RESERVATION & PURCHASING
A reservation fee and down payment deposit is required from the buyer to secure the booking of a unit. Once the project has been completed, the remaining amount should be paid in full. Sunplay also requires a copy of the buyer’s national passport. For foreign buyers who have previously purchased property in Thailand, it is necessary to ensure that the spelling of the buyer’s name in Thai is identical to that used for previous purchases. Buyers can purchase property in Thailand via:
- Booking by cash or credit card.
- Overseas foreign funds transfer.
The requisite information a buyer needs in order to transfer payment to either a Bangsaray Heights Limited or Sunplay Villa Development Limited bank account or an account designated by Sunplay is as follows:
- Bank account name
- Bank account number
- SWIFT code
- Bank name
- Bank address
- Purpose of transfer (i.e. Purchase of property)
SOURCE OF FUNDS DECLARATION
Non-resident foreigners who buy a condominium in Thailand must present a Source of Funds Declaration to the District Land Office when registering ownership. All funds must be remitted into Thailand as foreign currency, after which the receiving bank will exchange the amount into Thai Baht.
FOREIGN EXCHANGE TRANSACTION
The receiving bank will issue a Foreign Exchange Transaction Form (FET) for amounts greater than USD 50,000 and a Credit Note for lesser amounts.
Buyers with bank account opened in Thailand may transfer money from the account directly to the seller’s account. However, buyers shall request the bank to issue a Foreign Exchange Translation (FET) form to use as an evidence for registration of ownership at the Land Department.
Buyers can also transfer money to the seller’s bank or issue bank draft payable to the seller and the seller then applies for issuance of Foreign Exchange Transaction (FET) form to use as evidence for registration of ownership at the Land Department.
Note: The amount transferred must be equivalent to or slightly higher than the selling price to show at the Land Department.
An overseas transfer must be issued with evidences to get approval from the Land Department. The money transfer must be made under the same name as appeared in the purchasing contract and must be foreign currency only. Buye
rs must specify the objective of the money transfer in the payment order.
CUSTOMS DECLARATION FORM
It is necessary to declare the amount and currency to customs, who will issue a receipt for incoming funds. The receipt can then be presented to the bank in order to acquire a Confirmation Letter.
It is recommended that foreign buyers consult a lawyer to assist with their purchase.
WHAT ARE MY RIGHTS PURCHASING PROPERTY IN THAILAND?
There are specific rules and regulations that govern the purchase of property by a foreigner in Thailand. These are summarized below.
- A foreigner can own a condominium freehold as long as Thai nationals own 51% of the condos or apartments in the building by sqM.
- If not, then leasehold is the only option available to foreigners.
- A foreigner can lease land or condominiums for 30 years, with an option for another 30 years. The owner can own the house which they build on the land. Based on our research, this option is commonly used when purchasing property in a modern residential development.
- A company can own property such as land and a house (and hence a foreigner can buy land and a house via their company) as long as total foreign ownership of the company does not exceed 49%.
A MORE DETAILED ANALYSIS OF BUYING PROPERTY IN THAILAND
The following is a summary of the basic principles of Thai property ownership.
Am I allowed to buy land/property? Although Thai law (the Land Code) prohibits foreigners from owning land in Thailand, there are legally tested ways in which foreigners can effectively own or have control of land and still comply with existing Thai laws. The following three procedures are the most common:
Foreigners can own a condominium in their own name, providing that not more than 49% of the aggregate unit space of the entire condominium development may be owned by foreigners.
Once the foreign quota is full, foreigners can still lease condominium units and these leases can be registered with the Land Department. Foreigners also sometimes establish a Thai company and acquire the freehold of the condominium unit.
Foreigners who are not resident (work) in Thailand must bring the money to purchase the condominium unit in from overseas and must provide evidence to the Land Department when transferring the unit.
Apartments (where the building is not registered as a condominium) can also be leased long term.
THE PURCHASE OF LAND THROUGH A THAI LIMITED COMPANY
Buying land property in a Thai company name is a popular choices among foreigners who wish to acquire an interest in freehold land in Thailand (as opposed to the leasehold option below).
In order to comply with Thai law, the majority of the shareholders of the company must be Thai and must hold at least 51% of all shares. The foreign shareholding can hold a maximum 49% of the registered share capital.
In previous years, nominee shareholdings (where the Thai shareholders were simply named individuals with no financial interest in the company and with weighted voting rights being given to the foreign shareholders) developed as a way of giving foreigners control of the company’s affairs. However, the Thai Government cracked down on Thai companies set up with nominee Thai shareholders.
Now every company with foreign promoter shareholders and/or directors is subject to scrutiny) and disproportionate voting rights, which has led to a change in the initial company set-up.
REGISTERING OF A LEASEHOLD INTEREST
A registered lease is relatively uncomplicated and easy to acquire and register. A long term lease can be held and registered in your own name (no company required).
Foreigners are permitted to lease land in Thailand for a maximum of 30 years with an option to renew for a further 30 years. A lease registered with the Land Office remains in force throughout the term of the lease regardless of whether the freehold owner sells or otherwise transfer the freehold.
However, even though the land owner may agree to a renewal clause in the lease agreement it is uncertain whether this right can be enforced against purchaser/successor of the freehold interest.
If the lessor is a company and the company is sold, as opposed to the land held by the original lessor, the situation would not change and the new shareholder would then have to deal with the lessee based on the original lease agreement.
The vast majority of cases are transactions where landowner are companies. These lease agreements often have additional safeguards in relation to sale of the land by the company/owner. As opposed to land, a foreign buyer can have the ownership for a house registered in his own name although with only a lease of the underlying land.
Be aware that this is merely a summary as a reference guide. We suggest that you should seek advice from qualified legal counsel when leasing or purchasing a property in Thailand.