How to Purchase a Villa or House in Thailand?
Although buying a house or villa in Thailand may include the purchase of land, there are restrictions on foreign ownership of land in the country.
At present, foreigners are not permitted to own land, but there are exceptions and historical ‘workarounds’ that provide some form of legal tenure, if not quite full ownership of land in Thailand.
A lawyer can assist you in understanding and complying with these exceptions to legitimize your land purchase. Some well-known exceptions that permit such a purchase are:
- Foreign buyers can register and transfer their ownership of a house separately from the land on which it is built.
- Transfer processes must follow Thailand’s Civil and Commercial Code.
- Transfer details must be in writing and registered with the Land Department’s branch or provincial office.
- Existing buildings that are separate from the land can be sold and transferred, but only if all standard procedures at the Land Office are observed.
It is essential to note that Thailand is primarily a cash-buyer market. Mortgages and bank loans for foreigners in Thailand are difficult to obtain unless acquired in the name of a Thai national. Without further ado, let’s discuss the steps to buy a house in Thailand.
Step 1: Finding a House
Given the surge in foreign ownership of real estate in Thailand, there are several things to consider when buying a house or villa. Always consult registered lawyers and reputable real estate agents in Thailand, as they can provide reputable advice and safeguard your interests when purchasing real estate.
Remember that many problems that arise in Thai house-buying can be avoided during the property search by investigating relevant regulations and pertinent laws.
Step 2: Setting up your Thai Company
- Before signing any documents, consult a lawyer once you have chosen a villa or house to buy. Foreigners may not own land/houses in their name; however, a Thai-registered company in the foreigner’s name may own the house.
- Thailand offers various business structures, though the Thai Limited Company is the most popular. American citizens can legally own property through the Thailand Amity Treaty. Since there are many types of Thai company structures that comply with laws, it’s recommended to consult a real estate agency and qualified lawyer to discover which company suits one’s needs best.
Step 3: Buying a House
When both parties agree on a price, a trusted lawyer should carry out a title search and verify the contract before signing.
The title search is vital as it assures the buyer that the seller is the legal owner of the property, and that all paperwork is in order. It is also crucial to consider the kinds of Title Deeds in Thailand.
A Freehold Title Deed (Chanote or Nor Sor 4) provides the holder with complete ownership rights over the land, allowing them to use or deal with it exclusively.
There are three types of titles available:
1. Nor Sor 3 Gor – Granted to land that is awaiting full title, this document permits the land to be sold, transferred or mortgaged in the same way as land with a freehold title deed, as long as it is ready to become a full title deed.
2. Nor Sor 3 – This title differs from Nor Sor 3 Gor, as the land has not yet been measured by the Land Department and therefore lacks exact boundaries.
3. Possessory Right – This type of title deed is not recommended as it has not been substantiated by the Land Department, but only with the Local Administrative Office through tax payments.
If you are buying a house off-plan, it is important to secure legal advice prior to investing in pre-construction projects. Additionally, transfer fees for your condominium and Thailand property taxes will apply.
Step 4: Transferring Ownership
Transfer of Ownership When transferring ownership of a house or villa in Thailand, the procedure must be conducted at the land office. This government authority is the only one approved to administer and complete a transfer of ownership for a building. The necessary documents for conducting a transfer of ownership are as follows:
1. Thai home and official documents related to real estate.
2. Passports/ ID cards of the owner and buyer.
3. Land title deed.
4. House book (Tabien Baan).
5. Building permit.
The transfer of ownership for a house or villa is classified as an immovable property that is subject to income withholding (personal or corporate income) tax, transfer fees, stamp duty, and specific business tax calculated based on the registered sale value or appraised value.
The government’s assessed (appraised) value of a house or villa used by the land office depends on factors such as location, number of floors, floor space, and types of materials used.
While this guide is not a substitute for actual law, it can help you prepare for buying a home in Thailand. We always recommend confirming this information with a real estate lawyer since regulations are subject to change at any time.
Ultimately, it is best to do plenty of research and consult with reputable agents and lawyers before purchasing property in Thailand.
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