Property Advice

Finding the right property is not just a matter of chance. How important to you is an ocean view? Or being close to shops and restaurants? Do you need finance? You have probably considered those aspects of your purchase. However you might need some advice on the types of title available and the ability of non-residents to buy different types of property. Ownership costs will be important. Consideration of all of those factors is provided in my service. Plus of course, Honest, Unbiased advice on Property values and Suitability By not being affiliated with any particular developer or owner, we can offer you a frank and honest opinion.

Why Invest In Thailand Property?

Learn here why Thailand property offers strong potential as an investment location.
Today, investors seek the stability and simplicity of property to gain good returns on investment.
50% of the members of The Times Rich List made their money through investing in property. Equities or stocks can be volatile but, despite current world economics, property is regarded as historically stable.

The benefit of buying specifically for investment purposes is the removal of emotion from the purchase while you regard the property purely as an investment vehicle. This could be in the form of re-assignable contract option to sell at a substantial profit prior to completion or a "buy-to-let" situation to generate a reliable rental income and incorporating substantial capital appreciation.

Main Reasons Why Thailand is a Desirable Investment Location:

• An exotic long haul destination, Thailand is also a sophisticated tourist destination with a great universal appeal
• For thousands of people who have worked in Asia for many years, Thailand is an attractive retirement destination, in which the living environment will feel familiar
• Retirement visas are available for foreigners over 50 years of age, according to financial means
• Thailand has good schools, an efficient health care system and it is seen as a friendly country in which to live or visit
• Thailand boasts beautiful mountains, dense forests and stunning beaches.
• With a tropical climate and cities teeming with culture and color, Thailand entices visitors back each year
• Warm weather for winter holiday makers between November and February
• The relatively undiscovered nature of Thailand means that property prices here remain far below those in the more established European markets, although they are set to continue growing quickly
• Thailand is the largest growth market in Asia. Increasing numbers of businesses choose Thailand as a regional base from which to keep their employees working all around Asia.
• Thailand has recently attracted significant foreign investment. It has become one of the Asian economic leaders and is one of the fastest-growing economies in the region
• The completion of the Suvarnabhumi-Bangkok International Airport (SBIA) has precipitated growth in commercial property markets in eastern Bangkok as well as made Thailand even more accessible by air
• Thailand is one of the cheapest places to fly to in Asia
• The country has strong business links with China and has an excellent infrastructure as well as world-class facilities in many resort towns
• Property is much cheaper in Thailand than elsewhere and an increase in overseas interest in property purchase has helped to create an economic recovery in Thailand. Property investors who bought post 1999 have witnessed impressive capital growth, particularly in major cities.
• Rental potential is great, due to increased government spending luring growing numbers of tourists
• No capital gains tax for private investors, and low ongoing taxes
• Today, foreigners are regarded by the government as a big investment opportunity in Thailand and they are actively welcomed and encouraged to invest
• The waving of Stamp Duty and transfer fees are regarded as enticements for foreign buyers

Legal and Property Tax in Thailand

My Property Buyers Kit offers a summary of the legal and tax issues you may need to consider when purchasing property in Thailand. For detailed advice, ORCHID Real Estate Phuket can refer you to independent legal and tax specialist’s advice regarding of individual case.

Tax planning should be a core consideration during any form of property investment. The tax system in Thailand has many foibles - this section is designed to offer a general guideline in principle to the thai property tax system.

Those living outside their home country may be currently free of the burdens of taxation, but future changes in personal circumstances may mean that tax could once again become payable, whether or not they plan to return “home”.

Stamp Duty

Stamp duty of 0.5% and transfer fees of 2% have, for now, been waived for the short term as the government entices buyers to the market.

Business tax of 3.3 % (levied against a vendor who has been in registered possession of the property less than 5 years) is also charged, along with income tax (similar to capital gains tax) at a variable rate.

Capital Gains Tax Capital Gains Tax as such is not payable in Thailand, unlike many other countries.

Income Tax This is usually between 1.0 and 3.0% on property and is the comparable replacement to capital gains tax. There are no established rules regarding who pays the income tax while this is simply another part of the bargaining process during purchase, as are all other costs relating to the transfer of ownership.

Land Tax This is an annual tax levied on land ownership. The amount is often so small that in practice the body charged to collect it rarely bothers to do so. When they do collect it, it is usually after several years when the amount has accumulated.

Structures Usage Tax This only applies to commercially used properties. The rate is 12.5% on the actual or assessed gross rental value of the property. However, this notional value is well below the commercial market rental value.

If the property is purchased through a company, you need to remember that corporate tax is higher than personal tax, and the cost of setting up the company must be considered as part of the initial investment.

Tax on Rental Income This tax is charged at between 10 and 30% of the rental income, depending on the type of property leased.

Thailand Title Deeds

Chanote

A Chanote is a certificate for ownership of land and the person with their name shown on the deed has the legal right to the land, and can use it as evidence to confirm the right to government authorities. A Chanote title deed shows the official government land survey points using the very accurate GPS survey method to set the area and boundaries of the land. So this is the most secure type of land title and is highly recommended to the purchaser.
It is the long term goal of the Land Department that all land in Thailand will be covered under the Chanote title system.

Nor Sor Sarm Kor

This certifies that the person named on the certificate has the confirmed right to use the land implying that all requirements to issue the title deed have been met and that the issue of the title deed is pending. Land with a Nor Sor 3 Kor title deed may be sold, leased, used as mortgage collateral and so on. The holder of this certificate cannot leave the land unattended for more than 12 years.

The Chanote and Nor Sor 3 Kor are the only titles over which registerable right of ownership or lease can exist and are as such the only ones that a prudent foreigner should consider.

Nor Sor Sam

Similar to the above this is a Confirmed Certificate of Use except that not all of the formalities to certify the right to use have been performed. Before a transfer can be made, a notice of intent must be posted and then 30 days public notice is necessary before any change of status over the land can be registered.

Sor Kor Nung Or Certificate of Possession, this recognizes that a person is in possession of land but the Certificate does not imply that there are any rights associated with the possession. It is not transferable, but a person in possession may transfer physical possession and the new possessor may apply for a new Certificate of Possession. Not recommended for foreigners buying property, as you will have no rights to the property even if you pay for the certificate.

It is very importance that you should always ask your lawyer to check the front and back page of the property title deed. A faithful translation of this will show you who the current owner is; if the property has any endorsements or liens; the shape, area and orientation of the property and border to a public property (such as a road, stream or the ocean). If the lawyer's report is negative and there are problems with the deed certificate, you should not continue with the purchase of that property.

THAILAND PROPERTY OWNERSHIP

Leasehold Ownership A safe and secure registered long term lease by signing a 30-year (or less) lease with a domestic company or Thai individual, with an automatic option to renew for another 30 years. Typically with 2 x 30 year extensions, making a total of 90 years

Freehold Ownership An individual foreigner or a foreign company may acquire and own a house and land through a Thai Company ("Holding Company") and have control over such company as a Director and via a preference share scheme. The shares held by Thai shareholders will be common shares, and the shares held by the foreign Investor will be preferred shares. Under Thai laws, the preferred shares mean shares with different rights from common shares. Preference shares in this case would give the holder control over the company.

Foreign Freehold Ownership (for condominiums)

Condominiums are available for outright Freehold ownership by foreigners. The Condominium Act of 1979 gives buyers a title to part of a building or buildings with multiple owners. It also confers a fractional interest in the land and other common assets and areas. Thai Law allows foreigners to own only up to 49% of the units in a Condominium development. So supply is rather limited.

What is a Tor Thor Sam

When you transfer money into Thailand to buy property you should instruct the bank here to issue a Foreign Currency Exchange Transaction Certificate (or Tor.Thor.3) as it is commonly called) to show that you are importing funds to buy a condo, or as partial capital investment, or as a partial loan to establish a company to acquire land, or land and house.

A Tor Thor Sam

is an official bank document issued by the receiving bank upon the receipt of foreign currency into your bank account in Thailand. You must request a Tor Thor Sam from your bank when you are remitting funds to Thailand for the purpose of purchasing a condominium, and the Tor Thor Sam must specify that the remittance is to be used solely for purchasing a property under Code 5.22.

Funds for setting up a corporation to acquire/buy property will be normally split into equity (registered capital) injection and debt arrangement (shareholder's loan). This certificate will enable you to smoothly repatriate the brought in money out of Thailand in the future.

LAND MEASUREMENT

1 Rai	= 4 Ngan	= 1,600 m2
1 Ngan	= 100 Talang wah	= 400 m2
1 Talang wah	= 4 m2
1 Acre	= 2.529 Rai
1 Hectare	= 6.25 Rai

Summary

Thailand remains less exploited in the property investment sector than many other areas and for this reason prices are far below those in more established European markets. However in many areas, prices are moving upwards at a rate of approximately 10-15% per annum.

There are undoubtedly some very attractive investment options to be found in certain locations of Thailand and, according to world experts, Thailand’s economy is undergoing a steady growth spurt. While improvements to Thai property investment provisions continue, a symbiosis with the tourist economy and the real estate economy, will allow mutual growth at unprecedented levels.

Property investment in Thailand requires careful financial planning. Below you will gain an understanding of the finance options available to investors wishing to purchase property in Thailand today.

Investment Finance in Thailand Financing your property investment in Thailand could entail injecting your own cash resources or, as most serious investors prefer, a mortgage or equity release scheme.

Traditionally foreigners have not been able to borrow money in Thailand for property purchase. However, times are changing and loans are regarded as a positive way to attract foreign investment

Terms of Thai loans Currency: Baht(THB)
Loan To Value: up to 70% of the valuation price
Term: 20 year

Thai Bank are just beginning to regard foreigners, not as a credit risk, but as an investment opportunity and mortgages in Thailand are gradually increasing in availability. The opening up of borrowing possibilities
Recently a new branch of the Bangkok Bank (BBL) has opened in Singapore and now finances
sometimes as much as 70% over 20 years for property purchase. Loans can be in Euros, US Dollars or Singapore Dollars, with interest rates varying in accordance with your choice of currency.
HSBC in Thailand offers loans of between 1,500,000 and 35,000,000 Thai Baht Typically they will lend up to 80% of the purchase price and interest rates can be fixed for up to three years.