Buying a Property in Bangkok

Buy condo Bangkok

Buying a Property in Bangkok (FAQ)

What Type of Ownership structures are there?

In Thailand there are 2 types of Ownership Structures in a Condominium:

• Freehold Condominiums
• Leasehold Condominiums

Freehold ownership offers absolute (100%) ownership of the property and is the best form of ownership for Foreigners. Foreigners can maximum own 49% of the total floor area in a condominium building, the other 51% must be owned by Thai Nationals, therefore it is very important to check the foreign quota in a building before purchasing.

Leasehold ownership is another option for Foreigners to own a property for a maximum of 30 years. Foreigners can register the leasehold rights (Lease of Condominium or freehold land) with the district Land Office. After 30 years the lease term can be (most likely) renewed again.

More information can be found in our article “Buy a Freehold or Leasehold Condo in Bangkok”

Are condos for sale in Bangkok freehold or leasehold?

Most condos for sale in Bangkok are freehold. There are a small number of leasehold condos (mostly in the Langsuan-Ratchadamri area). A lease is usually 30 years with possible extensions.

Can foreigners buy a condo in Bangkok?

Yes, a foreigner can 100% own a condominium provided that the total foreign ownership of the building doesn’t exceed 49%. (Ratio 49% Foreigner / 51 % Thai).

Do I have to be a resident to buy a condo in Bangkok?

No. Even a tourist can buy a condo in Bangkok. On the other side, owning a condo doesn’t give you a long-term visa automatically.

Do I have to use a lawyer to buy a condo in Bangkok?

No, that is not necessary. We will prepare all the documents and do all the checking for you free of charge. You are, of course, free to use a lawyer if you are willing to pay their fees.

Can foreigners buy houses/ townhouses in Bangkok?

Foreigners are not allowed to own land or landed properties, like houses and townhouses under their names. Some foreigners use the name of a Thai spouse or a Thai company in which the foreigner has shares to buy landed properties (Buy land under a Thai company name). Foreigners should be fully aware of the risks and consequences when taking such approaches

Can foreigners get housing loans from banks in Thailand?

Theoretically, banks in Thailand can consider offering housing loans to foreigners living in Thailand for many years. Banks in Thailand have been stricter with providing loans to Foreigners and nowadays it is more difficult for a foreigner to get finance from a local bank in Thailand. In our experience, the UOB Bank is one of the Banks that can provide loans to foreigners.

What to check before buying a new condominium in Bangkok?

When considering the purchase of a condo in Thailand, it is critical that buyers ensure the seller has all pertinent documentation for real estate development. It’s vital to obtain these documents prior to entering into an agreement:

• The EIA
• The Building Permit
• The Land Title Deed
• The Developer company documents
• The Director(s) ID copy

The EIA ( Environmental and Industrial Act)

The Thai Government grants the EIA in Thailand that certifies a condominium’s construction plan and accompanying drawings.

The Building Permit

The Construction Permit from Thailand’s Government is required to begin any building project. This document will grant you permission to commence the construction process and ensure that your plans are adhering to local regulations.

The Land Title Deed (Chanote)

To ensure the rightful owner of a piece of land, it is essential to examine the Land Title Deed. This legal document will provide you with all pertinent information in regards to ownership and potential mortgages on said property. When purchasing from a developer, always double check that they are the verified title holder or if their purchase has been mortgaged for any reason.

The Developer company documents (Affidavit)

The Department Business Development (DBD) logo of Thailand must be displayed on the official corporate registration affidavit. When reviewing this document, ensure that you verify the company identification number, capital amount, director names as well as the business name for accuracy. The accuracy of all these pieces is vital to properly register your enterprise with Thai authorities.

To ensure the validity of a Land Title Deed, both the business name and owner’s name must be consistent. Similarly, any director ID copies should include the same names as indicated in said document. An affidavit is also required to confirm other particulars such as company address, authorized signatory and objectives associated with your organization.

The Directors ID Copy

To ensure accuracy, the Director’s ID must be consistent with the name(s) listed on the company registration affidavit.

What is the CAM Fee for?

The CAM Fee stands for Common Area Maintenance Fee and is to cover the general up-keep  costs and repairs of the common area and facilities: Fitness, swimming pool, garden area, elevators, building painting, window cleaning, security staff salaries etc

CAM Fees are usually paid 1 year in advance.

What is a Sinking Fund?

Sinking fund is only payable on new properties and is not required for any completed projects. The sinking fund is a fund reserved to cover the cost of structural problems, repairs, facilities and equipment replacement.

What Taxes and Fees are involved for Buyer and Seller when selling a property?

Buyers’ responsibility

Transfer Fee 1% of Appraisal Value from Land Office.

Stamp Duty 0.5% (of the registered Value. Only Payable if exempt from Business Tax), Mostly shared 50/50 with Seller

Seller’s responsibility

Transfer Fee 1% (of Appraisal Value from Land Office)

Income Withholding Tax 1% (If the Seller is a company, tax is fixed at 1% of the appraised value of the property)

Stamp Duty 0.5% (of the registered Value). Only Payable if exempt from Business Tax. Mostly shared 50/50 with the Buyer

Personal Tax 2.5%- 5% (if the seller is personal shall be calculated at a progressive rate based on the Government assessed value with a deduction based on the years of ownership)

Specific Business Tax 3.3% (of Appraisal Value)

***Each case is different and depends on the negotiation between the Buyer and Seller***

How does the buying process work?

When you find the condominium, you wish to purchase, a reservation agreement will be made up between Buyer and Seller to secure the Booking of the condominium. The buyer will give a copy of his National Passport and pay a deposit, which is mostly 10% of the selling price.

The buyer must open their own local bank account in Thailand. In case the buyer lateron decided not to purchase the condo, this booking fee will be forfeited.

*For Foreign Buyers who have purchased properties in the past, it is important that the buyer’s name in Thai is exactly the same as the name used for previous purchases.

*The Seller will show the title deed to the buyer to prove that he/she is the legitimate owner of the condominium unit together with a copy of her ID card.

* The buyer should also request to see a copy of the Tabien Baan and check whether the seller registered the condominium unit as its registered address. If that is the case the seller will have to move its registered address out of the condominium unit.

2) Sale & Purchase agreement

The second step is that a Sale and Purchase agreement will be made up. Herein is written the sale and purchase price, the amount of the deposit which has been paid (Between 5-20%), and costs of transfer including taxes, between buyer and seller.

* Usually transfer fees and Stamp duty are shared (50/50) between the seller and the buyer but depending on the outcome of the negotiations the seller or the buyer may be liable for 100% of all costs and taxes.

3) Transfer of the Funds

To purchase the condominium, the foreign buyer will have to prove that the total purchase amount, declared at the land department, is transferred from overseas to their local bank account in Thailand. The local bank needs to arrange the bank certification (FET form) to certify the money transaction from overseas and the purpose that this money is used to buy a condominium.

How can I prove that the money comes from abroad?

Foreigners must present a source of funds declaration and documentation to the land department when registering ownership. When you either Transfer money or bring a foreign Currency into Thailand valued at USD 50,000 (Or equivalent in other currencies), The Bank will issue a Foreign Exchange Transaction Form. (FET FORM)

*If you bring the money in cash into Thailand, you need to declare it to the customs officer and present a receipt from the customs to the Bank to issue a confirmation letter. Please keep in mind that when you transfer funds from a foreign currency into Thailand, the name of the beneficiary in the Foreign Exchange Transaction Form MUST be the same as the name of the Buyer, specified in the Sale and Purchase agreement.

*The Total amount of transferred funds must not be less than the net price (Thai Baht) of the Condominium unit as specified in the Sale & Purchase agreement, so it would be better if you transfer a bit more than the agreed amount.

* Please clearly specify the purpose of the transaction as “to purchase a condominium in Thailand”.

The last information you need to know for transferring the payment to Thailand is:

• Bank Name
• Bank Account Name
• Bank Account Number
• Bank Branch and address
• SWIFT CODE
• Purpose of Funds transfer (Purchase of a condominium in Thailand)

4) Documents for Transaction at Land Department

*The buyer has to provide a copy of his passport (Including the page with the visa stamp)

*Copies of the buyer’s certificate of marriage and the passport of the spouse. (Marriage certificates in the English language do not need to be translated, other languages need to be translated and the translation needs to be certified)

* If the seller does not have a lawyer, the buyer Broker/Agent should remain the seller to obtain the letter from the juristic person attesting to the foreign ownership ratio (Foreign Quota) and that the common area fee for the units has been fully paid (No Due Certificate). Without this document, the transaction may not proceed. If the seller is late with the payment of its CAM Fees the seller must clear the debt before the sale can proceed.

* The seller shall request his/her bank to issue the Foreign Currency Exchange forms that will serve to prove that the sale and purchase price is paid out of foreign currency transferred to Thailand.

* If the unit is mortgaged the seller must contact the bank that holds the mortgage and request the bank to calculate the final amount due to clear the mortgage and send it to an officer at the land department on the date of the transaction to clear the mortgage prior to the transfer.

–
5) Prepare the Payment at the Land Department
* The Buyer and/or the Seller will pre-calculate the amount of taxes to be paid at the land department office on the date of the transfer of ownership.

* The Buyer will prepare a cashier cheque equivalent to the amount of the net purchase price. (Taxes and expenses not included)( If the unit is mortgaged and it is necessary to pay the bank the buyer shall prepare a cashier check equivalent to the amount of the debt to be settled to the bank)

* Once received the cashier cheque, the buyer will send copies of the cheque to the seller and/or his bank to allow them to verify with the issuing bank that the check is indeed real.

* The Seller and/or the Buyer must prepare in cash the amount necessary to pay the taxes and government fees due on the date of the transfer.

–

6) Transfer at the Land department

*The Buyer, Seller, and the Bank (if the unit is mortgaged) or their authorized representative must all attend the Land Department on the agreed date of the transfer. If one party is missing or not represent the transaction cannot go ahead.

* The buyer representative will show the original cashier cheque to the seller and or the bank representative (to release the mortgage on the unit)

* The seller and the buyer (Or representatives) will sign the sale and purchase form prepared by the land office and the documents required for the transfer of the unit (Original duplicate of the title deed).

*The Land Officer will change the original duplicate of the title deed and will give it to the buyer (or representative) mentioning the name of the buyer as the new owner of the unit. Both parties (See agreement) will pay the taxes and costs due for the transaction to the Land Officer.

Note: The seller must prepare the documents for the transfer of the electricity and water meters to the buyer. The buyer will have to refund to the seller the deposit paid by the seller to the electricity authority if this matter was not included in the sale and purchase price.

What is the Foreign Exchange Transaction Form (FET)?

Buying a condo in Thailand can be a complicated process for foreign buyers, necessitating adherence to the country’s Condominium Act. The Foreign Exchange Transaction Form (previously called Thor Tor 3) is required to meet the Bank of Thailand’s stringent exchange policies when transferring money into the country from abroad for real estate purchases. This critical document ensures that your purchase abides by all legal regulations and provides you with peace of mind during this exciting transaction!

Easier Explained:

A FET document is essential to demonstrate that foreign currency was effectively transferred into Thailand and then exchanged for Thai baht through a local bank. Without a valid FET Form, the sale of an asset cannot be finalized at any Land Office. Additionally, when it comes time to remit proceeds from property back to its origin country, many domestic banks also require this form.

How to obtain a Foreign Exchange Transaction Form (FET)?

To be able to secure a FET Form that fulfills all the Bank of Thailand’s regulations and Land Office requirements, foreign buyers must observe certain steps:

1. The purchase amount for the condo should be transferred in foreign currency. Moreover, it is essential to note that these monies need to be converted by the acquiring Thai bank itself.
2. When transferring funds abroad, ensure that your name appears either as the sender or receiver (or at least mentioned for what purpose) on those documents respectively.
3. Make sure you state clearly why you are conducting such a transaction when completing any transfer forms with your chosen financial institution

Take a look at this to understand the purpose of a transfer note:

“Money Transfer for the Purchase of [Unit Number], on [Floor], in Condominium [Full Condo Name] on behalf of [Mr. /Ms. Full Passport Name]”

If an international buyer and/or their legal representative comply with the 3 conditions mentioned beforehand, they can visit a Thai bank branch to request for a FET-Form. Typically, if the remittance amount is below 50,000 USD, local banks will provide either a Credit Note or Bank Letter of Guarantee that is accepted by the Land Office. Bear in mind when receiving one of these documents that your bank must state precisely how much foreign currency was obtained after conversion as well as what purpose it served.

Foreign Exchange Transaction Form FAQ

• What is FET in Thailand?

Answer: The Foreign Exchange Transaction (FET) document is an obligatory record for those looking to transfer money from abroad in order to buy property in Thailand. This statement meets the Bank of Thailand’s foreign exchange policy requirements and must be obtained before any real estate transaction can occur.

2. Can an international buyer transfer funds to a third party such as an attorney, estate agent, or acquaintance and still receive the necessary FET Form?

Answer: As long as the three stated requirements are met, a FET Form can easily be obtained by the foreign purchaser’s representative.

3. Is a FET Form mandatory when purchasing an off-plan or new build?

Answer: Absolutely, a FET Form is still mandatory. Therefore, foreign buyers need to carefully follow the transfer directions when sending money to a project developer’s account.

4. Can I see a sample FET Form?

Please see a sample Foreign Exchange Transaction Form below

Sales Commission in Thailand

In Thailand, the commission is paid by the property owner and is already included in the advertised selling price. When it comes to sales commissions in Bangkok, the industry standard is 3% of the agreed selling price.

Example:

Agreed Selling Price= 10,000,000 THB

3% of 10,000,000= 300,000 THB Commission payable to an agent when the transaction is completed.

Do you need a license to sell real estate in Thailand?

In Bangkok, there is no need to acquire a license to become a real estate agent; however, foreigners must possess valid visas and obtain work permits in order to operate a real estate agency in Bangkok. As such, the standard of agents varies significantly throughout Thailand.

How does The Credit Advice/FETF Form looks ?

The Land Department requires the official document from your Thai bank, which is issued for each overseas transfer you make. It’s an essential part of transferring ownership and must be provided in order to complete the process.

Sample of The Bank Guarantee Letter

This official letter from the Thai bank serves as proof that funds are coming from abroad, and must also be accompanied by a credit advice/FETF in order for the Land Department to process ownership transfer.

How does a Title Deed/ Chanote looks?

This document provides authoritative confirmation of the ownership of the condominium. On one side, it outlines all pertinent specifics pertaining to a particular unit: project name, address, size, number and floor are all clearly visible. The reverse displays relevant information about the owner.

Frontside

CONTACT

Amazing Properties is a registered Real estate agency in Bangkok with an extensive selection of condos, apartments, and houses for rent in the Sukhumvit and Sathorn area.

Please browse our new website with a great selection of condos for sale in Bangkok or feel free to contact us via

Phone: 096-9963696
Email: [email protected]
Line id: amazingproperties
Website: www.amazingproperties.org