Rules of buying a home in Thailand: easy guide to purchasing property for foreigners
Most of Landscope’s buyers from Hong Kong and mainland China are purchasing new, off-plan developments and the process is straightforward
Tim Skevington is managing director of Landscope (Thailand), an affiliate of Christie’s international Real Estate. Here, he advises foreigners about the benefits and pitfalls of buying property in Thailand.
What are the restrictions on foreigners buying and owning property in Thailand?
Foreigners can purchase up to 49 per cent of the condominium units in any freehold condominium in Thailand, but are not allowed to buy landed property outright. They are allowed to purchase leasehold landed property for up to 30 years. Some developers will offer a free extension for a further 30 years, or more, but 30 years is the most allowed under Thai law.
What are the buying and conveyancing procedures? Should I hire a local estate agent and lawyer to handle them for me?
Most of our buyers from Hong Kong and mainland China are buying new, off-plan developments and the purchasing procedure is straightforward. Once a condominium is chosen, the buyer is required to pay a booking fee of HK$20,000. The buyer will then usually have seven to 14 days to pay a 10 per cent deposit to the developer. A sales and purchase agreement is then sent to the buyer, usually within 30 days. This should be signed and another 10 per cent payment made, typically within 30 to 45 days of the booking fee having been paid. No further payments are due until the property is completed and the transfer of ownership is made by the developer at the Land Office. Buyers will not need a [lawyer] to assist unless they want an opinion on the sales and purchase agreement, as the entire process is managed by the developer and the selling agent. All payments must be made in HK dollars or US dollars to comply with Thailand’s foreign exchange rules. For second-hand purchases, the procedure is similar except the payment schedule may be shortened. Usually, a 10 per cent deposit is paid and held in escrow by the selling agent while a sales and purchase agreement is prepared. Most residential property buyers do not contract a lawyer in Thailand as the process can be managed by the selling agent for no additional fee. With a power of attorney, the agent can act on behalf of the buyer. Once the agreement is signed, a date for transfer at the Land Office is agreed and payment is handed over to the seller in front of a Land Office official, in return for an endorsed title deed.
As a foreigner can I get a mortgage to finance my purchase? How does it work in Thailand?
Mortgages for foreigners buying Thai property are available from international banks such as ICBC, Bank of China and UOB. As funds need to come from abroad, these banks administer mortgages from branches in Singapore, although applications are made in Bangkok. Loans are usually offered in Singapore dollars or US dollars for 10 to 20 years and loan-to-value rates of up to 70 per cent. Interest rates are around 6 per cent. Applications should be made one to two months before drawdown and all banks have clear qualification requirements available online or from our offices in Hong Kong or Bangkok. Loan repayments can be made in Thai baht via the bank’s office in Thailand.
If I am buying a condo from a developer, is there legal protection for me if the developer goes bust?
Nearly all developers in Bangkok selling to overseas investors are publicly listed companies with track records and healthy bank balances. Some are allied with large Japanese real estate companies, such as Mitsui or Mitsubishi, and in the years we have been selling Bangkok property overseas, we have not come across one developer who failed to deliver on terms in the sales and purchase agreement.
Can I buy Thai property to qualify for a
Towards the end of 2016, the government brought in a renewable 10-year retirement visa available to foreigners over 50 who wished to settle in Thailand. Previously, only a one-year visa was offered, which had to be renewed [annually]. We have experienced greater interest from foreigners in property they can buy and rent out now, and live in when they retire. To get a 10-year visa requires a minimum regular income or a deposit of the equivalent of HK$650,000 held in a Thai bank account for at least one year after the visa is issued. Applicants need health insurance. It is not possible to include a property purchase in exchange for the deposit requirements for the visa.