Buying A Condominium in Thailand


Buying a condominium is the easiest way to become fully and legally owner of a property in Thailand. With the good information and the appropriate help from professionals like Dee One Property the process is very simple and secure.

Overall buying a condominium in Thailand is a very straightforward process but there are some information you must know before taking any decision.

What is a condominium ? Who can buy and own a condominium ? What taxation applies ? Will your children inherit the unit ? How is the management of a condominium organized ?

All these questions and many others will we addressed in this up to date Q&A document.

You will find all the condominiums for sale in Koh Chang on this page.

If you need more information, or if you want to buy a condominium in Koh Chang, don’t hesitate to contact Dee One Property.

Summary :

 

Can a foreigner own a condominium in Thailand ?

There is no restriction on nationality, and any foreigner admitted to enter Thai territory legally can purchase a freehold condominium. The process to buy a freehold condo in Thailand is quite straightforward, and only a few conditions have to be fulfilled :

  • The purchased property must be part of the 49% surface of the project which can be owned by foreigners. This can be easily checked directly with the juristic responsible at the developer office.
  • The project must be registered under the Condominium Act. This is easily checked at the Land Office.
  • The purchase of the condo has to be made with money sent to Thailand from overseas, ie. a foreign country, in the currency of the country and converted into Thai Baht. An official bank statement (“Foreign Exchange Transaction Form”, FET form, see below) will be needed. Without this document, you will not be able to register the condo on your name.

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Are all apartments subject to the Condominium Act ?

There are two types of apartment buildings for residential use in Thailand :

  • Condominiums registered under the Condominium Act with a condominium license.
  • Simple apartment buildings.

Only condominiums offer owners full ownership of their units, with a title deed issued by a governmental authority. This kind of ownership is called “Free Hold”. The other way of becoming owner in Thailand is through a long-term lease. Freehold and Leasehold are two totally different acts governed by separate rules.

For a full list of condominiums in Koh Chang please follow this link.

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What is the FET form ?

FET stands for Foreign Exchange Transaction, also known as Thor Tor Saam (Thor Tor 3). This document is prepared by a Thai financial institution (usually a bank) proving the exchange of foreign currency imported from abroad to buy the condominium. This document must be provided to the appropriate authority when buying a condominium by a foreigner. It must include at least these information :

  • The names of the receiver and the sender.
  • The transferred amount in foreign currency and in Thai Baht.
  • The purpose of the transfer has to be specified (for example “Purchase of a condo in Koh Chang”)

This document will be needed in order to repatriate funds to a foreign country (if you sell back your property for example).

More information :

 

Is the FET form always mandatory ?

For amounts less than US $ 50,000, the FET form is not mandatory. In this case, the buyer can ask the bank for a simple confirmation letter of foreign currency’s transfer and their conversion into Thai baht.

When a foreign re-seller resells a condominium to buy another condominium, he can then present the documentation supporting the sale instead of the FET form, but he will still have to meet the criteria in Section 19 of the Condominium Act and will therefore have to change the sum of the sale in a foreign currency, then again in Baht, within a Thai banking institution, or transfer to a foreign bank before returning the funds to a Thai bank for conversion into baht.

 

 

What conditions in terms of size and number of units in a condominium ?

The Condominium Act does not stipulate any specific rules in this matter. It only needs the project to be located in an area where it can be registered as a condominium (Koh Chang is one of these areas). The condominium will also have to meet environmental and height standards specific to each region of Thailand. In practice, a condominium can also be a group of low-rise buildings like villas.

 

Can a Thai company own a condominium in my place ?

A Thai company partly owned by a foreigner, with real business activity, can own a condominium. However please note that the use of a front company formed for the sole purpose of purchasing a condo beyond the 49% quota has been restricted since 2006 and is now considered as an illegal use of Thai companies.

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What about inheritance ? Can I transfer ownership to my heirs ?

The right of full ownership is granted individually to the owner of the condo but is not automatically transferable to his non-Thai heirs. A foreigner who inherits a condominium must meet the criteria defined in Condominium Act to obtain full ownership. Failing this the heir will have one year to sell the property or redeem it at the price estimated by the competent authority (usually less than the market price) to retain full ownership of the condo.

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Can a condominium be purchased as a long-term lease ?

When 49% of the total surface of a project has already been sold, the remaining units can be sold under long-term leases (30 years renewable twice, 90 years in total) to other foreign buyers. The major disadvantage is that Thai law does not recognize any inherent property rights in these leases, and the buyer is de facto a tenant who paid his rent in advance. The person who bought the property in lease therefore does not have the right to vote at general meetings of co-ownership. Finally, as an individual and personal contract, the lease becomes null and void on the death of the tenant and is not automatically transferable to his heirs.

For an example of condominium for sale in Koh Chang on a long term lease, sea this offer : 1 Bedroom Condo Sea View for Sale – Klong Koi, Koh Chang

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Can a foreign company own a condo ?

A foreign company (for example a french company) may own up to 49% of the condominium, as any foreign person. The documents of the foreign company must be prepared by a notary, translated and forwarded to the Land Office, with the FET form, as with any purchase of a condo.

 

 

How are condominiums managed ?

The condominiums are regulated by local condominium regulation and the Condominium Act. The latter specifies for example the procedure and the conditions for a building to obtain the condominium license. The rules governing the management of the condominium are stipulated in condominium’s regulation, and may be amended by the co-owners following a vote at a general meeting.

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Are there any condominium charges ?

Each condominium must be maintained and each co-owner is required to pay condominium charges, or maintenance fees, based on the square footage of his / her home. The contract must specify how much the sinking fund and the monthly (or weekly) maintenance fees are. Condominium charges are to be paid in advance, usually monthly or biweekly, although the law does not prohibit the establishment of longer periods. Condominiums may have working capital for unforeseen and unpaid expenses.

Some contracts for second hand units don’t specify the charges. In that case you can ask more details to the seller or directly ask the condominium managing company.

In any case the maintenance fees have to be proportional to the surface of the property and expressed in baht per sqm.

The fees can not be arbitrary increased without the agreement of 75% of the joint-owners.

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What about condominium meetings ?

Every condominium must have at least one management company that is appointed at a condominium meeting following a vote of the co-owners. The corporation is required to hold at least one general meeting per year and, in the case of a new condominium, at least 6 months after the condominium license is obtained.

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How to buy a condominium off plan ?

Buying property off plan in Thailand is possible and very common. But this should be approached with caution, because this process is not risk-less. The main problem related to the purchase off plan, or sale in the future state of completion, is the possibility of bankruptcy of the developer or even a lack of funds from actual buyers. The buyer off plan takes the risk of receiving a non-achieved, non-compliant property, or with a lowered quality due to lack of funding to pay for the construction. The use of an escrow third party is unfortunately not very common yet in Thailand.

However buying off plan is a good way to find the best deals, because the developers offer lower prices to encourage initial investment, thus allowing to achieve the best Return on Investment possible.

The most important part of this process is to chose carefully the developer and the Real Estate Agency. 

This condominium for sale off plan is probably the best offer in Koh chang right now : Luxury Condo in Tropical Paradise for Sale – Klong Son, Koh Chang

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What about the payment ?

Price per square meter is the key element in determining the value of an asset and comparing it with other projects in the same geographical area. In the case of an existing condominium, payment happens on the same day of transfer of ownership at the Land Office.

In the case of a purchase off plan, the price is divided into several milestones paid on the property developer’s company account, with a final payment at the time of the transfer of ownership. Payment terms are negotiable. Usually the buyer will have to pay only around 30% in the form of a deposit, and the rest will have to be paid at different stages of completion of the property.

In any case the first step is to send money from overseas (See above, FET section)

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What about additional fees or taxes ?

When you buy or sell a condominium in Thailand, several taxes and fees are imposed by the government : transfer tax, stamp duty and withholding tax. They must be paid by both parties at the local land office.

The coasts are shared between the buyer and the seller and are specified in the terms of the sales contract. Usually the whole taxes are around 5% of the valued price of the property. The way the taxes are split between both parties can be negotiated.

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Can I rent out my condo ?

Unless condominium local rules prohibit it, you are allowed to rent out your property in Thailand. If you run a rental business then you will have to register a company and business taxes will apply.

We recommend you to sign rental agreements, it will be useful in the event of needed legal action.

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What title deed is associated with a condominium ownership ?

The official title deed associated with a condominium ownership registered under the Thailand Condominium Act is issued by the Land Office. The document contains :

  • The identity of the owner of the unit.
  • Details about the condominium unit : width, height and length, unit name, building number, floor, etc.
  • The ratio of ownership of common areas.
  • Details about the land of the condominium (deed number, etc.)
  • The identity of developer
  • etc.

The official document must stay in your possession and a copy is retained at the Land Office.

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How to sign a sale agreement ?

The sale agreement must mention the responsibilities of the seller and the buyer. The sale agreement must specify the price, due dates of payment, date of transfer of ownership, precise description of the condominium, sharing of transfer costs and other taxes, guarantees. A contract signed with a real estate developer is regulated by law and must comply with the Condominium Act and consumer protection laws. The transfer of ownership takes place at the local Land Office at the same time as the payment of transfer fees and other taxes.

Dee One Property provide such contracts and help you during the negotiation stage.

 

 

Find a loan for buying a condo ?

It is generally very difficult for a foreigner to obtain a loan from a Thai bank. Only foreigners residing in Thailand and working with a solid history can get a loan to buy a condominium. But banks are generally reluctant to lend money to non-Thai people. A solution is then to go through banks in the country of origin (which claim a mortgage of a real estate property in the country of origin), or branches of Thai banks located in Singapore.

Some developers also propose financing solutions.

 

Other documents needed ?

When buying a condo, the seller must give a letter of guarantee issued by the legal person representing the condominium, which stipulates that the apartment sold is part of the 49% share allocated to foreign owners, as well as a letter stating that the owner is up to date of the payment of the co-ownership charges.

The other documents required are the identity cards or passports of the seller and the purchaser, marriage and / or divorce certificates, a power of attorney if the purchaser can not be present personally, a bank check, and cash to pay transfer fees and taxes.