When buying property abroad, you don't always know all the details of the process in a new country and it's easy to become confused and miss something important. What should you pay attention to in Thailand, so as not to regret the purchase later?
It is important to remember the Kingdom’s restrictions on real estate purchasing by a foreigner. A citizen of another state cannot be the owner of a land plot in Thailand. The person can only utilise land on a long-term lease. Benefits have recently been introduced for holders of the newest long-term resident LTR visa, so with the permission of the relevant department, such residents will be able to purchase land for business. When purchasing an apartment in a condominium, it is important to respect the quota, as foreigners can own no more than 49% of the property in the building. When buying an apartment from a developer, the quota will be ensured. However, if the apartment belonged to a Thai, then he may not know the exact data on the quota in the facility and therefore, these data need to be clarified with the management company.
It is necessary to find out about the tariffs for the services of the management company for the house where you’re going to buy an apartment, in advance. In developments of different classes, the tariff will vary and high utility fees can be an unpleasant surprise later.
It is also necessary to clarify whether there are any debts for the selected property, whether the bills for water and electricity have been paid and whether the annual contribution to the condominium fund has been made. When buying a villa, you should check whether the building is registered on the plot of land.
If you plan to rent the purchased apartment out, you should ask the management company for the rules introduced to the complex in this area. In many condominiums, rentals are only allowed for a long term, of no less than a month or even a year.
If a foreigner is going to live in Thailand with their pet, be aware that many apartment buildings do not allow pets, as it may be against the rules of the community. Finding an apartment where you can live with a cat or dog is very difficult and will most likely be necessary to find a private house instead of an apartment.
If the property’s price is quite low (especially in the secondary market), you must find out the reason for such a price. An apartment or villa may have hidden problems. You should also pay attention to the infrastructure nearby and find out if there are any sources of unpleasant smell or noise nearby, and whether parking is provided near the chosen facility.
The importance of document verification during the property buying process cannot be overemphasised. Of course, realtors and lawyers will help you with this, but the buyer needs to understand exactly what they are signing and what documents must be provided by the seller.
When you have chosen a property, an agreement on property booking is signed. After signing this document, the buyer must pay approximately 30% of the total amount.
At the stage of concluding an agreement, the buyer receives a draft transaction agreement in two languages, Thai and English. It is wise to order a translation of the Thai version into your mother tongue in order to avoid surprises and understand exactly what you are signing. The document should indicate the obligations of the parties, including exactly who is expected to pay taxes and fees, a description of the property, its prices, and other details.
The sale-and-purchase agreement must also be submitted to the Land Department. This agreement must be signed no later than 30 days from the date of property booking.
Transferring funds is also a critically important stage in the process of purchasing a real estate unit. Payment for property in Thailand purchased by a foreigner is always made by a transaction from a foreign bank to a Thai bank in foreign currency (not in bahts). After the transfer is performed, you must obtain a Foreign Exchange Transaction Certificate (FET Form), which confirms the transfer of money from the buyer to the seller. It is necessary to check in advance whether a transfer from the buyer's bank to Thailand is possible in order to be sure that the transaction will go through without issues at the time of signing the purchase agreement.
If you purchase a property in Thailand directly from the developer, it is necessary to go through the process of registering your sale-and-purchase agreement with the local Land Office. The seller and the buyer (or their representatives) will have to meet with an official of the Office and sign the documents of sale. After which, both parties pay taxes and fees, and the title deed is issued in the name of the buyer.
When buying property on the secondary market, the seller will have to hand over the keys along with a document called the Tabien Ban. This document certifies the registration of a person in a residential unit.
It is possible to buy property in Thailand remotely. You can study the chosen property with the help of a video recorded in advance, or online in a video call format. If a foreign buyer purchases a property in Thailand online, all actions will be performed by their representative, a realtor or a lawyer. To do this, you will need to write a power of attorney for such a representative. Transfers between banks are carried out remotely.
Even if the buyer delegates the process of purchasing real estate to a professional, you should not completely step back from the process. If any of its shortcomings are overlooked at the stage of choosing a property or buying it, this can become a significant problem for the new owner later. Even if they’re not going to live there personally, but plan to purchase the property as an investment, a bad smell, noise from the window, and other disadvantages can affect the rent and greatly reduce the expected income.