Doctor – Property considers itself a responsible and reputable real estate agent. We do not wish to withhold information from you nor invent things just so that we can make sales. We are bound by our quality standards, and would therefore like to point out the risks of purchasing a property in Thailand.
In Thailand, real estate purchasing unfortunately works slightly differently than in Europe. We would like to give you some information in advance so that you have the best possible start for your new dream home, land or apartment. However, this information should not be considered to contain legally binding statements. For this, we recommend that you enlist the services of a good local lawyer. If you wish, we can recommend lawyers who specialise in this subject.
First of all, any foreign national wishing to purchase property in Thailand should be aware that Thai case law and local laws are not designed to provide any benefits to foreign nationals. This has unfortunately been seen on numerous occasions in the past. You should always seek assistance from a lawyer in order to provide you with the greatest possible legal certainty.
Many interested parties will find themselves firstly asking the question:
Can a foreign national ever purchase land?
Unfortunately, this question has to be answered with a no. However, there are various ways that the right to use the land can be secured by building a house.
Option 1: The purchase must be made by a Thai citizen. With this native citizen you can then conclude a leasehold for 30 years, with the option of a further extension of 30 years. )
Option 2: Just as in the above variant, a Thai citizen buys the land and instead of a leasehold, a usufruct is now recorded in the land registry. This includes the lifelong right to live in the house or apartment and use the land for this purpose.
Option 3: You become a Thai citizen yourself.
Option 4: Establish or invest in a Thai limited company in order to purchase your real estate. You are only able to purchase 49 percent. The remaining 51 percent must, once more, be held by a Thai citizen. However, the government “Central Land Office” in Bangkok closely monitors foreign citizens holding shares of 40 percent and upwards in order to check that the company was not founded solely for this purpose. To bypass this, shares are often lowered to 39 percent, but the articles of association of the limited company are chosen so that the foreign minority shareholder is appointed as the sole director and only he is able to sign binding contracts. This then gives you control over the company, and is the most commonly used option. However, we also strongly advise that you enlist the services of a lawyer in this case.
Option 5: You invest over 40 million baht in Thailand, and the government (Board of Investment) will allow you to buy land up to a size of 1 rai (1,600 m2) for residential purposes.
Can a foreign national purchase condominiums?
This is the most straightforward available option. In this case, the purchase falls within the jurisdiction of the Condominium Act B.E. 2535. Here the rule is also that foreign nationals may only own up to 49 percent of the total apartment units. If you fall below this mark, you can therefore be the sole owner of your apartment unit.
What taxes are incurred when purchasing real estate?
- Land registration: Also called transfer fees. This is 2 percent of the value.
- Stamp duty: 0.5 percent of the sale price must be paid.
- VAT: 3.3 percent of the sale price must be paid.
- Income Tax: This tax is very individually based. Personal income structure must also be taken into account here. As an estimate, you can expect an amount of 2% for low to medium priced properties, and 3 percent for high-priced real estate.
- Property taxes are not charged