Frequently Asked Questions
& Owning Property in Thailand Information
- How do I own property in Thailand as a foreigner?
Purchasing a condominium is the easiest
way to own property in Thailand. In order to transfer any monies used to purchase a condominium
back out of the country at a later date you will need proof from
the bank that the monies were used for this purpose so you will
need to get either a Tor Tor 3 form or a payment slip from the
bank as supporting proof.
Tor Tor 3 (TT3) and payment slips explained.
A Tor Tor 3 (TT3) is actually now called a Foreign currency transfer form. This form is only necessary if you transfer over 20,000 USD into Thailand in any foreign currency to buy a property and at a later date you wish to sell the property and transfer the money back out of the country. For any other payment method you will need to collect a payment slip if you want to transfer money back out of the country.
The following lists the scenarios for obtaining a TT3 form or payment slip:
- If you transfer a foreign currency amount greater than 20,000 USD to Thailand straight into the developer’s bank account, then the developer can get the TT3 form from the bank for you.
- If you transfer a foreign currency amount less than 20,000 USD to Thailand straight into the developer’s bank account then the developer can get a payment slip from the bank for you as support documentation (instead of a TT3 form).
- If you transfer a foreign currency amount greater than 20,000 USD into a bank account you hold in Thailand and subsequently transfer that money to the developer’s bank account in Thailand then you are responsible for getting the TT3 form from your bank.
- For all other methods of payment, you will need to get a payment slip from the bank for support documentation (instead of a TT3 form).
- Please note that if you have transferred money into Thailand over 10 years ago and did not get a TT3 or payment slip then unfortunately as the banks don’t hold records that long, then there is no way the bank can provide you with a TT3 or payment slip
- What is the Thailand-Australia Free Trade Agreement?
The Thailand-Australia Free Trade Agreement is a major market
opening agreement, which will result in Thai tariffs on virtually
all goods imported from Australia being eliminated by 1 January
2010. It will also substantially improve the environment for
bilateral services trade and investment.
Australian business is urged to take a close look at the new
opportunities created by the Thailand-Australia Free Trade
Agreement. The imminent reduction of Thailand's high tariff
barriers (for some tariffs up to 200 per cent) means that exports
may now become viable for a range of products. Opportunities
are also opening in Thailand for Australian service providers,
investors, and manufacturers and processors.
The Thailand-Australia Free Trade Agreement entered into force
on 1 January 2005. http://www.dfat.gov.au
- Differences between Leasehold and Freehold property?
Leasehold means that the buyer is only leasing the property from the land owner for a pre-determined period of time normally valid up to 30 years. Renewal for a further 30 years only is at the discretion of the lease holder (land owner). At the end of each term, both parties must register the renewal with the Land Department and pay government fees, including stamp duty. This gives the lessee "ownership" of the land. The downside is that the lessor may not wish to renew or the law may change to your detriment in the future. Any capital you invest into leased property is therefore liable to be lost. Property owned by the Crown Property Bureau is always Leasehold. Some private property owners may also sell their property with a leasehold title deed.
Freehold foreigners can buy and own freehold condominiums, giving you full ownership rights purchasers, including the right to sell or lease the property and to develop the property within the guidelines under Thai law.
- How can a foreigner own a Condominium in Thailand?
A foreigner can own freehold a condominium in Thailand because a condominium's title deed (Chanode) does not have any land registered to or associated with the condominium. The land is owned by a Juristic Persons Group (Association) registered with the Thai Government and made up of a majority of Thai citizens. Buying a condominium is perhaps the simplest and easiest option available to foreigners.
A foreigner may also own a condominium with a leasehold agreement. In this case, the property remains in the Thai owner's name, but you sign a 30, 60, or 90 year leasehold agreement, with all the legal obligations and benefits that this offers, including the right to buy, sell, trade and will the lease to heirs. Lawyers can help set up all the correct legal procedures and paperwork needed for this type of purchase. Purchases of condominiums by foreign individuals come under the jurisdiction of the CONDOMINIUM ACT (No. 3) B.E. 2542 (1999).
- 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, in certain areas of Thailand, married to a Thai National and have so much money 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 share holders (usually about $250 to $500 U.S. Dollars 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).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 anytime 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 can purchase land and house with unlimited size and amount of investment through company registered name.
- If the wife of a Foreigner is a Thai national, can she own a house or Land in Thailand?
Prior to 1998, any Thai woman who married a foreigner would lose her right to purchase land in Thailand . She could, however, still retain land that she owned prior to marrying the foreigner. However, the recent (1999) Ministerial regulation now allows Thai national's married to foreigners the right to purchase land, but the Thai spouse must prove that the money used in the purchase of freehold land is legally solely theirs with no foreign claim to it. This is usually achieved by the foreign spouse signing a declaration stating that the funds used for the purchase of property belonged to the Thai spouse prior to the marriage and are beyond his claim.
- 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 fee is paid to Land Department Office, the transfer fee normal rate is 2% of government appraised value or selling price depends on different cases.
- Duty stamps fee is paid to Land Department at 0.5% of the government appraised value or the selling price, depends 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 Tax of 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
- 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.
- Corporate income tax is calculated at 1% of government appraised value or the selling price, depends on whichever is higher
- Purchasing procedure?
There are generally three different appraisal values; the government value, the appraisal company's value and the market value of the property. The government value is calculated every 5 year, the last updated is in 2004. Over the last few years all of these rates have begun to come closer together.
- Purchasing procedure?
- Deposit?
Once you have found the property you made a decision to go for you must put a deposit of 10% is usually required to secure an agreement to purchase and sell such a property and remaining balance should be made within 30 to 60 days on the transfer date of the ownership and pay the transaction expenses to the Land Department, state in clause 9. You can obtain longer periods but you will probably be required to pay a higher deposit. Deposits are normally non refundable, except by default of the vendor, so bear in mind that once the deposit is placed you are committed .
- Purchasing Contract?
On the same date you put the deposit to the seller both parties have to sign a purchase and sell agreement that shall stipulate a time limit which both the buyer and seller will complete a ownership transfer and pay remaining balance to the seller. If either party fails to meet the obligation, the failing party will have to pay a penalty. For example, their deposit could be forfeited or if the seller was wrong, the deposit would have to be refunded
- What documents do you need when buying 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)
- 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
- What kind of fees can I expect on top of the purchase-price, when buying a property?
FREEHOLD:
-
0.5% = Stamp Duty = of the Phuket Provincial Land Office's estimated asset value or of the full value (selling/purchase-price), whichever is highest.
- 2.0% = Transfer Fee = of the Phuket Provincial Land Office's estimated asset value, which is usually lower than the selling/purchase-price.
- 3.3% = Business Tax (if the property is less than 5 years old (since last transfer of ownership), or less than 1 year as a registered domicile) of the Phuket Provincial Land Office's estimated asset value or of the full value (selling/purchase-price), whichever is highest.
The Stamp Duty, Transfer Fee and Business Tax is in most cases, shared 50/50 between the seller and the buyer
- 0-20% = Income Tax (withholding tax, comparable to capital gain tax). For Entities = 1%, Individuals = 0-20% (depending on income or appreciation) at the time the transfer is made. The tax is based on the asset value, less a standard deduction for the amount of time the seller has owned the property.
LEASEHOLD:
- 1% of the "selling/purchase-price"
- What are the tax-levels in Thailand?
Please check the web-site of The Revenue Department of Thailand for the current rates!
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