Investing in Thailand for the first time? Here is a checklist of what you will need to know.
1. Property Rights: Can all nationalities own land, houses and condominiums in Thailand?
2. Buying, selling, or renting: What are the laws governing your act?
3. Under-declaring your property: Is it safe and how to protect yourself?
4. Presale VS Resale
1. Property Rights:
All nationalities can own condominium units in Thailand as long as 51% of the project is sold only to Thai nationals and the developers will monitor this percentage themselves. Therefore, as a buyer your main understanding should be, if a sales person approach you then they still foreigner’s quota available for sale. Only thai nationals or companies registered under Thai law can buy land, houses or other properties perpetually attached to the ground. Therefore, as a foreigner, your rights of property ownership are limited here. Back to Above
In order to buy land or a property title that includes land size such as buildings, houses and villas, you need to open a Thai company which is a recognised juristic entity by the Kingdom of Thailand. This is a fairly simple procedure and however, you will need a Thai national as a partner holding 51% of your company shares. The best way is to dilute the 51% to several people, this way it will ensure that you will still have control over your company.
If you have held your asset for longer than 5 years, your ‘sale’ taxes will be lower in the perspective that you have used that property as a residential asset. However, if you are reselling your assets which you have bought for less than 5 years, your ‘sale’ taxes will be slightly higher, depending on the property price.
Renting out your property to a company that will deduct taxes from you is a fairly common procedure. The reason being the company can use their expenses to deduct their profits and thus in turn reduce the company’s taxes. According to Thai Law, a landlord shall incur 5% withholding property tax from the tenant on the agreed price, so that the Revenue Department can track down the income of the landlord if it is not declared. In practice, only companies acting as tenants do this to reduce their own taxes.
3. Under-declaring your property
4. Presale / Reselling
Presale is a short and busy moment in which people will buy a property in the hope that the prices will go up. In Thailand, we love this word. In many cases, it may only be close networks within the developers or closely following the project to be able to receive this opportunity.
Whereas Resale moments depend on the location, project and timing.
Investors wanting to buying at presale? Buying a pre-construction condominium unit? Looking to resale your condominium unit?