The rule of thumb for property buyers in Thailand is putting their trust only in real professionals who are genuine experts in their respective fields. An experienced property agent will help you to find the desired property, while a reputable law firm will check all the paperwork, compose the contract, conduct payment and register ownership. Finding your dream house and having money to buy it is not the whole story.
Of course, we all would prefer to cut on additional expenses related to buying and registering real estate where possible, but the choice of property agent and lawyer is not where it’s worth saving pennies. If something goes wrong, the losses can be significant.
So, what is the right way to own your Thai property and what is the difference between various options available? In this column, we’ll have a look at one of the most popular offerings – buying a Freehold condo. Buying a Leasehold condo as well as buying a villa will be reviewed in the following issues of RL Magazine.
When buying a unit in a condominium, according to Article 4 of the Thai Condominium Act 1979 what you buy is a part of the complex that has been singled out from the total area of the project into a living area for individual ownership and use. Freehold ownership of your unit allows you to sell your property, rent it out, use it as security against a loan or transfer by inheritance at your own and sole discretion without any limitations from any third parties.
A Freehold unit can be owned by a foreign (non-resident) national and company or by a Thai (resident) national or a company limited. The name of the owner is recorded in the Title Deed registered at a local Land Office. The price of the unit, stated in the sale and purchase contract, is used to calculate related Government taxes, duties and fees paid to complete the deal.
The total amount of taxes and fees when buying a Freehold condo in Thailand is 6.8% of the unit price and is paid by both buyer and seller or as stated in the sale and purchase agreement. This includes the Transfer Fee (2%), the Thai Business Tax (3,3%), the Stamp Duty (0.5%) and the Withholding Tax (1%). In the case of re-sale, the length of previous ownership plays its role as well. Units owned for more than 5 years are exempt from the Вusiness Tax.
To this, one should add costs of service provided by the law firm which are paid for separately. These include conducting Due Diligence, the sale and purchase itself and Government registration of the property. A reputable law firm can do all of these on your behalf.
To wrap it up, let us add that Freehold ownership also allows the owner to vote at the Condominium's annual and extraordinary meetings, take part in discussions over all the project-related issues and approval of the annual budget.