Property For Sale Hua Hin get asked the below frequently asked questions all the time. So, we thought it would be a good idea to put them all in one place.
We also know that buying property in another country requires complete confidence. Therefore, it is important to source a trusted real estate agent and a trusted legal advisor. When you have both, you will end up making the right decision.
Please take a look at the following FAQ’s. The more informed you are, the better equipped you will be when beginning the process of investing in your dream home in Hua Hin, Thailand.
Is it possible to legally buy a house in Thailand as a foreigner?
Yes, it is.
It is 100% legally possible to buy and own houses and swimming pool villas in Thailand in your own name as a foreigner. You will have full ownership forever. You will sign a house purchase contract giving you the house 100% freehold in your name. You will then sign your lease agreement giving you uncontested rights over your land the house sits on. Your full name will also be written on the back of the land title.
Is it possible to legally lease land safely in Thailand as a foreigner?
Yes, it is.
You can 100% legally and safely register land leases via 30-year renewable leases at the Thai government Land Office. The land leases are 100% safe and also flexible. Lease contracts include for example, clauses such as heirs of succession clauses. Therefore, the leases are assignable to sons, daughters, friends etc.
Also, importantly, leases in Thailand do not ’run down’ or depreciate. If you buy a pool villa in Thailand and decide to sell it after 5 years, the new buyer will get a new 30-year lease.
Is it possible to legally own land in Thailand as a foreigner?
In general, it is not possible. Foreigners cannot buy and own land in their own name in Thailand.
Is it possible to legally buy a condominium as a foreigner?
Yes, it is.
You can legally buy condominium apartments 100% in your own name in Thailand.
This type of property purchase is the most straightforward in Thailand.
How long does it take, for example, to build a brand new off-plan swimming pool villa in Hua Hin?
It takes approximately 7 to 12 months to build a brand new swimming pool villa in Hua Hin. This can vary slightly on factors like for example, the rainy season and if you decide to make lots of changes to the house design. Some of the more established developers will allow you to delay the build by paying a small deposit and then paying a 10% down payment on signing contracts. Then, you agree to a delayed build time. This is an ideal option for clients who have, for example, some funds tied up in savings plans.
The construction of the pool villa is paid for in instalments. The payments are proportionately spread over the build time.
How much is the reservation deposit to reserve an off-plan swimming pool villa?
A fully refundable 200,000 THB reservation deposit is the standard deposit required to officially reserve a property from the marketplace. Property For Sale Hua Hin hold your reservation deposit until your appointed legal advisor has executed full due diligence. If your legal advisor finds any reasons to not go ahead with the purchase, Property For Sale Hua Hin will refund your 200,000THB deposit in full, no questions. This refund is our standard company policy. Of course, if your legal advisor executes full due diligence and no problems are found, the deposit is then transferred to the developer or seller.
What are the advantages and disadvantages of buying off-plan?
Some of the main advantages of buying off-plan are that you can choose your land plot; you can make modifications to the house and swimming pool layout; you can choose your own kitchen, bathrooms and floor tiles and furniture packages. Of course, the property will be brand new and come with warranties and guarantees too. The main disadvantage is that you have to wait for your pool villa to be completed. You may also be subject to some construction noise and dust while the development completes.
Is buying an off-plan swimming pool in a development safe – and how do I know the development will complete?
In Hua Hin, there are some excellent developers that sell out their developments in record time. They have been constructing for over 14 years in Hua Hin and have completed many developments. One developer is already building his 9th development. There are, however, some developments that have gone bankrupt while some developments have been under construction for many years and still show no signs of completing.
This is why employing a professional local legal advisor and combining that safety measure by consulting a reliable and transparent real estate company is so important. Forewarned is forearmed and reduces risk.
Should I employ a local legal advisor?
Professional local independent legal advisors reduce risk. Our company policy strictly recommends that all our clients seek out the advice of local independent legal advisors. Your appointed legal advisor will execute full due diligence for you.
Due diligence should be executed before the signing of any contracts. Your legal advisor will make sure that for example, the seller is the real owner of the property; check to see if there are any debts, mortgages or encumbrances on the land; draw up contracts; review existing contracts; execute powers of attorney; and liaise with the government Land Department. The legal advisor will also organize the transfer and ownership of the property. They also organize usufructs and rights of servitude.
What is a chanote title?
A chanote title is simply the land title. There are different types of chanote with full chanote being the top tier land title. Nor sor sam gor is also recognized as a very safe land title. Thai banks will lend mortgages on both these types of land title.
Is it possible to borrow money from banks in Thailand?
In general, it is not easy to borrow money from banks in Thailand if you are a foreigner. You can however be a guarantor for a Thai person. The good news though, is that some of the larger developers will offer finance. They prefer to lend maximum 50% of the total sales price for off-plan pool villas, usually requesting a 50% down payment. Property for sale Hua Hin have a good relationship with some of the developers and are able to arrange finance with competitive interest rates.
Budgeting: apart from the cost of the sales price, what other costs are involved in buying property?
Apart from the cost of your house, pool villa or condo, you need to budget for the following:
A legal advisor – from 49,000 THB to 69,000 THB
Transfer fees and taxes – budget for approx. 3% of the price of your chosen property. Transfer fees and taxes are usually shared between buyer and seller
Furniture is usually included if buying re-sale property but can be negotiated
Furniture packages are usually included when buying new off-plan pool villas
What about monthly running costs after I have bought my property?
Most quality pool villa developments charge a monthly maintenance fee. This is usually calculated on the size of the land plot size. The fee is usually from 12 Thai Baht to 13 Thai Baht per square metre of land plot.
For this monthly fee, you will receive a secured gated community with 24-hour patrolled security; shuttle bus services into Hua Hin town centre and back 4 times per day every day of the year; weekly swimming pool and garden maintenance with all products supplied; upkeep of all community areas and regular rubbish collection.
What are the advantages and disadvantages of buying a pool villa on a gated development?
Some of the main advantages are that the environment is always clean and safe and secure. It is much easier to sell your property again in the future if it is on a development as opposed to a stand-alone house. It is much easier to rent out your property for a passive income. The development is always immaculately kept. And, you will not be kept awake all night by soi dogs running around barking and knocking over rubbish bins looking for food and ripping plastic bags to pieces!
Some of the main disadvantages are that of course you are tied to a monthly maintenance fee. However, some developers will let their residents maintain their own swimming pools and gardens.
Can you help me with opening a bank account; organizing a visa; organizing
We will walk you through the complete process of opening bank accounts, organizing visas, personal health insurance, home insurance, car insurance etc. We can even advise on the best places to eat, the best places to play sport, play golf and which shopping malls have the best deals!
What fees, taxes and costs are applicable to purchase a property?
Whenever a property in Thailand is bought and sold, these are taxes that need to be taken into account.
Tax on purchasing of properties:
- Ownership Transfer feeis paid to the Land Department Office, the transfer fee normal rate is 2% of the government appraised value or selling price depends on different cases.
- Stamp Duty feeis paid to the Land Department at 0.5% of the government appraised value or the selling price, depending on whichever is higher.
* In case of duty stamps fee are following:
– The seller has owned the property for at least 5 years.
– The seller has used the property as his primary residence for at least 1 year prior to the sale.
– The seller received the property as an inheritance.
- Specific Business Taxof 3.3% of the government appraised value or the selling price, depends on whichever is higher, this will be applied to all sales by company and to any private sales that occur within 5 years after the date of purchase and the seller has not used the property as his primary residence less than 1 year prior to the sale.
- Withholding income tax of 1% For Private sales, is calculated on a very complex formula based on the assessed value of the property, the length of time owned and the applicable personal income tax rate. 2. Corporate income tax is calculated at 1% of government appraised value or the selling price, depends on whichever is higher
Can foreigners get a mortgage loan from local banks in Thailand?
Foreigners can not get a mortgage loan from local banks in Thailand to buy property, unless they have a Thai partner willing to act as guarantor. There are numerous other conditions too, so if you wish to go this route, make sure you have a totally reliable Thai partner, and you have plenty of demonstrated income (either here in Thailand, or from overseas). The purchase money must be transferred from banks outside Thailand , in foreign currency form. The buyer must state that the purpose for the money transferred is to purchase a condominium unit in Thailand on the funds transfer document. The Bank is then able to issue the form of TT3 (Thor Tor 3) or Authority to Purchase for the relevant land office in Thailand , giving the foreign buyer authority to purchase.
How can a foreigner own a house and land in Thailand?
Technically (and in most cases) a foreigner cannot own a house in Thailand as the Thai Government does not allow a foreigner to own land (which a house is obviously built on). In Thailand , a house would come with a title deed (Chanode) that will also show a certain amount of land with the house, which will be registered to the owner of the property as well.
As stated above, legally and technically a foreigner cannot own land in Thailand. There are a few small cases and a few new laws (over a certain age……with so much money…….in certain areas of Thailand……..married to a Thai National……etc.) that might accept foreign ownership of land in their name, but the above is the normal scenario.
Most often, foreigners here form a company of dominantly Thai National shareholders (usually about 20,000 THB to 40,000 THB to form and register the company properly). When a registered company’s shareholders sign ‘share release forms” one individual may ‘become’ the managing director and only signatory for the company. The managing director may then sign for property purchases and the company (managing director) owns the property (house and/or land). A Thai national must own 51% of the firm, but the firm will be organized so that you have all the economic and juridical rights. In addition, by using this system, it will be easier for you to buy a car or to get residence permit.
You have to pay at least 30% as a deposit, and then the original owner of the house is committed to you. The company (managing director) is also able to transfer ownership by selling the position in the company which owns the property and/or sell the property outright at any time in the future. Ownership of land is governed by the Land Code BE 2497 (1954), the Civil and Commercial Code, Land Reform for Agriculture Act BE 2518 (1975) and the regulations set forth by the Ministry of the Interior. For a foreigner who is married to a Thai citizen, the Thai spouse can buy property using his or her name only.
A foreigner who invests 40 million baht or more in a Thai Company is eligible to purchase land and a house at the size of maximum 400 square wah maximum total land area.(1 square wah = 4 square meters). A foreigner who invests with a Thai registered company at 49-51% ownership (unlimited amount), foreigner shareholder at 49% of ownership can purchase land and house with unlimited size and amount of investment through company registered name.
How can a foreigner own a condominium in Thailand?
Foreigners can outright own a condominium in Thailand 100% freehold.
Imagine a building has 100 units. 51 of those units must be owned by Thai nationals. A maximum of 49 of those units can be owned 100% freehold by foreign nationals.
If a building’s foreign quota limit is reached, the only way to purchase a freehold condo at that building is to buy from a foreigner with an existing freehold title.
Alternatively the foreign national can choose to buy from a Thai national but only on a leasehold ownership.
What is the difference between buying Leasehold v Freehold?
Foreign nationals cannot own land in Thailand as freehold. The most common practice for foreigners buying house and land in Thailand is to do a leasehold structure of a maximum of 30 years with the landlord.
This is a watertight contract that is given by the local land office and the foreign national can then technically own the land for that period of time.
The lease can also be extended by two terms of 30 years each, giving the lessee a total of 90 years. This has to be a separate contract between landlord and lessee.
Should you wish to sell the land and house in future before the leasehold term expires, you may do so freely to a Thai or foreign national.
It is up to the landlord to sign the freehold land transfer to the Thai buyer or accept a new term of 30 year lease if it is a foreign national who wishes to apply for a new leasehold term of 30 years.
The foreigner purchasing from you can also simply take over the existing leasehold term if they wish. Meaning if you have owned the property for 5 years, the buyer will be taking over the remaining 25 years of the leasehold term. Even though foreign nationals may not own land, the building itself can be owned outright by a foreigner.
What are the processes to purchase a property?
Once you have found the perfect property with one of our experienced agents, it is advisable to pay a 10% holding deposit as soon as possible to take the property off the open market. We say “soon” because we have seen some cases where buyers wait too long and the property is sold to another party. It’s also absolutely advisable to consult with a reputable, qualified Thai lawyer when paying the deposit, so they can prepare the relevant reservation deposit or sell and purchase agreements to state the terms of sale.
Normally in the case of a resale / ready to move in property, you pay a 10% reservation deposit to the agent’s company account. Once the deposit is paid, your lawyer will complete full due diligence. When it comes back all clear and there is nothing preventing you from legally buying the property, your deposit becomes non refundable. Typically you would then have between 30 to 60 days for completion of sale and transfer of ownership. This can differ depending on the wishes of both parties.
Buying a made to order or off plan property from a developer, you normally pay a deposit of around 200,000 THB to reserve the property. This is always non refundable. This is then followed by payment of between 20% to 30% on signature of contracts and beginning of construction, followed by staged payments over the construction period of the property.
What documents do you need when buying a condominium?
To put a deposit and sign an agreement the buyer would need to give :
– A certified copy of the passport . (ID card if Thai citizen)
And the seller needs to give :
– A certified copy of the passport . (ID card if Thai citizen)
– A certified copy of the title deed.
Each party shall keep 1 identical copy of an agreement signed.
And on the ownership transfer date at the land department a foreign buyer shall provide documents as follows:
– TT3 (Thor Tor 3) or Authority to Purchase for the relevant land office in Thailand (state in clause 6)
– A certified copy of the passport
– A copy of marriage certificate (if any)
– A letter of consent from the wife or husband (if any) in case either is unable to attend the transaction of ownership transfer.
**all the above documents must be translated in Thai.
Should I renovate a property before selling?
There are a number of things you can do to make your property attractive to prospective buyers. Let’s break it down in an easy bullet point list:
- Make it look presentable – this includes keeping the property clean at all times, making sure it does not look run down, making sure it doesn’t have any unpleasant smells or odours etc. If you do not live in your property it’s best to have it cleaned as often as possible we can recommend good, reputable cleaners.
- Make it available to view during normal business hours on all days of the week. Remember, when someone is looking for a property to buy in Hua Hin or elsewhere in Thailand, they are most likely on holiday or only have time on weekends so it’s best to make your property available as much as possible.
- Price it correctly – Experienced agents can provide comprehensive property evaluations in order to make sure your property is priced correctly. Listen to your agent and keep an open mind. We listen to the market and your property needs to be priced according to what the market says. Ask your agent what other properties in the area have sold for recently as a comparison.
- Photos – make sure you have as many high-quality photos as possible. Normally the first impression of your property is online – so the better the photos, the more inquiries your property should receive.
- Be open to negotiation – remember that most buyers of resale or ready to move in properties are looking for a good deal and will most likely haggle. Sometimes more than you expect. Again, don’t get offended and keep an open mind. If someone makes an offer it means they’re interested.