A foreigner can buy a condo in Thailand. A foreigner cannot buy land or a house in Thailand. There are ways, however, to get around buying a house.
When one is considering living in Thailand or buying property as an investment for renting out, one must consider whether it is more individually beneficial to buy the property or rent it. Most rental contracts do include sub-leasing privileges.
If you intend to obtain property for your own residence, whether permanent or when you are present in Thailand, one of the advantages of renting is the ability to simply walk out if the need to do so ever arises. If you own property for your personal residence, one of the advantages is the ability to resell later at a profit or eventually rent it out.
First, buying a condo. A foreigner can buy a condo in Thailand under his own name. The law allows 49% of all units in an individual condo to be foreign owned. The rest of the units must be Thai owned. In other words, if a condo has 100 units, 49 of them can be sold to foreigners.
If you have the means to pay cash, you can buy a condo that way, of course. Many condos offer financing terms, especially new condos or condos under construction. Mortgages are available to foreigners. At the time of this article, Bangkok Bank offers mortgages to foreigners.
A house is more complex. There are housing developments that have actually been designated as condos. Those, therefore, can be purchased under a foreigner’s name. However, a foreigner cannot buy a standard house under his own name.
In times past it was possible to establish a Thai corporation and buy property under the corporate name. However, Thailand no longer permits that. If you already own property under a corporate name, Thailand has not grandfathered in the restrictions, so you do not have to fear losing your property.
You can, however, buy a house under a Thai citizen’s name. The way that is done is to buy the property and take out a long-term prepaid lease on the property. That is done at the time of closing and it is highly recommended to do it through a competent Thai attorney. All at one time, the final payment on the house is made. The rental contract is signed. Then the rental contract is registered at the local Land Office, thus making the property effectively your own for the duration of the contract.
There are pitfalls to consider. The Thai person with whom you are working must be someone you can be absolutely certain you can trust, especially if you are financing the purchase. There have been cases in which a foreigner makes payments on the house, and then when the final payment is to be made the Thai person, in whose name the property is being purchased, makes the final payment himself and now the house is his. There would be nothing you could do about it. Also, if you buy the house without taking out a lease, then at any time the Thai person could force you out since the house is in his name. Also, when the long-term lease expires, the Thai person could refuse to renew the lease.
Another consideration is resale of the house. Because the house is in a Thai name, there would be nothing to prevent him from selling the house once the lease expires. If you have no lease, then there is nothing to prevent him from selling the house out from under you at any time.
There is also nothing to prevent him from taking out a mortgage on the property, whether via a bank or legitimate financing agency or via an individual. If he does not pay off the mortgage, then the house becomes the property of whoever is holding the paper. However, if you have a long-term lease, the lease must be honored no matter whose name the property is in.
Obviously, buying a condo eliminates those risks, but there are still risks to consider. If you are buying a condo that is under construction, there have been incidents in which major delays, sometimes for years, have occurred. There have also been incidents in which the builder goes bankrupt or simply abandons the project and it becomes extremely difficult, probably impossible, to recover the money you have already invested. If you are buying a condo under construction, it is essential to make certain you are dealing with a reputable company with an established reputation.
If you are buying an established condo, it is also necessary to check for any problems before you buy. The types of problems people encounter have included maintenance fees, but little or no actual maintenance. There have been “condo commando” types of problems.
Other considerations include general condition of the building itself, location, availability of transportation, parking, security, fire escapes, sprinkler system protection, condition of elevators, proximity to shopping, etc. You should also check things such as the availability of Internet or how well WIFI works in the unit you are considering.
Provided that you consider the risks and check all that needs to be checked, property ownership can be the best way to reside in Thailand for a great many foreigners. It all depends upon your own needs and desires.
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