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Thailand Property Taxes

for Condo, Villa or House


Thailand property taxes and how they are calculated in Thailand. Speak to one of our property lawyers with regards to your property taxes in Thailand.

THAILAND PROPERTY TAXES Transfer fee Stamp Duty Withholding tax !usiness tax 2% of the registered value of the property 0.5% of registered value. Only payable if exempt from business tax % of the appraised value of the property "."% of the appraised value of the property if selling #ithin 5 years. This applies to both individuals and $ompanies. WHICH PARTY NORMALLY PAYS !uyer Seller Seller Seller AMOUNT 2% of registered value 0.5% of registered value % of appraised value "."% of appraised value

TAX Transfer fee Stamp Duty Withholding Tax !usiness Tax


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Buying a Villa
in Thailand
STEP 1 : FI !I " # H$%SE I TH#I&# !

%eal &state in Thailand has ta'en off in the past de$ade or so #ith more foreigners( #ishing to live in Thailand or ma'e Thailand their se$ond home. )any #ish to o#n a house* and it is important that #hen pur$hasing a house to al#ays ma'e use of registered la#yers in Thailand and reputable estate agents #hen buying a house. See the Thailand Real EstateOutloo'* the glossary of Real Estate Terms and the Real Estate FAQ #hen you start your sear$h for a house in Thailand* be the house in !ang'o'* +attaya* +hu'et or ,ua ,in. !e fully a#are that many of the problems that do arrise from buying a house in Thailand $an be avoided early on in the property sear$h.-ou might need to read the Real Estate pitfalls in Thailand #hen going out on your sear$h. .s' the right /uestions to avoid $ostly litigation.

STEP ' : SETTI " %P ($%) TH#I C$*P# (

On$e you have de$ided #hi$h house you are going to pur$hase* al#ays $onsult a la#yer before signing any do$uments. 0oreigners may not o#n a house in their name1 ho#ever their Thai registered company may o#n the house. There are different forms of business entities in Thailand. The most $ommonly used is a Thai Limited ompany. There is $ertain business registration $riteria(s for the limited $ompany. The Thailand Amity Treaty is also still in existen$e for .meri$ans and there are also tax $onsiderations so $he$' orporate Tax in Thailand if you are going to do more than o#n a house or need a Thai !ork "ermit.

STEP + : B%(I " # H$%SE I TH#I&# !

On$e #e registered your Thai Limited ompany #e do the follo#ing amongst other property ser#ices so spea' to ourproperty lawyer today. They #ould do a title sear$h and $he$' the $ontra$ts before signing. .lso note the type of Title $eeds in Thailand. 2f you are %uying a house off plan* you #ould need legal advi$e as to buying in pre construction pro&ects. There is also the $ost of transfer for your $ondominium andThailand property taxes. 3se the property transfer $al$ulator to $he$' your fees payable. See the $ompressed version on%uying real estate and the most common property pro%lems. .l#ays $onsult a reputable firm of attorneys before you embar' on the pro$ess of %uying a house in Thailand. 2f you are loo'ing at finan$e and o%taining a mortgage %ond in Thailand then as' online for more details.

Property In,est-ent
in Thailand

The num%er of foreign nationals owning properties in Thailand is continually growing. The ma&ority of these properties are %eing used as a primary residence %y long'term residents %ut there is also a significant num%er of expats %uying properties for rental income in Thailand. Thai property can potentially yield strong rental returns particularly in main cities such as (angkok or hiang )ai and in well de#eloped tourist destinations such as *ua *in+ "huket and "attaya. )any property owners are turning to rent in these areas in order to maximi,e their property-s true worth and also to take ad#antage of the rapidly de#eloping rental markets. I!E#& )E T#& P)$PE)T( .nlike the ma&or cities such as (angkok+ rental properties in tourist areas are targeted towards short to medium term rents with #aria%le rates depending on the season. /n (angkok+ properties typically rent out to the expat community looking for medium to long term stays. *ere+ studios or one %edroom units in the ($ area are most sought after usually %y international companies looking to house their foreign employees. Two to three %edroom units on the periphery of the ($ are also popular among foreign nationals with families. "roperties that are highly sought after in tourist areas+ howe#er+ ha#e a historical tendency to %e more la#ish as those on holidays tend to spend more. They will %e looking at luxurious condominiums+ ser#iced apartments or a 0uiet %ut grand #illa o#erlooking the seaside. They will also expect amenities to %e e0ually extra#agant with at least a swimming pool+ gym and an entertaining area. /t is+ therefore+ important to know what sort of rental property you are prepared to in#est in. /t is often a good idea to do some homework as to the rental #alue of the area you wish to in#est in general and compare this with other areas in the region. Location is o%#iously important %ut there are other factors which are e0ually significant such as the num%er of %edrooms+ access to transport or shops+ price per s0uare meter+ facilities a#aila%le+ maintenance fees on the property+ &ust to name a few.

)E T#& P)$PE)TIES 1ow that all the hard work has %een done and you are the proud owner of a lucrati#e in#estment property in Thailand+ there are still a few more legal matters that should %e %rought to light. Renting can either %e a straightforward process or it can %e an a%solute nightmare. )any countries around the world ha#e de#eloped laws to regulate the+ at times+ strenuous relationship %etween the landlord and the tenant. /t pro#ides measures of protection and certainty for %oth parties to make rental arrangements as fair as possi%le. At the present moment+ Thailand does not ha#e a Landlord and Tenant-s regulation per se and does not really ha#e a system which regulates this need. As such+ the laws go#erning this area are ad hoc at %est with contract laws offering the %est protection for either side in the arrangement. The general laws of Thailand regarding landlords and tenants are largely pro'landlord. 2ery little legal protection is afforded to tenants. This is due again to the lack of laws and ministerial regulations go#erning the renting of properties. $ue to this+ contracts ha#e a tendency to %e more %iased towards the stronger party+ and in most cases+ the landlords as property owners are usually the stronger party. This may seem like good news to landowners %ut they may still experience difficulties with tenants %ecause it is sometimes difficult to enforce legal o%ligations due to a lack of enforcement rights and lengthy procedural rules. Therefore+ e#en as a landlord and holding some legal superiority in contract agreements+ it is often %est to make a contract as fair and reasona%le as possi%le. 1ot only will this reduce future pro%lems with the tenants %ut it also ser#es as a good start to a long term %usiness relationship with them. Renting can %ecome 0uite a gruesome process and making things fair right from the start goes a long way in making the process a lot more satisfying for all in#ol#ed.

P)$PE)T( CHEC.&IST . There are no standard contracts for rental agreements in Thailand. /t is possi%le to purchase a pro forma one page contract from the local stationery store %ut this is sometimes only a#aila%le in Thai and it is+ in many ways+ 0uite inade0uate. This is especially the case if you are renting to a foreign national who are expecting something a little more comprehensi#e+ particularly if large sums of money is in#ol#ed. Therefore+ some salient points which should %e added in a rental contract include the following3 !EP$SITS Thailand+ unlike the .4 and other &urisdictions+ does not ha#e a tenant deposit protection scheme. $eposits+ howe#er+ are co#ered on a general %asis %y the i#il and ommercial ode of Thailand. Therefore+ it is important to draft the conditions of the return on the contract explicitly. The normal period for the return of the deposit is one month after the termination of the lease. Any unpaid utilities can %e taken out of this amount as well as any damages outside of normal 5wear and tear-. /f damages are taken out+ a specification of the damage and its cost should %e outlined %y the landlord and re#iewed %y the tenant. PE)I$! $F )E T Ensure that %oth parties are aware of the duration of the rent. Any rents o#er three years must %e registered as a lease under the i#il and ommercial ode at the Land 6ffice and su%&ect to registration fee and stamp duty. E/TE SI$ $F )E T#& #")EE*E T 6nce the rental period comes to an end+ there should %e an option clause for the tenant to continue rent if they wish %y gi#ing notice. A contingency clause should also %e added to outline the landlord-s rights should there %e no notice gi#en. Rental re#iews are not common in Thailand %ut is %ecoming increasingly popular+ particularly for commercial properties. %SE $F P)E*ISES )ake sure that the contract states what the premise can %e used for. /f it is merely for residential purpose+ then it should state so. This normally means that tenants are still allowed to set up a home office %ut are not a%le to ha#e a company registered to the property-s address. )I"HTS $F TE)*I #TI$ List out all the conditions where either party can terminate the contract e.g. a fire+ natural disaster+ failure to pay rent or failure to fix the air conditioner. Ensure that a reasona%le notice clause is also added along with remedies a#aila%le to the aggrie#ed party. onsider ar%itration or other forms of dispute resolutions. *#I TE # CE # ! *ISCE&&# E$%S FEES )ake clear which parties are responsi%le for the maintenance of the property. /t is common for landlords to %e responsi%le for ma&or repairs %eyond reasona%le wear and tear. I S%)# CE Landlords usually take out insurance on the structure of the %uilding itself. Tenants should %e responsi%le for their own home and contents insurance. FI #& 0$)! $espite ha#ing a watertight agreement with your tenants+ there is still no guarantee that any num%er of things can go wrong. As mentioned earlier+ enforcement and due process can %e like an unruly tiger in a cage. E#erything seems well when the cage is locked %ut once its opened+ then it can get 0uite out of hand. 1e#ertheless+ all good in#estments re0uire a slight degree of risk7 otherwise we would %e %etter off keeping our money in the %ank or under the mattress for that matter. The trick is+ of course+ to make calculated risks. Thailand is rapidly de#eloping and although it is still early to see the effects of the latest election result+ the economy is steadily progressing. This+ in turn+ affects consumer confidence which+ in turn+ traditionally means higher rental yields.

11 Top *ista2es
3hen 4uying property
There are certain pitfalls when %uying property in Thailand. (uying Real Estate is an experience that should %e taken with some ad#anced planning and forethought. )any foreigners come to Thailand to purchase property for #arious reasons 3 for their retirement+ as a second home or for in#estment purposes. "urchasing a second home is gaining popularity in many places in the world. For example+ in 899: &ust o#er a third of all homes owned %y .4 citi,ens a%road were located outside Europe. Thailand is fast %ecoming a destination of choice as a location for a second home. /n this article+ we will look at ten pitfalls which are most common in purchasing property in Thailand. $ TIT&E SE#)CH A comprehensi#e examination of title deed recorded at the Land $epartment should %e done prior to placing on a deposit or signing of a reser#ation agreement. ;ou need to #erify that the Seller has clear and legal title of the land %efore you enter into any contractual agreement. The title search will trace the land to its first possession+ as well as checking for any encum%rances such as liens+ leases or mortgages on the title. This in#estigation will also #erify ,oning+ en#ironmental and planning codes in the area. )oreo#er+ any mortgage+ liens or encum%rances will %e disco#ered during this process. There ha#e %een a num%er of cases where foreign %uyers ha#e purchased property only to disco#er later that they are restricted in terms of structural height on the land and therefore rendering the land #irtually worthless. This is especially true for %each resort communities where there are height limitations closer to the %each. This is the num%er one pitfall since a title search can %e completed within a few days. Failure to conduct this step is a gra#e error and could %e fatal to your plans to %uild your dream house on that wonderful piece of property. F#I&%)E T$ C$ !%CT !%E !I&I"E CE E#ery financial transaction re0uires some sort of due diligence on %ehalf of the purchaser to #erify that it is a sound in#estment. !hen you purchase shares of a listed company in the stock market or a mutual fund you will generally research the profile and performance of the company or fund. The same is true when you purchase a property from a de#eloper. ;ou should check with the pre#ious %uyers to see if they are satisfied with the 0uality and time frame of the construction. /f you don-t ha#e time to spend on checking the history of the de#eloper+ a local lawyer near the de#elopment will know or can check the pro&ect+ who their directors are and their performance history. This $ue $iligence report will also outline all the information consisted in a title search mentioned a%o#e. B%(I " 0ITH$%T # &#0(E) /t is often possi%le for indi#iduals to purchase a property in Thailand without the ser#ices of a local law firm. This may %e risky unless you are familiar with the country+ the language and its legal system. ontracts in Thailand do not always adhere to the international standards that we are used to %ack home and may seem 0uite unfamiliar to us hence why prior to purchase you should take the time to sit down and discuss the purchase process with a lawyer or a solicitor. That is why %efore you sign any deposit agreement or contract+ you should take some time and sit down with a lawyer or solicitor to discuss the process. ;ou need to know the correct legal process in Thailand for a foreigner to ac0uire property. Remem%er that you are spending part of your life sa#ings to ac0uire this property and you must carefully plan your steps in the process. ;our lawyer %ack home can gi#e you general ad#ice a%out the contracts and agreements7 howe#er they will not %e familiar with the country-s laws as they may not ha#e the experience in dealing with matters here. B%(I " 0ITH$%T # EST#TE #"E T (ack home+ !e are always told that when we in#est in property+ we should always in#est in an area that we are familiar with. This is %ecause property markets are affected %y so many #aria%les. /t is important to know the market and manage the potential risk which may %e in#ol#ed in any transactions. /n#esting in Thailand is no different. ;ou will need a local expert who is experienced in real estate transactions in the local area that you intend to make your purchase. The agent knows how to communicate in Thai and they-re familiar with the location and the general geographical area. They can show you many 0uality properties in their in#entory %ased on your needs and desires. Typically+ a good agent will weed out the poor 0uality units. They want satisfied clients and they will a#oid pro%lematic de#elopments. Think a%out it3 you may not really know the community and it would %e wise to find

someone who has in'depth knowledge and experience with the property market. The most telling %enefit of a using an estate agent is that they will act as a conduit %etween you and the seller. They will o%tain a fair price for you and act on your %ehalf to respect your %est interest throughout the entire process. Se#eral international estate agent firms ha#e recently esta%lished themsel#es in Thailand. This pro#ides you access to the same international standard of %usiness practice as in your home country. P%TTI " THE !EP$SIT !$0 T$$ E#)&( Sellers and agents o%#iously want to sell properties. !hen you ha#e found the ideal property and you are satisfied that it will meet your expectations+ the usual process in a transaction is to put down a reser#ation fee or an earnest deposit. /n return+ the seller or agent will reser#e the property for you and %egin the process of drafting the contracts for the ac0uisition. This is normally a nominal amount of <9'<=> of the purchase price. This will in most cases %e deducted from the original purchase price+ if the contract is fully performed %y %oth parties. *owe#er+ in the e#ent that you are not going to go through with the purchase+ it is the Seller-s right to retain the initial reser#ation deposit. /f in case+ it is through Sellers default+ this amount is usually refunda%le. (e sure to retain a receipt and terms of agreement in respect of the reser#ation deposit. This is not always the case as sellers and agents sometimes keep this fee for the opportunity cost in#ol#ed while the property was reser#ed. .nless you specifically draft an ?exit@ clause in the deposit agreement+ for example ?su%&ect to a clear title@ or ?su%&ect to agreement on contract terms+@ the money deposited is non'refunda%le. Exit clauses can %e items of fundamental importance such as 5su%&ect to clear title7 or 5su%&ect to a new title deed %eing issued- and so on. B%(I " I # *IS*# #"E! P)$5ECT Se#eral areas in Thailand ha#e recently seen a surge in new property de#elopers arri#ing on the scene to %uild homes. These de#elopers do #ary in si,e and experience. There are many new de#elopers who see the potential in property de#elopment as a lucrati#e %usiness in *ua *in and decided to #enture in this industry. They may not ha#e the necessary experience to manage the pro&ect so you would often see delays and other fundamental pro%lems. *owe#er+ these de#elopers do tend to offer much %etter prices and are more flexi%le in their approach to cater to your needs. The larger de#elopers+ on the other hand+ are more esta%lished and many of them are pu%licly listed companies. They ha#e the resources+ experience and expertise in completing construction pro&ects on time. They generally will not negotiate on the price of the property and some do not offer any ad#ice on #ariations that you would like to make to the designed plan. They are+ therefore+ less flexi%le %ut the commercial risks are much less. The key factor is to find a de#eloper in which you feel comforta%le with. /t is recommended to check their pre#ious pro&ects for the 0uality of their work and ask 0uestions from people who ha#e purchased from them %efore. ;ou will know them %y the fruits of their la%our. C$ SI!E) THE S%))$% !I " #)E# /f you purchase in a popular de#elopment+ most likely the de#eloper will %e eager to repeat their success and start a "hase // right next door. ;ou should plan for this accordingly in your plot selection. /t would %e most unfortunate after ha#ing waited for one year while your new home to %e %uild is %eing %uilt+ and then to mo#e in to endure another one or two years of construction noise next door. ;ou must also %e aware of the surrouding areas in general so as to a#oid %lockage of #iews from other %uildings if you are going to purchase on a high floor. CH$$SI " $ THE B#SIS $F P)ICE There are many #aria%les in#ol#ed when e#aluating the price. /n general+ you may wish to check the prices of ad&oining pro&ects in the surrounding area and that would gi#e you a fairly good idea whether you are paying too much for your property. (ack home+ .sually in foreign countries+ it is possi%le for us to check the #alue of #arious properties through a regulated %ody and also %y looking at tax receipts of a particular area. Thailand is ad#ancing in this area /n Thailand+ you are a%le to check these+ *owe#er+ you will still see large discrepancies %etween the go#ernment-s assessed #alue and the actual price paid for a property. F$)"ETTI " ($%) HEI)S /t is strongly recommended that you ha#e a Last !ill A Testament prepared in %oth your home country and in Thailand to include your newly purchased property. /t is not a pleasant thought to think of your demise7 howe#er you should plan in ad#ance regarding your estate so the affairs are in order in the unfortunate e#ent of your passing. The last thing you want to do is cause additional stress to your family during this period. ;our property in Thailand %ecomes of #alue once you sign the contract and make an initial payment. *ence e#en %efore the hando#er of the property you+ will ha#e an asset to consider for your estate planning.

The document will detail your assets in Thailand+ such as property+ %ank accounts+ #ehicle+ and personal items. Typically upon the death of a foreigner in Thailand+ the go#ernment officer will ask the family for a copy of a !ill or they will seek the deceased person-s lawyer or executor for this document. *a#ing a !ill drafted in your home country to co#er assets in Thailand may %e pro%lematic and %urdensome to your family as documentations will need to %e translated+ notari,ed and appro#ed %y a go#ernment %ody. !e /t is highly recommended that you ha#e a separate !ill for your assets in Thailand. /t may %e interesting "lease also note that Thailand does not ha#e any inheritance tax in general7 howe#er+ the %eneficiary will ha#e to pay certain fees paya%le to the Land department upon transferring of title+ to effect their name in the title deed. .

Co--on Pro4le-s
3hen 4uying property
THE )E#& EST#TE I !%ST)( IS % )E"%&#TE! Thailand has no limited regulations go#erning the real estate industry. As a result+ ;ou ha#e limited protection concerning the ma&ority of real estate transactions+ and you could %e charged unreasona%ly high fees and commissions whereas in the !est other countries+ most agents pro#ide full disclosure of fees and commissions. #V$I! THE $ E ST$P SE)VICE CE TE) This sort of handy ser#ice center offers easy ser#ice to ac0uire land. There are many one stop ser#ice centers that offer a #ariety of ser#ices for ac0uisition of property ranging from the %eginning steps such as choosing a property of interest+ to the final steps of the transfer of ownership. These one stop ser#ices should %e a#oided as a Lawyer may act for the %enefit of the seller as well as the %uyer therefore earning them twice as much and hence creating a conflict of interest. Also+ a lawyer may act for the %enefit of the seller+ rather than yours. /n the end+ the lawyer may get paid twice+ once for performing the legal work+ and once for %rokering the property. ($% !$ 6T EE! # &#0(E), THIS IS # ST# !#)! C$ T)#CT For your safeguard+ ha#e a speciali,ed lawyer re#iew thecontract for you. /f you sign a document in Thai+ it %ecomes a legally %inding contract after you sign it. /n some cases+ it may %e stated %y the %uyer or seller that in the e#ent of a sales and purchase agreement+ that the contract is in most cases. *owe#er+ it is common that most standard contracts tend to exclude protection of ones own interest+ whether you are the seller or the %uyer. /n order to a#oid this+ it is recommended that you contact a lawyer or a solicitor to re#iew the rele#ant contracts for you %efore proceeding with any signing. TH#I&# ! ISS%ES F$%) T(PES $F &# ! TIT&ES There are : types of land title deed a#aila%le in Thailand3 Freehold land title B hanoteC+ 1or Sor Sam 4or+ 1or Sor Sam+ and Sor 4or 1ueng Brights of the owner decrease with each new option listedC. The %est way is to %uy land using the first option stated here+ known as hanote. #V$I! *#.I " # !EP$SIT A#oid making a depositD 1e#er make any deposit without an agreement+ or a receipt+ stating that such payment will %e used for a reduction of the price. After a deposit payment is made to reser#e the right to purchase land+ it is possi%le that the deposit /s not recorded and the %uyer recei#es no credit for it+ and when this does happen+ it is normally non' refunda%le. TH#I T)# S&#TI$ S I T$ E "&ISH The possi%ility exists when the ownerEde#eloper pro#ides two contracts 7Thai and English+ and contents of the two contracts are different3 hence it is suggested that you ha#e these contract re#iewed %eforehand %y a lawyer or a solicitor. C$ !$ !EVE&$P*E T $VE) 789 F$)EI" $0 E)SHIP The Law in Thailand allows foreigners to own :F> of the total space of all units in that condominium pro&ect. /t is suggested that you #erify with the de#eloper or the condominium &uristic person that your ownership in the pro&ect will not %e o#er :F> total space of all the units of the pro&ect $T !E#&I " 0ITH THE $0 E) $) T$ $0 E)6S #%TH$)I:E! #"E T Always #erify the originality of land title+ as there ha#e %een cases where counterfeit title deeds ha#e %een reported. Fake land titles ha#e %een reported. Also+ there are those who try to sell land without ha#ing the legal right to do so. ases in which the true owners are not who they say they are and attempt to sell the land without %eing the legal owner.

B%(I " # I C$*P&ETE C$ !$*I I%* P)$5ECT A %uyer should %e aware that there are a num%er of pro&ects+ which ha#e ne#er %een completed for different reasons. hoose carefully a pro&ect and a de#eloper. $ue $iligence is #ery important in your %uying process. )ESP$ SIB&E P#)T&( F$) FEES # E/PE SES #T )E"IST)#TI$ TI*E 2erify who is responsi%le for fees paya%le at the time of registration. All fees are negotia%le. A skill legal negotiator will help you greatly. This will %e outlined in the contract of sale %eforehand.

Thailand Property Fore;ast


'11< ====
TH#I&# ! )E#& EST#TE $%T&$$. The Thailand Real Estate 6utlook for 899G may %e a %it dated %y now+ howe#er property in#estors ha#e seen a #ery %usy year in 899H with new regulations issued %y the Thai go#ernment affecting the property sector. *opefully the dust will soon settle and we will ha#e a clearer picture for the proper method of real estate ownership %y foreigners in Thailand. Thailand has a %road %ase appeal to foreign property %uyers with its pristine %eaches+ the ama,ing hospitality of the Thai people and the up'and'coming infrastructure. The demand will always %e strong for afforda%le housing from retired persons and foreigners who desire a second home in the 4ingdom. The %iggest change to affect the property sector is the proposed amendment to the Foreign (usiness Act BF(AC. The F(A restricts the rights of foreigners to own or operate certain %usinesses in Thailand. The proposed amendments would restrict the shareholdings and #oting rights to :F percent in List 6ne and List Two of the law B%usiness related to Thai culture or national securityC. ompanies operating under List Three are exempted from the proposed amendment Bgenerally considered in the ser#ice industryC. )any foreigners ha#e used nominee company structures to own their properties. These structures often ha#e #oting rights o#er :F percent and may ha#e o%&ecti#es falling under List 6ne or List Two. An inspection of the company documents should %e done %y a legal professional to re#iew its operating status under the F(A. /t is important to note that these amendments ha#e not %een signed into law. )oreo#er+ the media ha#e spread panic a%out the proposed amendments %ut realistically it-s not as harsh as the headlines. A simple restructuring will %e necessary to comply with the new law once it is enacted. Some foreign real estate owners using the nominee structures ha#e fears a%out their real estate holdings. This often comes a%out from the fear of the unknown. There are secure methods for holding property in Thailand. /n this article+ we will explore the current methods a#aila%le for the foreign property %uyers.

C$ !$*I I%*S I TH#I&# ! Foreigners can own a freehold condominium under Thai law. According to the condominium act+ a foreigner can typically ac0uire up to+ %ut not exceeding :F percent of a total space of a condominium pro&ect. /n *ua *in+ typically the Thai owners are I9 percent or higher. *owe#er+ in other areas such as "huket and "attaya+ the foreigners generally ac0uire I9'F9 percent of the condominium pro&ects. (ut only :F percent of the foreigners can own it as freehold+ the others must lease or use a Thai company structure. The Thai go#ernment is now discussing raising the :F percent ratio. /t will %e interesting to see what de#elops out of these discussions. &E#SE #")EE*E TS I TH#I&# ! The preferred method of ac0uiring land for %uilding a home is %y leasehold. The foreigner safely ac0uires the right to use the land and registers the right with a J9'year lease at the Land $epartment. A lease contract is carefully drafted to guarantee the initial J9'year lease with two renewal periods of J9 years each. /n Thailand+ the maximum time period for a lease registration of residential property is J9 years+ hence+ the need for two renewal periods in a contract to pro#ide for a F9'year lease. The lease contract is drafted in the Thai language Bsome contracts contain English language with the ThaiC and is registered at the Land $epartment. The lease contract is attached to the title deed and maintained at the Land $epartment.The foreigner can construct a house on the land. The construction permit is applied for in the name of the foreigner. The foreigner will own the structure in hisEher own name. The ad#antage of leasehold is a lower registration fee B<.< percent on the amount of the land leaseC. /t is recommended to include family mem%ers such as young adults as co'lessees in the contract. /n the une#entful demise of the parents+ the children can carry on the full term of the lease period. The disad#antage comes at the end of the initial J9'year lease. !ould the land owner %e a#aila%le to sign for upon the <st renewal periodK This risk can %e reduced %y leasing from a reputa%le Thai company.

B%I&!I "S C# BE $0 E!

The %uildings on the leased land can %e owned freehold %y the foreign %uyer. The foreigner can apply for the construction permit in hisEher name or show proof of a sales agreement. Transfer of a %uilding re0uires a posting for J9 days %y pu%lic notice to see if anyone contests this ownership. The lease contract can %e written stating the house is separate from the %uilding and it cannot %e sei,ed at the expiration of the lease contract. *$)T"#"E Se#eral %anks in Thailand are now reportedly gearing up to offer mortgages to foreigners for property ac0uisition on a leasehold %asis. For the leasehold mortgage+ the Thai %ank will act as the lender BmortgageeC and the foreigner will %e with mortgager. The loan granted shall not exceed H9 percent of the purchase price. )ortgage means a document Bor a processC in which the owner+ called a ?)ortgager@ pledges hisEher title of real property andEor personal property to a lender+ called a ?)ortgagee@+ as security for a loan descri%ed in a promissory note. B.nder Section G98 of i#il and ommercial ode of ThailandC. %S%F)%CT /n Thai language it is called ?Sidhi'kep'kin@ and it pro#ides temporary ownership rights. This right is for the use and en&oyment of the profits and ad#antages of something %elonging to another as long as the property is not damaged or altered in any way. The person who enters into a contractual agreement with the owner for this right is called the ?usufructuary.@ A usufruct may %e created either for a period of time Bnot exceeding J9 yearsC or for the life of the usufructuary. The usufructuary is responsi%le for the expenses for the management of the property+ paying taxes and duties+ and %e responsi%le for interests paya%le on de%ts charged to it. /f re0uired %y the owner+ the usufructuary is %ound to insure the property against loss for the %enefit of the owner. *e must pay the insurance premiums for the duration of his usufruct. ;ou are registered on the title deed. The land can ne#er %e sold or transferred %y the owner of the land until the ser#itude is terminated. A usufruct interest expires upon the death of the holder of the usufruct and therefore cannot %e inherited. An interesting feature of usufruct is that the usufructuary can enter into a J9'year lease with a third party. So if the usufructuary signed a J9'year lease contract %efore his death+ the lessee BtenantC will maintain the rights of the lease until its expiration. Supreme ourt ruling 88FGE<FFI states that the lessor BlandlordC does not ha#e to %e the owner of the property. Therefore the usufructuary can rent out the land. Although in the e#ent of death of the usufructuary with the lease term+ only the usufruct will %e terminated %ut not also the lease. )oreo#er+ the usufructuary could transfer the right of using the land to his child. *owe#er+ it remains to %e seen if the Land $epartment officials would allow a transfer of the rights to the land. There is no annual tax le#ied on the property compared with <8.= percent of the assessed or market rate rental #alue in the case of a registered lease. S%PE)FICIES A couple BforeignersC who wish to retire in Thailand and purchase a new home. They find a house in a de#elopment and register a Superficies at the Land $epartment in %oth of their names. They are gi#en the right to own+ upon or under the land+ %uildings+ structures or plantations. The superficies right was appro#ed for the = million %aht purchase and the registration fee due was G=+999 T*(. This right can %e transferred and transmissi%le %y way of inheritance. /f one spouse dies+ the other can li#e on the property. .pon their death+ they can lea#e the property to an heir or third party. A thirty'year term will apply for the person who inherits the right. THE F$&&$0I " P)$VISI$ S #PP&( F$) S%PE)FICIES: SECTI$ 1711. The owner of a piece of land may create a right of superficies in fa#our of another person %y gi#ing him the right to own+ upon or under the land+ %uildings+ structures or plantation. SECTI$ 1711. .nless otherwise pro#ided in the act creating it+ the right of superficies is transfera%le and transmissi%le %y way of inheritance. SECTI$ 171'. A right of superficies may %e created either for a period of time or for life of the land or the superficiary. /f it is created for a period of time+ the pro#isions of section <:9J paragraph J shall apply mutatis mutandis. SECTI$ 171+. /f no period of time has %een fixed+ the right of superficies may %e terminated at any time %y any partner gi#ing reasona%le notice to the other. (ut when rent is to %e paid+ either one year-s pre#ious notice must %e gi#en or rent for one year paid. SECTI$ 1717. /f the superficiary fails to comply with essential conditions specified in the act creating superficies or+ when rent is to %e paid+ he fails to pay it for two consecuti#e years+ his right of superficies may %e terminated. SECTI$ 171>. The right of superficies is not extinguished %y destruction of the %uildings+ structures or plantations e#en if caused %y force ma&eure. SECTI$ 171?. !hen the right of superficies is extinguished+ the superficiary may take away his %uildings+ structures or plantations+ pro#ided he restores the land to its former condition.

/f instead of permitting the remo#al of the %uildings+ structures or plantations+ the owner of the land notifies his intention to %uy at a market #alue+ the superficiary may not refuse the offer except on reasona%le ground.

TH#I &$ " ST#( P)$")#* The 2acation /n#estment "rogram B2/"C was set up mainly to ensure and to %enefit the purchase of properties in Thailand for foreign in#estors. The program pro#ides a %usiness #enture with the foreigner B2/" mem%erC and Thai Longstay "roperty BTL"C which is an entity of TL) for the property purchase. Early this year+ the TL" %egan implementing this program and successfully registering land for its foreign clients under the program. S%**#)( The real estate outlook for 899G has great potential with new programs %eing offered to the foreign %uyers. As shown in this article+ there are safe and legal methods currently in place to protect the foreigner %uyer for their property ac0uisition. The Thai Longstay "rogram offers a secure structure for foreign %uyer to own the property or for a Thai company restructuring to comply with the new amendments to the F(A. The Thai %anks are stepping up to offer financing to foreigner %uyers for leasehold mortgages which shows their confidence in the future for the Thailand real estate market.

Property Taxes in Thailand


transfer taxes
... ... E/#*P&E $F H$0 T$ C#&C%&#TE T#/ES # ! C$STS: 1= Suppose that the go#ernment assessed price is (aht =9+999 per S0.m. '. All areas are <99 S0.m. += The total assessed price is (aht =+999+999 7= Actual selling price is H+999+999 >= The Seller possessed this property for J year

1= 0ITHH$&!I " T#/ES THE "$VE) *E T #SSESSE! P)ICE L =+999+999 (aht !E!%CTI$ 0ITH THE E/PE SE $F P$SSESSI$ F$) + (E#)S for GG> L J+I=9+999 (alance L <+<=9+999 B=+999+999 M J+I=9+999C $i#ided %y the J year of possession (alance L JIJ+JJJ.JJ B<+<=9+999EJC Taxation on progression rate < to I9+999 L exempt I9+99< ' <99+999 L => B<+999C <99+99< JIJ+JJJ.JJ L <9> B8I+JJJ.8JC Total L 8F+JJJ.8J B<+999 N 8I+JJJ.8JC )ultiply %y the year of possession L IG+FFF.HF B8F+JJJ.8J x JC I THIS C#SE 0ITHH$&!I " T#/ IS B#HT @<,888=?8

'= "$VE) *E T FEE F$) T)# SFE) /s 8> %ased on the go#ernment assessed price so =+999+999 x 8> (alance L <99+999 T)# SFE) FEE IS B#HT 111,111

+= ST#*P !%T( /n this case is exempt. This is %ecause transaction is su%&ect to the specific (usiness Tax Bpossession of less than = year %efore saleC.

7= SPECIFIC B%SI ESS T#/ J.J> for Specific (usiness Tax %ased on the go#ernment assessed price or sale whiche#er is higher. /n this case sale price is higher than go#ernment so H+999+999 x J.J> L <FI+999. SPECIFIC B%SI ESS T#/ IS B#HT 18@,111 ACB

T$T#& E/PE SES #)E3 B#HT +@>,888=?8 A#CBCCB

Title !eeds
in Thailand
Title $eeds in Thailand may %e mainly di#ided into : categories as follows3 F)EEH$&! TIT&E !EE! ACH# $TE $) $) S$) 7B This type of title grants the holder of this document the full rights o#er the land. Thus+ if you are planning to %uy land in Thailand+ this type of title deed is the %est title deed to hold. $) S$) + "$) A land awaiting a full title deed is granted the document 1or Sor J 4or. The land is measured %y the Land $epartment7 therefore+ it has its exact %oundaries. The owner knows exactly what he owns. This type of land may %e sold+ transferred+ or mortgaged+ as a land with freehold title deed B hanoteC as long as it is ready to %e a full title deed. /n order to change the title to a hanote+ the owner of the land may file a petition to the Land $epartment to file a re0uest to change it to a full title deed B hanoteC+ and the Land $epartment may do so if there is no opposition made against the petition. $) S$) + The difference %etween this type of land title deed and the 1or Sor J Oor is that a land with 1or Sor J title has ne#er yet %een measured %y the Land $epartment7 hence the land has no exact %oundaries. *owe#er+ the 1or Sor J title may later %e switched to a 1or Sor J Oor+ then furthermore+ transform that title to a freehold title deed B hanoteC in the future. P$SSESS$)( )I"HT This type of title deed is least recommended. A land with a possessory right has ne#er %een su%stantiated %y $epartment+ %ut is only recogni,ed %y tax payments at the Local Administrati#e 6ffice. /t is essential to %ear in mind that title deeds other than one of a hanote+ is not a%le to register any leases against the land such as+ usufructs+ mortgages or superficies in order to gain or encum%rance. Although Thai Law stipulates that a foreigner may not own land in Thailand+ there are alternati#e options to owning a land in Thailand. !e would %e more than happy to discuss the options a#aila%le to you with a meeting+ an o#er the phone con#ersation+ or %y email.

Thailand &egal
;o--on ter-s
. These are the most common legal terms used in Thailand and in the courts glo%ally. Should there %e a word that is not here then speak to us online. !ith office in all the main cities of Thailand we are the largest legal ser#ices network in Thailand.

#B# !$ *E T
The act of #oluntarily gi#ing up a right Bof ownership or lease or any other rightC o#er a property.

#BSE TEE
6wner of a property who resides elsewhere Busually in another city or countryC

&# !&$)!D$0 E) TIT&E

#BS$&%TE

The right of ownership of legal estate in registered land7 a title that is guaranteed %y the state that no one has a %etter title that is su%&ect to any minor interests or o#erriding interests.

#B%T
Ad&acent or contiguous to. For example+ if a property is ad&acent or next to another+ it can %e said to a%ut each other.

#CCE&E)#TI$

C&#%SE

A clause in your mortgage which allows the lender to demand payment of the outstanding loan %alance for #arious reasons. The most common reasons for accelerating a loan are if the %orrower defaults on the loan or transfers title to another indi#idual without informing the lender.

#CCESS$)(
Annexes to a %uilding such as ser#ants- 0uarters+ sheds+ garages+ etc.

B%I&!I "S I TE)EST C$STS

#CC)%E!
The unpaid interest accumulated from an in#estment or a loan

#CE%ISITI$

The cost of ac0uiring a property7 includes purchase price and all other allied cost like insurance and legal fees+ %rokerage+ charges+ etc.

#C)E
An area of land of any shape containing :J+=H9 s0uares feet or :+I:9 s0uare yards or approximately :+9:G s0uare meters.

#CT

$F

"$!

$amage caused %y nature. Examples3 floods+ hurricanes+ tsunamis+ etc. Also known as force ma&eure. An unexpected e#ent that pre#ents one from complying with certain terms and conditions in a contract

#CT%#& #!

C#SH

V#&%E V#&$)E*

The price at which property can %e sold at a gi#en point of time

Literally+ according to the #alue. Applied+ for instance+ to a scale of stamp duty+ inheritance tax and fees.

#!!E !%*
Something that is added to an existing document. Example3 supplementary to an agreement

#!5%ST#B&EF)#TE

*$)T"#"E

A#)*B

A mortgage in which the interest changes periodically+ according to corresponding fluctuations in an index. All AR)-s are tied to indexes.

#!5%ST*E T
The date the interest rate changes on an ad&usta%le'rate mortgage

!#TE

#!*I IST)#T$) A person appointed %y a court to manage an estate while testamentary proceedings are on. This person also distri%utes the estate of a deceased person in accordance with the orders of the court. #E)I#& S%)VE( A sur#ey of an area made %y taking se0uential photographs from an aircraft7 plans are then drawn from photographs.

#ESTHETIC
The #alue of a property deri#ing from its architectural %eauty or natural or mandmade surroundings. #FFI!#VIT A statement or declaration made in writing and under oath %efore a competent Busually courtC official.

V#&%E

#FFI)*#TI$
Su%stitute for an oath.

#"E C(
"erson or %ody corporate acting under the orders and authority of another The scope of such authority is usually specified in the agreement %etween the two parties.

#"E C(

#")EE*E T

A#"E C(

&ISTI "B

The term descri%ing a listing under which the %roker-s commission is protected against a sale %y other agents and often %y the principal.

#"E T
6ne who acts on %ehalf of a principal.

#"E TGS
The fee paya%le for ser#ices rendered %y real estate professional

C$**ISSI$ F$) &E#SEDS#&E )I"HTS

#")EE*E T #I)

/t is a contract %y which land or property is leased or sold %y one party to another.

This is the right to use the space a%o#e a property. /t does not include the right to use the land surface which the property is located.

#&&E(
A narrow path

#&TE)#TI$ S
)odifications in a %uilding without changes to its dimensions.

#*E !*E T
A change or alteration in agreement or court document.

#*E ITIES
Those facilities+ like swimming pools+ &ogging tracks+ health clu%s+ etc.+

#*$)TI:#TI$
The loan payment consists of a portion which will %e applied to pay the accruing interest on a loan+ with the remainder %eing applied to the principal. 6#er time+ the interest portion decreases as the loan %alance decreases+ and the amount applied to principal increases so that the loan is paid off Bamorti,edC in the specified time.

#*$)TI:#TI$

SCHE!%&E

A ta%le which shows how much of each payment will %e applied toward principal and how much toward interest o#er the life of the loan. /t also shows the gradual decrease of the loan %alance until it reaches ,ero.

# CI&&#)(
A planning term descri%ing the use of a property in a manner different from+ %ut functionally related to+ its main use.

%SE PE)CE T#"E )#TE A#P)B

%#&

This is not the note rate on your loan. /t is a #alue created according to a go#ernment formula intended to reflect the true annual cost of %orrowing+ expressed as a percentage. /t works sort of like this+ %ut not exactly+ so only use this as a guideline3 deduct the closing costs from your loan amount+ then using your actual loan payment+ calculate what the interest rate would %e on this amount instead of your actual loan amount. ;ou will come up with a num%er close to the A"R. (ecause you are using the same payment on a smaller amount+ the A"R is always higher than the actual not rate on your loan.

%#&

SI .I "

F% !S

A sinking fund where payments and interest accumulated are calculated yearly.

#P#)T*E T
A form of property ownership in which each owner holds title to hisEher indi#idual unit+ similar to western definition of condominium

#P#)T*E T

H$TE&

A property offering guests a complete self'contained sole occupancy unit consisting of %edrooms+ a li#ing room+ a kitchen with full cooking facilities and dining area. .sually re0uires a hotel license to operate as such. Ser#iced apartment which are let on a daily %asis function like apartment hotel. #PP&IC#TI$ The form used to apply for a mortgage loan+ containing information a%out a %orrower-s income+ sa#ings+ assets+ de%ts+ and more.

#PP)#IS#&
A written &ustification of the price paid for a property+ primarily %ased on an analysis of compara%le sales of similar homes near%y.

#PP)#ISE!

V#&%E

An opinion of a propertyPs fair market #alue+ %ased on an appraiserPs knowledge+ experience+ and analysis of the property. Since an appraisal is %ased primarily on compara%le sales+ and the most recent sale is the one on the property in 0uestion+ the appraisal usually comes out at the purchase price.

#PP)#ISE)
An indi#idual 0ualified %y education+ training+ and experience to estimate the #alue of real property and personal property. Although some appraisers work directly for mortgage lenders+ most are independent.

#PP)ECI#TI$
The increase in the #alue of a property due to changes in market conditions+ inflation+ or other causes.

#)BIT)#TI$
A method of resol#ing a disagreement %etween two parties %y presenting their different #iews to an independent ar%itrator. The award is %inding on the parties %ut an ar%itrator-s decision can %e challenged in a court of law under certain circumstances.

#)BIT)#TI$

C&#%SE

A clause in a contract pro#iding for disputes arising from the contract to %e referred for the decision of a third party Bar%itratorC. ommon examples are disputes o#er rent re#iew clauses in leases or the terms of %uildings contracts.

Thailand Property
;o--on Huestions
. These are the most common property and real estate 0uestions that are asked in Thailand when it comes to %uying or selling property in Thailand. /f your 0uestion is not listed here then speak to us online for further ad#ice and guidance. all us now+ speak to us online or walk into any of our offices in Thailand for attention.

0H#T IS # C$ !$*I I%* % !E) TH#I &#0I . # S0E) : The ondominium Act BThe ommonly'6wned *ousing Act of 8=88C defines a condominium as a %uilding featuring pri#ately'owned property and common property. The owners of condominium unit own the land through a &uristic person of condominium. . C# # F$)EI" E) &E"#&&( $0 # C$ !$*I I%* % IT I TH#I&# !I . # S0E) : Any non'Thai who has legally entered into Thailand may ha#e a freehold ownership o#er a condominium unit+ constructed on a land of less than = rai+ of certain pro&ects in municipal &urisdictions of the 4ingdom+ such as (angkok+ "attaya+ and "huket. *owe#er+ condominium units owned %y a foreigner shall not exceed :F> of the total space of the condominium pro&ect. 6ther restrictions are applica%le. A non'Thai owner of a freehold condominium unit may transfer a property to other foreigners. /f you wish to %uy a condominium in Thailand+ there are certain points of which you should %e aware %efore choosing your new property3 ..... *ow much will monthly maintenance fees and charges %eK *ow much are sinking fundsK BFor a use of common parts of condominiumC. Some condo units ha#e ne#er %een finished+ so consider carefully %efore %uying. 2erify that the total of foreign'owned units is no more than :F>. . 0H#T #)E *E#S%)E*E TS %SI " F$) &# ! I TH#I&# !I . # S0E): /n Thailand+ Land is measured in Rai+ 1gan and !ah. . < Rai L : 1gan Bor <H99 S0.m.C < 1gan L <99 !ah Bor :99 S0.m.C < !ah L : S0.m. < Acer L 8.= Rai < *ectare L H.8= Rai Land prices are usually expressed in (aht per Rai or (aht per !ah. expressed in (aht per S0.m. SEE #&S$: .....Thai Title $eeds ..... on#ert Rai to S0uare )eters ..... on#ert Rai to Acre . C# I &E"#&&( )E T $%T # P)$PE)T( I TH#I&# !I . # S0E) : ;es. A foreign'owned property may %e rented out. Some %anks may allow you to open an account to collect the rents. ;ou+ as a non'resident+ must %e aware that personal income tax shall %e deducted from your income earning in Thailand. ondominium prices are usually

*ortgage Bonds
in Thailand

!anting to %uy a house or #illa in Thailand %ut need financeK Speak to our property lawyers a%out what your options are in Thailand with regards to o%taining a mortgage %ond in Thailand. . FI # CI " "roperty financing for foreigners in Thailand is possi%le. !hen we %uy a property %ack home+ one of the first things we would think of is financing. E#en for those who ha#e sufficient funding and li0uidity for an ac0uisition+ financing is often seen as a means of le#eraging our in#estments. For %uyers with less access to funding+ financing is an indispensa%le #ehicle they use to own that dream home. /n this instance+ Thailand is the same as any other country. )ost of the financial institutions in Thailand pro#ide loans for real estate purchases to local Thais and Thai companies %ased on similar criteria we are used to in our home country. *owe#er+ the similarities do end there for most foreigners %uying property in Thailand. . Foreigners generally cannot mortgage properties in Thailand. /n fact+ mortgage lending %y local %anks to foreigners was #irtually unheard of in Thailand. 1onetheless+ in recent years we ha#e seen a slight shift in policies to allow foreigners limited access to financing. This was instigated+ in part+ %y the Thai go#ernment-s eagerness to promote tourism and to encourage economic growth in Thailand. This was introduced during the high growth period of the past fi#e years leading to Thailand-s current climate which can now %e %est descri%ed as mori%und. .

Despite this* the momentum gained from the past fe# years has meant that some Thai ban's do offer finan$ing servi$es to foreigners but impose rather stri$t terms and $onditions on their availability. The most important $ondition is that the property has to be held in the foreigner(s o#n name and the property has to be registered as a $ondominium under the 4ondominium .$t sin$e foreigners are restri$ted to pur$hasing only these types of properties in Thailand. .
&$C#& &E !I " I TH#I&# ! . Terms of offer for loans in Thailand are dependent on the policies of the (ank of Thailand for each fiscal term. This is also dependent largely on each %ank-s own %usiness strategies which also #ary year %y year. (anks in Thailand normally pro#ide personal loans to indi#iduals and this includes credit card facilities+ %usiness loans+ personal loans for education or medical treatment as well as personal loans for general use such as the purchase of a condominium+ reno#ations+ car purchases and so on. These facilities are+ su%&ect to each %ank-s indi#idual policy+ a#aila%le to foreigners who ha#e li#ed and worked in Thailand for a num%er of years. . /n order to o%tain these personal loans for the purchase of a condominium+ certain conditions must %e met. First of all+ it is important to note that these loans are generally granted on the fair market #alue of the property and this is usually %ased on the %ank-s own #aluation process. . The other important criterion is the 0ualification of the foreigner. These are set out %elow in the following3 .t least a < year work permit or a Thai resident permit. ' A letter of employment indicating their years of ser#ice in Thailand and their annual salary. ' "ay slips will usually %e attached to this as well. ' The %anks may also re0uest for the employer-s company documents ' The %anks would also conduct credit checks on the foreigner ' The applicant-s age com%ined with the loan period must not exceed H9 years. ' Applicants must ha#e a sta%le and secure &o%. ' Applicants must ha#e a fixed income three times higher than each installment repayment. ' The aggregate amorti,ation of loan must exceed G years Bfor some %anksC. . The applicant may also %e re0uired to su%mit the following documents to the %ank upon application. . ' opies of passport including #isa page+ /$ card or go#ernment official /$ card ' )arriage certificate of the applicant and spouse Bif applica%leC.

' onfirmation of income or salary+ and copies of %ank statements ' opies of land or unit title deeds+ sale and purchase contracts . The interest rates for these types of loan are typically %ased on the )LR or on a fixed interest rate depending on the %ank offer at the time. /t is also helpful to note that %ecause these loans are offered locally+ the interest rates are usually a %it more competiti#e and it does pay to shop around first. I TE) #TI$ #& H$*E &$# SCHE*ES F$) TH#I&# ! Around the middle of 899=+ Thailand saw the emergence of a new financing ser#ice offered %y (angkok (ank-s Singapore %ranch. At this time we saw (angkok (ank starting to offer offshore financing for foreigners wishing to purchase real estate in Thailand. .p to G9> of the property-s #alue was made a#aila%le to foreigners who did not 0ualify for a local loan. This ga#e many foreigners access to finance for their dream homes e#en if they did not reside in Thailand. .p until this time+ there were only a handful of pri#ate offshore firms offering lines of credit of this kind and often at rather stringent and unattracti#e terms. . (angkok (ank in Singapore still offers such loans to foreigners and the demand for this is increasing. They are a%le to tender loans in se#eral currencies including .S and Singapore $ollars. urrently+ the interest rate for .S$ loan consists of the prime plus 9.=> which in total stands at I.G=>. A processing fee will also %e incurred upon application. (angkok (ank does insist on meeting the applicants in person and this means you would usually ha#e to tra#el to Singapore to apply for this. . (angkok (ank was the first %ank in Singapore to offer such financing ser#ices. *owe#er+ this year we saw the introduction of .nited 6#erseas (ank B.6(C in Singapore &umping on the %and wagon and offering similar lending ser#ices to foreigners wishing to purchase real estate in Thailand. /t is a relati#ely new scheme for .6( and it was introduced largely as an alternati#e to (angkok (ank-s hold on this lucrati#e market. /t is a good thing that we are starting to see some competition in this area and in the future this will hopefully create an en#ironment that would impro#e the consumer-s position with #arious %anks trying to outdo each other with more competiti#e rates. At the moment+ the terms for a .6( international loan is still #ery similar to (angkok (ank with their interest rate currently also at I.G=>. *owe#er+ it appears their processing fee may %e slightly higher %ut offers the ad#antage of applying for the loan locally in Thailand without ha#ing to set foot in Singapore. .6(-s entrance into this niche market is a welcoming sign to the area of financing to foreigners in Thailand. . C)ITE)I# F$) # *$)T"#"E . )ortgages are go#erned under section G98 of the Thailand i#il and ommercial ode. /n this section+ there are certain rules which must %e adhered to in order to 0ualify for protection under Thai law. These include the following3 . <. The mortgager must ha#e the right of ownership of the property. 8. The mortgage contract must %e in writing and must %e registered J. The parties must register the mortgage to the authori,ed 6fficer for the following cases3 . a. &# ! 0ITH TIT&E !EE! has to %e registered at the Land $epartment or (angkok )etropolis Land 6ffice B(ranchC or "ro#incial Land 6ffice or "ro#incial Land 6ffice B(ranchC where the land %eing mortgaged is located. %. &# ! 0ITH $ TIT&E !EE! S%CH #S $)= S$)= +, has to %e registered at the $istrict 6ffice where the land %eing mortgaged is located. . &IST $F B# .S I TH#I&# ! . (elow is a list of se#eral %anks in Thailand along with their #arious policies and criteria on ser#icing loans to foreigners.

5o. .

5ame

Terms and 4onditions for 6ualifi$ation of 7oan

!ang'o' !an' +47. !ang'o' !an' in Thailand itself does not provide loans for foreigners under any $ir$umstan$es. Only !ang'o' !an' in Singapore provides this servi$e to foreigners. !an' of .yudhaya +47. ,S!4 !an' of .yudhaya does not offer loans to foreigners at this present moment. ,S!4 does provide loans to foreigners under the follo#ing $onditions8 %esiden$e +ermit* year #or' permit* letter of employment* $ompany(s do$uments or other pertinent do$uments upon re/uest.

2. ".

!an' #ill grant loans for foreigners based on the $urrent mar'et value8 4ondominium 90% of the value and 7and and ,ouse up to :0% of the value. .n amorti;ation period of 9 years. <. 5. =asi'orn !an' Siam 4ommer$ial !an' +47. >S4!? =asi'orn !an' does not offer loans to foreigners at this present moment. +rovides loans for foreigners under the follo#ing $onditions8 year #or' permit* $onsideration based on rate of salary* ba$'ground $he$' for the employment and $redit rating. The foreigner $an re$eive a loan for a $ondominium or house. . @oint loan $an only be obtained bet#een blood relations. .morti;ation period of bet#een 5A9 years. 0or personal loans* S4! only grants $redit $ards* but not for personal business loans.

B.

Thai )ilitary !an' +47. >T)!?

+rovides loans for foreigners >only $ondominiums? under the follo#ing $onditions8 2 year #or' permit or 2 years residen$e permit* passport* letter of the employment* payment slip and other supporting do$uments re/uested. 2f the foreigner has some added se$urity finan$e* this #ill be an added appendage for the ban's to $onsider. 2f the loan is for landed property* a foreigner #ill only be able to obtain a loan if they apply @ointly #ith a Thai spouse. 3O! in Thailand provides loans for foreigners under the follo#ing $onditions8 . loan for landed property $an be obtained by a foreigner if it is applied @ointly #ith a Thai spouse. 3O! has laun$hed the ne# 2nternational ,ome 7oan S$heme for Thailand to allo# foreigners a$$ess to finan$ing #hen they #ish to buy $ondominiums in Thailand. This is a @oint finan$ing program bet#een 3O! in Thailand and 3O! in Singapore. 7oans #ill be obtained in 3O! in Singapore and se$ured by S!74 #hi$h #ill then be issued by 3O! in Thailand #hi$h #ill in turn register the mortgage lo$ally. 3O! in Thailand suggests that the entire appli$ation pro$edure $an be done #ithin Thailand #ithout the appli$ant going to Singapore.

9.

3O! +ubli$ 4ompany 7imited

C.

Tis$o !an'

0. Standard 4harter !an' >Thai? +ubli$ 4ompany 7imited

+rovides loans for foreigners for $ondominium under the follo#ing $onditions8 years #or' permit. Tis$o #ill grant loans for foreigners based on the mar'et value of the property8 offers lending for $ondominiums for up to 90% of its value. 0oreigners $an borro# a maximum of 5 million !aht and not less than 900*000 !aht. .morti;ation rate of 0 years. Standard 4hartered does not offer loans to foreigners at this present moment.

. The information in this ta%le is deemed to %e accurate at the pu%lication of this article. !e do not accept lia%ility for any loss or damage claimed to %e caused %y the information pro#ided in this ta%le. . /t would appear then that financing is gradually %ecoming more accessi%le to foreigners in recent years. /t remains true that financing for foreigners is no still easy task and is highly dependent on your indi#idual needs and circumstances. Financing terms are still not what we are used to %ack home and it is certainly not for e#eryone. (efore applying for either a local loan in Thailand or an international off'shore loan from either (angkok (ank or .6( it is wise to assess the markets first and consult with a reputa%le financial ad#iser or lawyer.