Real Estate In Thailand
Finding Real Estate In Thailand
If you are looking to lease or purchase real estate in Thailand, there are some things you should consider.
Distance. A downside to this tropical destination is the distance from North America. The majority of flights have at least one stop, and it will take you more than 18 hours to cross the Pacific. If you plan on still living in North America and traveling to see your property, it can be troublesome.
Politics. Politics is the wild card when buying property in Bangkok. Thailand has the dubious distinction of having more coup d’états than any other country in the world. Whether Thailand is ruled by an unelected military junta or a democratically elected government, large protests have resulted in the closing of airports, traffic disruption, and martial law in the recent past. However, it’s important to note that civil unrest does not affected every part of Bangkok or the country as a whole. And protests are directed toward other Thais, never toward foreigners. During these times, day-by-day life around the country continues much as it always does, regardless of what may be happening elsewhere. Avoiding large gatherings of protestors is the easiest way to stay out of trouble.
Leasing Property. Foreigners can apply for a 30-year renewable lease with an option to renew in 30-year periods, but these leases cannot be registered and sale of the property by the current owner who signed the lease could nullify the lease.
Ownership restrictions. It is important to know the ownership restrictions and requirements before getting involved in and Thai property purchase.
Owning Property in Thailand
In Thailand, “ownership” is a little more literal than in the United States.
Here are the rules for owning property in Thailand:
- Foreigners are barred from having their name on the title to land.
- We are also forbidden to own more than 49% of a condominium building.
- Financing is almost non-existent. Recently more developers and some private owners are offering financing options, but they are almost entirely of the big down payment/short duration variety.
One obstacle for some is the fact that foreign ownership of property is restricted in Thailand. Thailand places restrictions on foreign ownership and property similar to those in the Philippines, except in this country foreigners can own up to 49% of a condo building. Foreigners can, however, own a condominium in Thailand and your name is on the legal title deed.
If a condo is not for foreign ownership, the buyer can form a Thai company that he/she controls to purchase the property. Many people set up with nominee Thai shareholders. Not only do you own a majority of shares, you own proxies for all the nominee votes. For somewhere around 50,000 Thai baht you get a company and all the paperwork. The company, with you as director, buys the condo and holds the title deed.
The downside is that you have to pay around 15,000 baht per year to file your corporate taxes and maintain your company. The upside is that you can transfer the company and the condo, directly to another foreigner. In this way, you avoid taxes from a property transfer. In other words, someone buys your company with the condo as the only asset. It’s easy, convenient and we’ve never heard of any government agency having a problem with it.
Foreigners cannot own land in Thailand. Companies can own land. Foreigners can invest a minimum of US$1 million (more or less, depending on the exchange rate) in a Board of Investment-approved project and under such can purchase 1,600 square meters of land. Some foreigners opt to own 49% of a property with 51% being owned by a trusted Thai native. We don’t recommend this.
When visiting potential properties, it is important to ask if the title is for foreign quota or not. Properties with foreign ownership approved are generally priced 15% higher than those that are not.
With property in Thailand, you can own it or you can control a company that owns it; you can lease it virtually forever, you can sell it, rent it, and live in it. And, since financing other than from the seller or developer is unlikely, you will have paid in full and have your hands on the title deed.
To be sure, property ownership in Thailand is not the same as in the United States.
We recommend you buy the house you can afford and leave the banker out.
Thailand Real Estate for Expats
Overview of the Real Estate Market in Thailand
For millions of people all over the world, Thailand is already famous as a tourist destination. Gorgeous beaches, tropical forests and unique historical centers bring droves of visitors to the kingdom every year: In 2015 alone there were almost 30 million arrivals. Yet for overseas investors and expatriates living there long-term, the country has another exciting feature: its growing real estate market.
Expats considering Thai real estate and a home in Thailand usually fall into two main categories. First are foreigners who have relocated permanently to the country. Historically, this has included many Americans and Europeans, although rising incomes in China and India have also made overseas real estate attractive options for the citizens of those countries. The second group are those who live part-time in Thailand and commute to employment in other parts of Asia, such as Hong Kong.
Whether you are interested in a place to live while you work elsewhere in the region, a vacation home or a beautiful piece of beachfront real estate in Thailand for your retirement, you will find many compelling options in several of the country’s diverse regions.
Options for Expats
Before you buy real estate in Thailand, it pays to also be aware of the rental options. Houses, apartments, and condominiums are available throughout the country. In particular, there are many modern condos with all the amenities like pools, security, and recreation centers. Monthly rent for all types of buildings is often significantly lower than in major American cities. Even in the most popular Thai destinations, average rental costs may be less than half of what you might expect to pay stateside. Fees and amenities are sometimes included in the costs of rental and sometimes they are not; be sure to check with your landlord ahead of time.
Compared to renting, purchasing real estate in Thailand is somewhat more complex for expats. Under Thai law, foreigners can own all kinds of buildings, but they are not able to own the land itself. However, various arrangements are available to permit foreigners to live and invest in the country despite these restrictions on land ownership. One common practice is to enter into a long-term (usually 30-year) lease on the land when you buy the home or building. If you own a business in Thailand, it is possible to purchase land through your company, although the government no longer allows forming a company solely for this purpose.
Whether you are interested in renting or buying, it also makes sense to get advice from an attorney or another expert in Thai real estate. There are a number of possible arrangements for foreigners who want to purchase real estate, so it pays to find someone who can help you navigate any legal complexities or tax issues before you make a purchase.
Regions of Interest
If you have made the decision to acquire real estate in Thailand, you probably already know that the country boasts a diverse array of ecologically and culturally distinct regions. However, each of these also offers a variety of real estate options for expat buyers. From the mountainous northern areas to the famous coastal resorts of the south, there is something for every taste and at many different price points.
Founded in 1296, Chiang Mai is the largest city in northern Thailand and capital of Chiang Mai province. Chiang Mai has a population of just under 150,000 and is well known for both its classic Buddhist architecture and the many stunning nature preserves in the mountains that surround the city. Truly representative of traditional Thailand, the city also offers the best in dining, nightlife, and modern real estate options.
With prices significantly more affordable than those in the more famous coastal cities, real estate in Chiang Mai has become more and more popular with expat buyers in recent years. Retirees, in particular, have moved to the area, thanks to the availability of spacious and affordable single-family homes. Developments on the city’s outskirts are especially popular, and condo buyers will find many up-to-date options in the rising Nimmanhaeman district. Typical prices in Chiang Mai for larger homes range from $60,000 to $185,000.
The island of Phuket on the far south-western coast of the country is definitely one of Thailand’s top destination for expatriates. With its crystal clear waters and rainforest scenery, Phuket is one of the most beautiful areas of in South Asia. Phuket’s economy is largely dependent on tourism, and it should be at the top of your list if you love the beachfront, resort lifestyle.
While the island’s west coast was previously the preferred area for expats in the market for real estate in Phuket, many now also look to the south and east coasts. Two or three bedroom homes in new developments are one of the most popular options, and their prices typically range between $200,000 and $500,000. The oceanside, Thai-style villa is Phuket’s most iconic real estate offering: Many of the island’s stunning upscale constructions can cost well over $1 million dollars.
Around 150 miles away from Bangkok on the Gulf of Thailand, Hua Hin is another of the country’s coastal resort destinations and is becoming more popular with both tourists and expats. Hua Hin is best known for its miles-long sandy beaches and is a popular spot for watersports, boating, and fishing. The area’s climate is hot year-round, with a dry season stretching from December to April.
Options for real estate in Hua Hin include a number of very attractive locations in the smaller, more rustic areas north of the city. In general, Hua Hin has a more relaxed and quiet feel than the busier resort towns like Pattaya, and this is especially true in the quaint outlying areas preferred by expat buyers. Prices for Thai-style, two-bedroom homes can range from 75,000 to 100,000 or more.