Can foreigners buy a condominium unit in Thailand?
In Thailand, foreigners may only own a condominium in his/her own name. Foreigners can take ownership of a condo by either purchasing a condo unit with a freehold title or entering into a long lease agreement, commonly known as "Leasehold". Foreigners may acquire freehold ownership of a condo unit within the set foreign ownership quota of a condominium. By law, foreigners can own up to 49% of the total saleable area of a condominium project. The remaining 51% can be acquired under leasehold ownership. Leasehold gives the right of use and possession of the unit for a set period of time and is fully transferable. The maximum lease period is 30 years with additional 30 years renewal. In most cases, developers of condominiums will offer a total of 90 years ownership (30yrs + 30yrs + 30yrs).
There are very few requirements for buying a condo in Thailand as a foreigner. However, a foreigner must remit foreign currency into Thailand in order to purchase a condo.
What are the taxes associated with and additional running costs to owning a condominium?
There is a property tax associated with owning a condo depending on the property price. All co-owners will also have to contribute to the general upkeep and running of the condominium, this required payment is known as a CAM Fee (Common Area Maintenance Fee). Your fee will be calculated per month based on the total square meter of your condominium unit.
Example: CAM Fee 50 baht per sqm, per month, condo unit size 100 sqm, total yearly fee = 50 baht X 100 sqm = 5,000 baht per month X 12 months = 60,000 baht per year.
Condos also have a special reserve fund for major repairs and upgrades of the building, this is known as a "Sinking Fund Fee".
Can foreigners buy land in Thailand?
If the foreigner wishes to acquire land and build a house, he/she should obtain a long term lease on the land (for a period not exceeding 30 years each term). Read more about "Leases in Thailand".
The foreigner should apply for the construction permit to build the house in their own name. This way the foreigner owns the house and has a secured long term lease on the land. The lease can be written with the option to reassign to another person (if you sell), ability to sublease and with a purchase option (should the law change in the future to allow freehold ownership by the foreigner). Therefore, a lease is the most common legal method for the foreigner to acquire property in Thailand.
Am I allowed to build and own any structure on land?
Legally, any building is considered as being a part of land over which such building is constructed. However, a building may be considered as a separation part when it is a tenant of land who builds a building under a leasing agreement. Therefore, a foreigner may own any building on his rented land in Thailand.
If your spouse is Thai, and you are planning to build a house on his/her land, you are recommended to sign a lease agreement with your spouse indicating that you are a tenant. This way, you shall have a joint ownership over such structure together with your spouse but not the land.
How to Buy Property through a Thai Company?
Some property buyers may prefer a holding structure, with more ownership rights than a leasehold title. In this case, it is possible to set-up a Thai company for property acquisitions, this method sits in the "grey-area" of the Thai legal system. The Thai government and the Land Offices overseeing property transfers across the country, do not encourage this practice.
For a company to be classified as a "Thai Entity", at least 51% of the shareholding needs to be held by Thai nationals. The main concern of the authorities is the unauthorized use of "Nominee Thai Shareholders", that are essentially "fake investors" used to facilitate property purchase.
However, provided foreign buyers comply with the law (Using "real" shareholders/ Thai partners), this option offers a good degree of indirect ownership and control.
This ownership structure is commonly used by investors to purchase landed property such as villas with their spouse or foreign developers looking to acquire developable land plots.
Should foreigners buy a condo or a landed property?
Ultimately it comes down to the buyer’s personal lifestyle preferences or investment objectives. Landed property oftentimes offers amazing value on a price per square meter basis; there is also the extra advantage of greater control over the land and the building. Comparatively condominiums due to their communal nature, can severely restrict refurbishments, renovations, general privacy and control. On the other hand, condominiums offer the most straightforward and liquid property type, offering foreign buyers a hassle-free purchase with a simple "exit strategy". The ease and flexibility offered by condominiums make it an appealing choice for many foreign buyers.
Thank you Siam Legal International for the information