Thailand [Buying Property in Thailand]
Thailand particularly Bangkok has been experiencing a growth spurt, which has been helped by the Thai government’s all-out push to upgrade the country through 2.2-trillion-baht (S$89 billion) of investments — with a focus on transportation infrastructure — to improve the nation’s competitiveness on the global stage. The country has become more than just a charming tourist destination. Local and foreigner are looking into buying property in Thailand for own stay or investment.
Things you need to know when buying property in Thailand
Can Foreigners Buy Property in Thailand?
Yes. Foreigners can buy property in Thailand, however with certain restrictions.
Buying Condominium in Thailand
Foreigners can buy and own freehold condominiums in Thailand so long as they can enter Thailand legally.
However, the condominium units owned by foreigners cannot exceed 49% of the total space of the development. Other restrictions are applicable.
When foreigners buy condo in Thailand, they will need to meet certain requirements for foreign ownership.
They must be –
- Possessing a Permanent Residence permit.
- Stay in Thailand under the laws governing investment promotion.
- Having a foreign currency bank account, to withdraw money from a non-resident bank account, or bring foreign currency into Thailand.
That why developer will instruct foreign buyers to do a telegraphic-transfer any currency except Thai Baht for down-payment or the balance of the payment.
Buying Land in Thailand
The existing law does not permit foreigners to hold ownership for lands in Thailand. But foreigners can lease a land in Thailand for 30 years.
Alternatively, the 2nd option will be to set up a company in Thailand with a local Thai national, however the foreigner hold less than 49% share of the company. Companies are able to buy land in Thailand.
Tax Matters In Thailand (Resale)
When transferring property or resale, there’s a 2% fee based on its government appraised value (which should be lower than the price you paid for it). Typically half of this fee is paid by the buyer and half by the seller.
There’s also a stamp duty of 0.5% to be paid when transferring property. Stamp duty is usually paid by the seller.
If a property is sold within 5 years of being acquired then a “Specific Business Tax” of 3.3% is instead payable. If a specific business tax is payable, then stamp duty does not need to be paid. A guide on the taxes in Thailand as shown below.
Sample Tax calculation assuming a 10 Million Baht sale and appraised value of 8 Million Baht.
Thailand property tax levied on rented properties. It is payable annually at a flat rate of 12.5% of the assessed annual rental value of the property. Only owner-occupied and vacant dwellings are exempt from property tax.
Property taxes are deductible against income tax liability, if the property is utilized in earning rental income.
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Why buy property in Thailand [Bangkok]?
- Hub of ASEAN
As the geographic heart of ASEAN, Thailand is regarded as the largest growing economic market and serves as a gateway to Southeast Asia connected to the world via Suvarnabhumi International Airport, ranked as the world’s seventh largest airport, and Don Mueang International Airport. With its strategic location, unique advantages and the city’s appeal, Bangkok is positioned for huge growth in its property sector, attracting overseas investment and regional headquarters keen to tap into the city’s economic potential.
- Fastest-growing City
Bangkok is ranked ninth among the top 10 emerging world cities, according to new research from real-estate consultancy Jones Lang LaSalle (JLL). In the past years, Bangkok has undergone several major infrastructure developments including the expansion of mass transit lines (BTS Skytrain and MRT Subway). Within the capital, investors look to the core areas that constitute Bangkok’s most promising investment opportunities, thanks to their unrivaled access to mass transit: Ploenchit, Asoke, Phrom Phong, Ratchada and Ari.
- Growing Population in Bangkok
Bangkok city is forecasted to grow to 11 million registered residents in 2025.
Bangkok property prices have moved up along with Thailand’s strength in the economy. Thailand is financially strong. Many regional Multi-nationals are using Bangkok as a regional HQ and stepping-stone before investing into Cambodia, Myanmar, Laos or Vietnam.
- Legendary Charm
Despite its rapidly advanced development, Bangkok retains much of its authenticity and charm, making life here feel like an endless holiday. Hop on a river ferry to grab brunch at a five-star hotel overlooking the Chao Praya River. Explore a winding alley for tasty street food. Sip a cocktail in the latest speakeasy in Sukhumvit. Get pampered at spas with unbeatable prices. Shop yourself out at markets and luxury malls. Pop out of town for a beach getaway a 1.5-hour drive away. Or just laze at home, where every conceivable service can be brought to your doorstep for a fraction of what you’d pay in other major cities.
- Investment Opportunities
With the influx of ASEAN Economic Community (AEC) coupled with the government’s 2.2-trillion-baht transportation infrastructure investment to turn Thailand into AEC logistics hub, it has driven Bangkok property to grow constantly; particularly in the inner-city locations where the prices keep breaking records year after year. This fact is supported by Knight Frank’s Bangkok Condominium Research Report for Q2 2015 that the prices of new launch condominiums in the central business district (CBD) went up at a much faster with prices above THB 250,000 per square meter and tended to be skyrocketing. If you are considering owning property in Bangkok, now would be the time, as the prices of high-end residential properties are still lower than those in other Asian markets, especially Singapore, Hong Kong, and Taiwan; hence providing a potentially lucrative property investment opportunity to long-term investors.
- Welcoming, Friendlier Thai Law
According to the Condominium Act, B.E. 2522 (1979), foreigners are allowed to purchase and own condominiums up to 49% of the total space of all units in that condominium on a freehold basis. Upon purchase, foreign buyers receive the same title deed as a Thai owner would, complete with details regarding the land belonging to the condominium; the unit; the owner’s name; and official seals from the competent authorities. Buying a freehold condominium, therefore, is the ideal option for those who are looking for long-term investment with 100% ownership.
Bangkok’s Transport & Connectivity
Bangkok is served by 3 Rapid Transit Systems; namely the BTS Skytrain, the underground MRT and the elevated Airport Rail Link. Despite the fact that plans for the development of mass rapid transit in the city had been made since 1975, the BTS only has began its operation in 1999.
The BTS consists of two lines, the Silom line and the Sukhumvit, with around thirty stations which adds up to approximately 30km. The MRT began operations in 2004 and currently consists of the Blue Line and Purple Line. The Airport Rail Link which began operations in 2010, connects the city centre to Suvarnabhumi Airport via a distance range of approximately 28km.
Bangkok property near BTS area are the most popular among expatriates due to its traveling convenience.
With two existing airports — Suvarnabhumi International Airport, the world’s seventh largest airport, and Don Mueang International Airport. The Mass Rapid Transit Master Plan in Bangkok Metropolitan Region is expected to be completed by 2029 which cover about 509 km will further enhance the connectivity. Making Bangkok one of the most desirable living and property investment choices in the region..
*Disclaimer*: Regulated by CEA. All forms of investments carry risks, including the risk of losing all of the invested amount . Such activities may not be suitable for everyone. This is an overseas investment. As overseas investments carry additional financial, regulatory and legal risks, investors are advised to do the necessary checks and research on the investment beforehand. Details of Guaranteed Rental Returns will be accompanied with respective Sales & Purchase Agreement.