”Can foreigners buy property in Thailand? How do I buy a property?” and “How do I get a mortgage/loan in Thailand?” are questions that we are often asked. For many, property financing for foreigners can be difficult. For those with a Thai spouse the process is simpler. In this article we will take a look at our options and take a brief look at the process with regards to buying a condo in Thailand:
Firstly, let’s begin with stating that buying a condo is far simpler than purchasing land and building upon said land (that’s a another blog for another time!). The 1979 Thailand Condominium Act (amended 2008 B.E. 2522 (1979) as amended 2008) enabled foreigners to own their condos outright with freehold. In fact, they can purchase more than one. There are, however, a few stipulations; namely foreigners can’t own more than 49% of condos in any one building. ‘’Section 19 of the Condominium Act (as amended by No. 4) provides that aliens or alien juristic persons may own up to forty-nine percent of the total area of the units of the condominium at the time the registration application for the condominium was filed.’’
It is worth noting that apartments are not governed by the same act. Apartment buildings are owned fully by one entity. One person or a family or one company will own the entire building. You cannot buy a freehold unit within that apartment. These units are for rent only from the owner and you will find no protection under the Condominium Act in this case.
51% of the total condominium project must, under the Condominium Act, remain under Thai ownership at time of registration. There are also other stipulations in the act as to which foreigners can buy condos as you must be in the country legally. It is worth noting that (if you purchase a condo over 10 million Baht) you can apply for a one year investment visa but, in short, you will need a good lawyer to advise you through the entire process. It may sound daunting, but in reality it isn’t. Thousands of ex pats have been through the process in the past and will continue to do so in the future.
Non Thais can also buy leasehold properties as 30 year leases can be registered with the land department. 30 years is the maximum duration permitted under Thai law but they can usually be renewed as stipulated under Thai law. Leases are governed not by the Condominium Act but under the Civil and Commercial Code, sections 537 to 571 the hire of ‘’Hire of immovable property’’. There are various differences between buying leasehold and buying freehold – you may not get any voting rights at the condo for a start. It is also stated that the lease is terminated upon the death of the lessee so, again, good council is vital and will guide you through this process.
So, how do we actually get the finance to purchase the condo? Firstly, as in any country, you are going to need to do your homework! Rates very between banks and some banks even favour certain developments by respected developers.
If you can purchase the condo outright the process is pretty simple. Open up a savings account at pretty much any Thai bank and they will assist you in gaining SWIFT codes need for any transaction. The funds will need to be transferred into Thailand as a foreign currency, the land department will not register condo ownership unless it’s done this way! There is no need to panic however as the bank will transfer the funds into Thai Baht for you. The funds can also be paid directly to the developer but transferring to your Thai bank account is the safest option; you will also often save on additional fees by doing it this way as intermediary banks in Thailand may charge additional fees. Your Thai bank will provide a Foreign Exchange Transaction form for amounts over $50,000 or the equivalent of this amount in other currencies. For amounts less than $50,000, the bank will issue a FOREX credit note and a confirmation letter. These can be submitted to the land department for ownership registration.
Payment structure and “all down” payments will vary between developers, project and contract terms so you will need to contact your developer for the correct information. It is also worth noting that that the buyer’s name (that was used to open the bank account) must match those on the purchase contract. The names in Thai and English must be absolutely identical. It’s always handy in Thailand to have multiple copies of your passport and photos as they are usually always required for official forms.
The above are simple guidelines with regards to buying a condo, but how do we actually go about getting finance?
If you have a look at the Thai banks online you will note that the finance options are for Thai nationals only. However, if you have the right credentials; long term employment in Thailand with a work permit, good salary (to name but a few stipulations) along with a lot of perseverance it can be possible to get finance. You will never know many of these loans are being approved or even if they are still being approved other than trying it yourself or relying on online tittle tattle…
Offshore loans are another way of financing your purchase. UOB Singapore (along with other offshore banks) are currently offering International Home Loans for Thailand. According to the UOB website, they are currently offering up to 70% of the purchase price. The loans are available to all foreigners aged 21 and over but the criteria is strict: The applicant must have a minimum salary of 100,000 Singapore dollars (at the time of writing that is calculated as 79,894$ per year or 48,534 pounds per year). UOB have branches available throughout Thailand so they should be able to offer advice. Rates will vary between banks as will the amounts lent.
Foreigners married to a Thai citizen will have a wide range of finance options available to them. They will also be permitted to purchase land or a house, depending on their situation and on their finances. The loan will usually be in the Thai citizen’s name with the foreigner as guarantor. As previously discussed, if the loan is for the purchase of a house or land it will need to be in the Thai citizen’s name. Documentation is usually also needed; marriage registration and proof of income (if the foreigner is main income earner a work permit is also generally needed). If you are unsure about the stability of the relationship it would be advisable not to follow this route as many foreigners have been burnt and left with nothing as a result of the marriage breaking down.
In conclusion, it’s often difficult to know what’s what in Thailand. Banks seem to change their policies on a yearly basis and vary wildly between each other. Often, the same banks seem to have different policies between the branches themselves. It’s not uncommon to be told “no-impossible!” in one branch and then “yes” in another. If you have the deposit and the means of meeting your monthly requirements however, buying a condo or a house in Thailand can be done with a little perseverance.
If your looking for advice on how to purchase a condo in Bangkok please contact us now