How can a foreigner legally purchase a residential building in Thailand
Over the past 15 years or so, buying an apartment in Bangkok has become a fad among foreign real estate investors and those who simply want to settle in the Thai capital. A non-Thai citizen can legally hold freehold ownership of one or more condominiums in the Kingdom. However, there are certain conditions that must be met for a foreigner to own an apartment in Thailand.
Explanation of foreign ownership
Overall, buying an apartment is quite a simple and easy process once you know the right procedures to follow. Also, at the time of writing, there are no ownership restrictions based on nationality or specific visa categories. In fact, any foreigner who can legally enter Thailand can buy and own a condo outright, and the purpose of this article is to break down these procedures in an easy-to-understand format.
Thailand Condominium Act 2008, ActB.E. 2522 (1979)
If you are a first-time buyer and are still unfamiliar with local property laws, then this breakdown will help you familiarize yourself with the Thailand Condominium Act 2008 (Amended), which sets out the rules and regulations that must be followed. observe
Here is a “brief” summary of these requirements, although other restrictions apply:
- A foreigner has entered Thailand legally
- Freehold of a dwelling unit when built on land of less than five rai
- The laws relate to certain projects in the municipal jurisdictions of the Kingdom
- The apartment ownership of a foreigner cannot exceed 49% of the total project
The contract of sale
A typical sales contract between the parties will include the following six points:
- The exact details of the apartment being purchased
- The exact details of the parties involved
- The agreed price, payment schedule and deposit, if applicable
- The date of transfer of the apartment to the Land Office in Bangkok
- Responsibilities for all transfer fees and any taxes
- Both seller and buyer warranties and any due diligence issues
The financial transaction
According to the Condominium Law 2008, in respect of non-residents of Thailand, those purchasing condominium units in the Kingdom must remit all payment amounts for the unit(s) from abroad up to the full value of the property. The buyer will then need to obtain a Currency Transaction Certificate (TT3 or Thor.Tor.3) for each payment from the receiving bank. In order for the foreigner to register the condominium, these certificates must be shown to the Thai Land Department in Bangkok.
Payment “must” be remitted into the country as “foreign currency” and not in Thai Baht.
For remittances, Thai banks will only provide a ‘Foreign Transaction’ certificate for amounts over US$20,000. For smaller amounts, the bank will issue a credit note. This credit note can also be presented to the Land Office in Bangkok to register the condominium, but must be accompanied by a confirmation letter from your Thai bank.
What if you don’t have a Thai bank account?
If you do not have a bank account in Thailand, then you can transfer the funds directly to the owner of the condominium you are buying, or to the account of a third party such as a Thai lawyer or other legally registered representative in the country.
However, we strongly recommend that you transfer the funds directly to your own bank account here in Thailand whenever possible and then obtain a Foreign Exchange Transaction Certificate from the bank’s head office in the capital. All certificates and/or credit notes and receipts related to the condominium must be kept in a safe place together with all letters/documentation from the Thai bank until ownership of the condominium has been successfully transferred.
The payment procedure
In order to obtain a certificate of foreign exchange transaction in Thailand from a Thai bank, you will need to ensure that the following four instructions are followed:
- The name of the payer must be the same as the buyer of the Bangkok apartment (as stated in the S&P agreement). Please fill in the full name and address of the sender and the beneficiary.
- Money is transferred as foreign currency. Do not convert to Thai Baht before making a transfer. The conversion will be done by the beneficiary bank in Thailand.
- Please indicate in the transfer instructions that the purpose of the transfer is “To purchase a condominium in Bangkok, Unit No. X, at: (Condominium building name)
- Please indicate the overseas charges and the beneficiary for each payment.
Reference to point 3 above: It is important to use the correct wording to avoid misinterpretation by the Land Department of Thailand. For example, the word “apartment” (a term often used in other countries) has a completely different meaning than “condominium” in Thailand.
The transfer of ownership
Before the transfer of ownership you will be informed of the total amount due, including any minor amenities or utility deposits. The following two instructions must be followed:
- If the last payment was NOT funded by a bank, then this amount must be remitted to Thailand just like the previous payments.
- If the final payment IS financed by a bank, then this amount must be paid by cashier’s cheque, which will then be replaced with the title deed of the Thai condominium on the date of transfer of ownership.
As with most bureaucratic procedures and large financial transactions, there is more to do than our brief outlines in the article. However, with the help and guidance of a good legal representative, buying an apartment in Bangkok is a fairly painless procedure. This is something that is reflected by the large number of foreign condominium owners in the Thai capital and other municipal jurisdictions in the country.
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