If you are considering buying off plan, fast becoming the most popular way to purchase property, then the process is fairly simple. Offering helpful advice on the pros and cons of buying property in Thailand is Bangkok Living, a leading property developer and realtor in the city.
Can you explain the restrictions for foreign buyers looking to own property in Thailand?
As a foreigner, it is possible to buy leasehold landed property for up to 30 years. In some instances, developers will agree to extend the lease for an additional 30 years (sometimes more) for no extra cost, but under the Thai property law 30 years is the maximum allowed. Foreign buyers looking to buy freehold condominium units can purchase up to 49% of the units but are not allowed to own the property outright.
Should I hire a local lawyer and estate agent to deal with all the buying and conveyancing procedures on my behalf?
The buyers we have from mainland China and Hong Kong are mainly buying off plan properties and are finding the procedure really easy. A booking fee of HK$20,000 is payable when the property is chosen, and a further 10% is paid to the developer within 2 weeks. The buyer will then receive their sales and purchase agreement within 30 days. When they sign the agreement another 10% payment is due, this is normally within 30-45 days of the original booking fee being paid. The buyer does not have to make any more payments then until the completion of the property and ownership transfer papers are sent by the developers to the Land Office. There is usually no need to employ a lawyer during this process as it is all worked out between the developer and the seller’s agent.
In Thailand, it is necessary to make all payments in either US dollars or HK dollars to ensure all payments comply with the foreign exchange rules. Those who are buying previously owned property the structure is slightly different, where 10% deposit is held in escrow while the sales and purchasing agreement is being prepared. Again, no lawyer is necessary as the selling agent can deal with this process and it usually costs no more money for their service. A power of attorney can be arranged so that the agent is authorised to act on behalf of the buyer. A date for the ownership transfer is set after the purchase agreement is signed, the final payment is made in front of an officer from the Land Office and then the fully endorsed title deed is handed over to the new owner.
Is it possible to get a mortgage as a foreign buyer? How do mortgages work in Thailand?
Mortgages are available from international banks usually for 70% loan to value. Banks such as Bank of China, UOB and ICBC offer mortgages through their branches in Singapore although applications must be made in Bangkok. There are strict eligibility requirements and it is important to make the application several months (at least 1-2) prior to drawdown. It is possible to make repayments in Thai baht at your banks branch in Thailand.
Am I protected legally if my developer goes out of business?
In our many years of business in the region we have not experienced a single case of where the developer failed to deliver on a sales promise. Almost all of Bangkok’s developers are publicly listed companies who are financially stable and have great track records in the industry. Some of the developers are affiliated with larger Japanese companies such as Mitsubishi thus offering peace of mind to potential property buyers.
Will owning a Thai property qualify me for a retirement visa?
Where once a retiree was only able to apply for a one year visa which had be renewed annually, since the end of 2016 a renewable 10 year retirement visa was introduced. This is also renewable. It is important to note that to be eligible for the 10 year visa you must have either a deposit of HK$650,000 minimum or a regular income equivalent. The deposit will be held in a bank account in Thailand for a minimum of 1 year after issue of the visa. It is a requirement that the applicant has health insurance also. The bank deposit amount must be over and above the money for the purchase of the property, this value cannot be included within the deposit requirements.