. A construction agreement can be separated from a sale agreement. Some developers in touristic areas will often use that method to lower taxes.
