The 49% Foreign Ownership Quota for Condos in Thailand
If you've been to Thailand you will know how easy it is to fall in love with the place. The culture and food have captivated foreigners for decades. So many people decide to try and buy a condo here.
But, there’s a catch – the 49% foreign ownership quota for condominiums. Whether you’re an investor or you’re curious, join us as we demystify the 49% limit.
What is the 49% Condo Ownership Quota for Foreigners?
While it is possible by law for foreigners to buy property in Thailand, there are rules and regulations to overcome. The most notable regulation is that foreigners can only own up to 49% of a condo building in Thailand while the other 51% must remain Thai-owned. The total number of foreign-owned condo units must not exceed the 49% quota. If you are buying a condo from a Thai owner, make sure to check and verify that the condo has not reached its foreign ownership limit yet.
The other regulation to be aware of is around payment for the condo. You must pay for the condo in the form of foreign currency.
These rules and regulations shouldn't be too much of an issue for foreigners looking to buy condos in Thailand under their name. But, if the condo you want has reached the 49% foreign ownership limit or you do not want to pay in foreign currency, you can buy under the name of your Thai spouse.
The Condo Buying Process
Know your Rights and your Obligations
Being a foreigner in Thailand, it's important to take note of the various laws and regulations on buying condos or properties overall. For best results, it's recommended you consult a lawyer and have them accompany you during the condo buying process for safety. Make sure, also, that the building is condominium act-registered, which will allow you to register it under your name. Remember to also read through the contract in detail to understand the terms and conditions.
Know the Timeframe
Depending on the developer and transaction complexity, the condo-buying process in Thailand may take several months. You may also need to sign off reservation, sales & purchase, and ownership transfer contracts.
Gather up Documents
- Contract: The contract should have all the terms and conditions of the sale. This includes the price, payment schedule, and ownership transfer.
- Foreign Exchange Transaction (FET) Form: This is for transferring money to Thailand for buying the condo. This document is for large foreign transactions and serves as proof of foreign currency transfer to Thailand.
- Personal Documents: You will need the following documents for identity verification.
- For Foreigners buying the property on their own-
- Copy of Passport.
- Copy of Visa or Immigration stamp in Thailand.
- Residence Certificate (if any).
- Non-Thai Identity card (if any).
- House Registration (Tabien Baan, if any).
- For Foreigners buying the property under the Thai spouse's name-
- Copy of both individuals' passports.
- Copy of both individuals' Thai immigration stamp of Visa.
- Copy of Marriage Certificate. If registered outside of Thailand, make sure to get the document translated and legalized in Thai via an accredited translation center.
- Spouse consent letter
- For Foreigners buying the property on their own-
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Decide on your Financing Options
If you need financing to aid with buying a condo, there are options such as bank loans or developer financing. Be sure to research such options in detail to see which option would be most appropriate for you. Note that Thai banks have strict policies which require your permanent resident status before they consider offering you a loan. For loan applications, consult a real estate agent for assistance.
Know your Taxes and other Expenses
- Transfer Fees: 2% of registered property value.
- Stamp Duty: 0.5% of registered property value. You must transfer these two fees to the Land of Department in Thailand. These fees are non-negotiable and the payment is the buyer's responsibility.
- Withholding Tax: 1% of registered property value or appraised value, depending on which is higher. Withholding Tax applies if property seller is a company. The tax is deducted from the seller's proceeds and you are responsible for paying the tax to the Revenue Department.
- Legal Fees: This varies depending on the transaction complexity and lawyer's rates.
- Home Inspection Fees: Home inspection fees cover the due diligence report. This document records the property's condition and status before buying.
- Sinking Fund or Maintenance Fees: Some developers charge sinking fund or maintenance fees. This is for regular maintenance and upkeeping of the building's common areas. The fee may be charged on a monthly or yearly basis.
Deposits and Payments
For your condo unit reservation, you will need to leave a 10 to 20% of the price. The remaining balance is often paid via installment plans while the final payment is due upon ownership transfer. Remember to only pay the developer or seller and not any third party. Note that when transferring money for buying a condo in Thailand, send the money as your default currency first and have it converted to THB via a Thai bank.
Get your Yellow Tabien Baan (House Registration) booklet
When you have fulfilled all payments, you will then get a yellow Tabien Baan or house registration booklet (whereas the booklet will be blue for Thai citizens).
Alternative: Buying Leasehold Property
One alternative is to buy a leasehold property. Leasehold is where the maximum lease on land period is 30 years. You can also renew at least twice in addition to the starting 30-year period, which makes the total lease period 90 years.
A Leasehold may not grant you complete ownership rights like a freehold. But it does offer the leaseholder exclusive rights to the use of that property at least. Leasehold rights are on the title deed and will allow you to enjoy your property without the hassle or ongoing paperwork.
Buying leasehold property might be a viable option for retirees searching for holiday homes in Thailand.
Alternative: Set up a Thai Company to buy a Property
Some buyers might prefer greater ownership rights without the confines of leasehold agreements. In this case, foreigners can set up a Thai company in hopes of buying a Thai property. If 51% of the company is Thai-owned, setting up a Thai company should allow for indirect ownership and control.
Alternative: Marrying to a Thai Spouse
The other alternative to buying a property in Thailand for foreigners is marrying a Thai spouse. By marrying a Thai spouse, you get to settle down, start your family, and get a place to call home all in one go. Be reminded, though, that the property bought will be under your Thai spouse's name even though it was your intention to buy the property. Thus, the Thai spouse reserves the rights to sell, mortgage, exchange, or transfer the property without consent from you as the foreigner.
Final Verdict
In conclusion, Thailand’s 49% foreign ownership quota for condos may seem like a daunting task. But, with the right knowledge and guidance, it’s a challenge that can be overcome.
Understanding these regulations is your key to property ownership in Thailand. Whether you're buying a dream home or considering an investment.
Remember, it’s not about what you can’t do, but what you can achieve with a little effort and insight. So, take that first step, explore the possibilities, and embark on your journey to make Thailand your home.
Are you a foreigner looking for a new place to call home for your family? Are you looking to invest in a Thai property? Get in touch with us today to begin your next chapter!
