FAQs Coastal Real Estate Pattaya
Q: Can I own a house in Thailand?
A: Yes, you are able to own a house or structure in your own name. However, current Thai law prohibits foreigners from owning land in Thailand. The following are commonly used methods for investing in Thai real estate, all of which comply with existing Thai laws:
Invest in a Thai private limited company: This is the most common way for a foreigner to purchase land and house. This involves the incorporation of a private limited company of which the foreigner holds 49% of the shares. The remaining 51% of the shares are held by Thai Nationals. Thai law requires that 51% of the shares be held by Thai juristic persons, however, any company with more than 40% 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 being limited to 39%, but with the recommended changes to the Articles of Association, the foreigner can be the only director of the company, and the only officer of the company who can commit or bind the company in any contractual dealings, effectively giving the minority shareholder (foreigner) control over the company. The company is required to submit an annual balance sheet once per year, and there will be a tax obligation however the costs are minimal and your lawyer will have an accounting department able to assist you with the above.
Nominee with Lease:Register a 30 year lease with options, acquire the leasehold interest in land in the name of the foreigner,This can be done via a registered 30 year lease (residential) to the foreigner in the foreigner own name with pre-paid options to contractually renew for a further two periods of 30 year each. The foreigner may also be given the option to purchase the land should the law in respect of foreigners land ownership rights change. Under Thai law, the foreigner can own the structure (for example a house) erected on the land. In order to be enforceable, any lease for a period of longer than three years must be registered, which involves payment of a registration fee and stamp duty based on a percentage of the rental fee for the whole lease term. The original registered lease remains in force and effect even if the property is sold.
Nominee with Mortgage:You can use a Nominee to purchase the house/land and have a mortgage (registered with the appropriate land department office) on the property in your favor. However, in some circumstances the Thai courts have ruled that this was not a bona fide mortgage, but rather it was a mortgage contrived to circumvent the existing laws of Thailand prohibiting foreign ownership of land. It is important to note that only the owner of the land is entitled to mortgage the land; the lessee of land does not have the same privilege.
Ownership of land is governed by Land Code BE 247 (1954), the civil and Commercial Code, Land Reform for Agriculture Act BE 2518 (1975) and the regulations set forth by the Ministry of the Interior.
Q: Can I own a condo in Thailand?
A: Yes, foreigners can own condos. Buying a condo is the easiest option available to foreigners. Thai law requires a minimum of 51% of the internal area of a condo building excluding the common areas to be owned by Thais or Thai companies. The remaining units can be owned outright by foreigners. It’s important to remember; when a foreigner purchases a condo, the funds used must be remitted from abroad and correctly recorded as such by the receiving Thai Bank on a document called a Tor Tor Sam. Condo purchases by foreigners come under the jurisdiction of the Condominium Act B.E. 2535 (1992).
Q:What is a Tor Tor Sam?
A: A Tor Tor Sam is an official bank document issued by the receiving bank upon the receipt of foreign currency into your bank account in Thailand. You must request a Tor Tor Sam from your bank when you are remitting funds to Thailand for the purpose of purchasing a condo and the Tor Tor Sam must specify that the remittance is solely for the purpose of purchasing a property.
Q: Can my Thai wife own land?
A: Yes. Thai national’s married to foreigners have 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 and are beyond his claim.
Q: Are there taxes and costs payable when purchasing property in Thailand?
A: Yes, on all purchase / sale of property in Thailand there are taxes and fees based on the government’s value of the property or the declared value whichever is higher. The Land Register (transfer fee) is 2.0%. The Stamp Duty fee is 0.5%. The Specific Business Tax is 3.3% which is levied against an owner who has been in registered possession of the property less than 5 years. There is also a withholding tax of 1%. There is no Capital Gains Tax in Thailand. There are no set rules on who pays these fees and taxes, it’s just another part of the bargaining process.
Q:Can foreigners obtain a bank mortgage loan?
A: No, foreigners generally cannot obtain a bank mortgage for properties in Thailand, however, most of the financial institutions in Thailand provide loans for real estate purchasing to Thais and Thai companies. Private mortgages are available.
Q: Are there property taxes in Thailand?
A: No, there are no property taxes in Thailand that are exactly equivalent to the property taxes in the West. However, the most comparable taxes on properties in Thailand are the Land Tax and he 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, is collected by the municipal office or district office, and only applies to buildings used for commercial purposes.
Q: Can I have a bank account with a Thai bank?
A: Yes you can. We can advise you of the various local banks as well as the foreign banks that operate in Thailand. Opening an account is a relatively simple process. Internet banking is available from most of the local banks and we can help with setting up these accounts as well.
Q: Can I own and drive a car in Thailand?
A: Yes. It is easy for foreigners to own a car or motorcycle in Thailand. You will need the correct visa and an address in Thailand certified by the local immigration police. A foreigner can drive a car or motorcycle in Thailand using an international driving permit. However, for long term residents it is necessary to acquire a Thai driving license. This is automatically issued to those carrying an international driving permit; you are also required to have a proof of address (obtained from the local immigration police), a medical certificate and your passport along with recent passport photographs. If you do not have an international driving permit then you will require all of the above and have to take written and practical test.