Many foreigners love Southeast Asia and want to settle down here one way or another. The details of buying property in Thailand bring up many questions for them. Here, we have look at the ten most common of them.
Content:
- Can foreigners own property in Thailand?
- How does a foreigner buy land in Thailand?
- Can a foreigner rent real estate?
- How is land rented?
- Do foreigners have to pay property tax?
- Can foreigners rent out my home?
- How to buy a property in Thailand remotely?
- Can I get a visa to buy a property?
- How to buy a property with a mortgage?
- Is it possible to pass the right of ownership by inheritance?
- Conclusion
Can foreigners own property in Thailand?
Any foreign individual or legal entity has the right to own real estate in the Kingdom, provided the following requirements under the Commonhold Property Act are met:
- The property to be purchased is in a building registered as a commonhold property.
- In this building, local citizens own 51% of the property.
- You have an amount of foreign currency at least equal to the value of the property. This money must be exchanged at a local bank in Thai baht for a certificate of exchange of funds and submitted as proof for registration with the Land Department.
It should be noted that foreign ownership is the individual personal right of a foreigner. Therefore, they cannot transfer the title to an apartment in Thailand or to another foreigner unless that foreigner (including foreign heirs) has the right of ownership under the Commonhold Property Act.
How does a foreigner buy land in Thailand?
According to the Land Code Act, foreign nationals cannot buy freehold land in Thailand. There is, however, a work-around to purchase land on behalf of a company. Establishing a Thai limited liability company allows foreigners to own up to 49% of the company. Thai citizens are to hold the remaining 51%.
To be recognised by law, the company must be a legitimate business, generating income and having genuine Thai investors. That's why, shareholders can legally use the company to buy land or real estate.
Can a foreigner rent real estate?
Unlike buying, there is no separate law for renting that restricts foreign nationals from renting real estate in Thailand.
How is land rented?
A land lease agreement is signed for three years or more. The leaseholder must also register it with the Land Department and pay the appropriate taxes. The maximum term of the lease is 30 years, with an option to extend for another 30 years.
Do foreigners have to pay property tax?
Any foreigner who owns real estate in Thailand is required to pay tax on the land and building on it in April of each year. Property tax in the kingdom has been in effect since 2019. Unlike other countries, it is low, depends on the assessed value, and ranges from 0.03% to 1%.
When transferring ownership, you must pay a tax equal to 2% of the object's value.
A long-term lease pays 1% of the value of housing. It is called the registration tax on rental property.
Can foreigners rent out my home?
If you are a property owner, you can rent it out, even if you are a foreigner. Some banks even offer to open a specific account for collecting rent.
Important: Owners who rent out their housing must pay income tax. It is calculated on a progressive scale and varies from 5% to 35%.
How to buy a property in Thailand remotely?
To do this, you need to appoint a trustee representing your interests in all legal procedures, including with the Land Department for the ownership registration process.
Can I get a visa to buy a property?
Buying property in Thailand does not give owners visa privileges. You can use the Thai Elite Visa program to stay in the country long-term. This program allows investors and buyers to obtain a long-term visa for 5-20 years for an investment in the Thai economy of THB 10 million ($284,190) or more.
Real estate can be considered an economic investment, provided that its value is greater than or equal to 10 million THB.
How to buy a property with a mortgage?
Only residents can apply for a mortgage. Getting a loan from a Thai bank with a tourist visa is impossible.
What conditions does a resident foreign citizen need to follow for a Thai bank to approve their application for a mortgage:
- Official employment in the Kingdom with a work permit for one year, where salary is at least THB 80,000 ($2274) per month;
- a valid residence permit;
- marriage to a Thai citizen;
- At payment completion, the borrower must be no more than 60 years old.
Even in full compliance with all of the above requirements, a bank may refuse to lend to a foreigner, or require additional guarantees.
Is it possible to pass the right of ownership by inheritance?
The owner can transfer the property by inheritance if the heir's name is included on the title deed. If no name is specified, the inheritance follows this order: parents, spouse, children, and the eldest male relative.
Conclusion
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