Buying a property in Thailand may seem a challenging task. Many people wonder, can foreigners buy property in Thailand.
As with any overseas property purchase there are always a few things to consider and plan before taking that step. Informing yourself of potential problems and obstacles you might encounter can make the purchasing process so much easier.
In this article, we’ll explain how to buy a home in Thailand, providing an overview of what to expect so you’ll be ready when the time comes.
Here are eight steps to buying a property in this beautiful Southeast Asian country.
1. Set Your Budget
Buying a property in Thailand can be a big commitment, so make sure you’re ready with the financial responsibilities that come with it before you take the plunge. Whilst Thailand property is a fantastic investment that is likely to increase in value over time, you’ll need to think carefully about how you’ll finance it. Although most financial institutions provide loans to local Thais, this financial option isn’t generally available to foreigners.
Whilst local banks don’t offer loans to non-thais, you may be able to access financing from overseas banks or local financing companies. Short term financing from local developers on new properties may also be an option. In most cases though, foreign buyers will be required to purchase property outright. With this in mind, consider your financial situation and set a realistic budget before you start house-hunting.
2. Carry Out Online Research
Carrying out online research can provide you with further information about buying and owning a property in Thailand. Getting a general knowledge on ownership laws and what types of properties foreigners can take ownership of will help to get you started. Knowing that as a foreigner, you can buy and own outright a freehold condominium unit, but knowing that villas and houses can normally only be owned under a long-term lease. These leases are usually for 30-year periods with additional 30-year renewals.
As an alternative to a leasehold to own a property, some buyers choose to use a Thai company to own the property freehold. Thai companies are allowed to own land here, which makes this an alternative route to home ownership taken by foreigners. If you plan to use this method to buy a property in Thailand, you should consult with a knowledgeable agent in conjunction with a local law firm who specializes in real estate.
Online research can also give you a good understanding of property prices. What type of property you can get for your budget and in which areas.
3. Contact an Agent
Contacting a local real estate agent is an important step when buying property in Thailand. Agents can provide valuable information about the real estate market, property law, which will help you avoid spending lots of time carrying out research yourself. They can also offer expert advice on locations and the best areas to buy a home, listening to your requirements carefully and selecting properties which best suit your needs. An agent can create a list of potential properties for you to review before arranging viewings of those which are most suitable. Perhaps most importantly, they will help negotiate the best deal for you.
4. Carry Out Property Viewings
The next step in your home buying journey is to carry out viewings so you can assess a property’s layout, size, condition, and location. It’s always advisable to check over the condition of the property and we also recommend checking that the rooms are big enough for your needs and offer adequate storage space.
With the use of good professional cameras, online representation of properties can look very enticing from the photos. Therefore it’s always good to ask if the photos were taken recently and correctly represent the property. However for this reason, it’s important to assess the property in person, investigating the finer details of your potential future home.
It’s also important to explore the surrounding area when carrying out property viewings. You should establish what facilities and services are nearby and how far you need to drive to reach shops, beaches, and other amenities and entertainment. If you’re viewing a property that is going to be your home for many years, it’s a good idea to dedicate sufficient time to viewings.
Keep in mind that certain areas are very popular with tourists, and owners often rent out their properties during peak months. Especially owners that are renting property in Phuket. Therefore, in the case of resale properties it’s advisable to do viewings outside of these times, with December, January, and February best avoided.
5. Make an Offer and Negotiate
The next step in buying a property in Thailand is to make an offer and negotiate the best deal. It’s quite normal to negotiate, and it’s worth going in with a bid under the asking price. At the same time, this offer should be realistic so that the buyer knows you’re serious.
Property taxes and transfer fees are normally negotiable too, and buyers can expect to share the cost with the seller. However, keep in mind that you may be required to pay the majority of these fees if the home has been heavily reduced or discounted by the seller.
Fees for freehold properties are usually around 6.3%, and leasehold properties 1.1% (your lawyer will be able to calculate the exact fees involved). If the property requires work carried out, negotiate the price. Alternatively, you can request that the seller makes the necessary repairs.
6. Appoint a Lawyer
Before buying a property in Thailand, you should appoint a lawyer to carry out due diligence and review the reservation and S&P agreements. An experienced Thai lawyer can discuss the legal procedures with you. They can make sure you fully understand the process for you to acquire a property. Buying a home in Thailand as a foreigner can be easy or in some cases more complex and you will benefit greatly from the advice and guidance provided by a local lawyer.
7. Sign Contracts
In most cases, a reservation fee and deposit are paid to take the property off the market. The deposit required can vary greatly and is usually anywhere between 100,000 baht and 10% of the selling price. It’s important to make sure that the reservation is refundable in case the property fails due diligence or the owner has not disclosed a legal issue.
Often, the agent will hold the deposit as a third party until the sale is completed. If the deposit amount is significant, it may be paid into a joint account set up between both parties’ lawyers. Closing the sale can take around 30 days on average, depending on the type of property.
8. Transfer Ownership!
The final step when buying property in Thailand is to transfer ownership. Your lawyer will be able to take care of this on your behalf with a signed POA. They will visit the local Land Department to transfer and register the property into your name, pay the required taxes, and finally hand over payment to the seller or their lawyer.
Knowing how to buy a property in Thailand may seem difficult at first but with the right advice it can be a very straightforward process. To make your home buying journey run smoothly and not become a stressful task but an enjoyable one it makes sense to contact a reputation local property agent. At Select 1 Property, we have a wealth of knowledge and expertise, allowing us to help you find a new home in Phuket to suit your needs and budget and guide you through the buying process with ease.