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Welcome to
-----ChiangMai,
Thailand's foreign / Thai Real Estate company offering you real estate services all over
Thailand
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To date foreigners may
own
- a unit in a registered Condominium
- a
building (as distinct from its land)
- a
registered leasehold of up to 30 years for all types of titled land
(and/or buildings).
- a company can purchase land and buildings but will be inspected and
all Thai shareholders veted.
- more than 49% of a condominium unless in Company form.
- foreigners can own land being 49% in a company but the company must operate a business & shareholders interviewed so not that easy anymore
- if you invest 40m baht you can buy 1 Rai of land in Thailand outright.
We receive our commissions off the seller
or landlord and no added charges are imposed on you the buyer or renter.
What we make sure is you get a professional service with no hidden costs, plus
we help you with your lease agreements and oversee everything you need. You may have a Thai friend who says they can
get you a better deal. Unbeknown to you they may be getting a
commission or even 2 plus a scheme --can
you read Thai??. Using our services we guarantee that the lease and selling documents are in order as we have our own
Barrister at Law. Please do not ask us for mortgages as we cannot help unless
you are married to a Thai or own a Thai Company.
Thailand has so many different types of
properties for sale that whatever your dream home is, you can realize it
here if you do the paperwork right. Prices are a lot cheaper than
Western houses but some aspects need close scrutiny especially wiring,
water & most importantly the deed title. Now that you want to buy a
house what should you look for?
The first thing you need to do is obtain the services of a reputable
real estate agent or lawyer on your behalf. The Thailand Realty Industry
is not regulated so watch out for agents forcing you to sign contracts,
& check the title
deed to make sure the property is what it says. Do yourself a big
favour and obtain a House Inspection report which in effect pulls the holes
out of the property! Some buyers have bought
the house only to find the land is on a different title & visa versa
or the cracks have been disguised. Once you buy then its your problem. Many Estates will try to sell a house in a developing block which
has but one title with say 10-20 houses on it. They probably have 2
mortgages and want to unload the houses before they pay off the loan
& secure the titles for their owners. Or will they???--- we had
a case & saved the foreign buyer 2.8m baht that he would have
lost if he did not use our service. The same goes with the boundaries of the property which need to
be the same as the title deed. In Thailand there's no survey pegs as
such but they do use concrete pegs & it is an important point. Sometimes vendors deliberately
understate property area or move so called pegs. If the building is under construction or
the land is having a subdivision look carefully at the provisions for
issuing a title, and easement rights for say roadways. if you are a foreigner you can
lease for 30 years or form a company to hold the house. Remember also
do not start a company for the sake of securing your house. If you do
not carry out business and do not have employees ( and I mean NO
nominees that your law firm has provided) you will find yourself in hot
water.
WHAT
IT ALL MEANS:
Sor Kor 1 This document means that land occupants are occupying or making use of
certain land plots, whose ownership has not been claimed by any entity.
The document does not indicate legal possession of the informer so one
cannot transfer the ownership of the property to any one else. The Sor
Kor 1 is rare now as the government's land ownership legislation has
covered most area of the country.
Nor Sor 2 states the government's permission for person or legal entity
to make use of land temporarily. Need to utilize at least three-quarters of
the land plot within three years after the document issuance. This right is non
transferable. At the finish, land occupants can seek the right to demand
higher privileged title deed.
Nor Sor 3 is a governmental letter certifying a utilization of certain
land plot by certain people and that the plot of land has been surveyed and
its official map created.
Nor Sor 3 A is similar to the Nor Sor 3 certification. The only
difference is the map survey of the land plot based on an aerial-viewed
photograph of the land.
Ownership Title Deed or chanote is the ultimate certification of
land ownership. Holders of the title deed have full rights to transfer
or sell the properties and to bar other parties from violating their
rights over the land protected by the ownership title deed law.
BUILDING
YOUR HOUSE:
Recently in 2007 we have been asked to
help foreigners who have paid too much to have their house built. Please
note the following----there are 3 types of builders in Thailand:
1/. A builder 2/. A broker 3/. a
worker/builder. Those who have been caught out are using (2) which could
be a friend who procures a builder for the foreigner then has a separate
contract with the builder for his cut which is 1/2 of the asking
price. Thus you are giving money away & in fact are being ripped off
as inevitably the actual builder will never be able to meet his
deadlines. Plans & fees etc should not be more than 50,000 baht yet we
have seen charges of 400,000 baht. The fees for 1 sq metre is 1/2 a
satang which is not even a baht. If you need a good builder in Chiangmai
and architect refer to your architect for the prices. You also need to have a builder who can complete
an average house in 3-4 months & check his equipment and formwork
supplies, how many workers he/she has & work he/she has carried out.
Talk to the referrals & your architect to see if they keep to their word.
Remember also
Thai holidays workers will stop work on buddhist holidays and funerals etc. Make sure the contract is overseen by a
lawyer or ask us as we can give you a quote with times etc if you want
us to do. Tel (00-66)019527812. We have seen single storey houses charged
at 6.8m baht when the price should have been 1/2 this. Just remember
having a Thai friend doesn't necessarily mean they are a builder---they
are only getting a commission --when it comes to progress payments and
they ask in advance you could find yourself in a bad situation. Itemize
the materials and also how many men they will have on the job and also
if building multi-stories, their deadlines and time limits.
Prices per sq metre to build are approx:
8-12,000 baht or more as labour is expensive in 2018. But, remember this will vary according to the extras and
items like marble and appliances etc.
OFFERS FROM DEVELOPERS
All developers in Thailand can
and will offer you discounts and extras just to get your business. If
youre not happy with some detail ask to change or add on to. Compare what
they might offer you with what you would like. Look for Special
home loan packages, Extra loan rate -- nowadays, local banks offer home
buyers rates that are even below their minimum lending rates (MLR),
Discount on land price, Gift voucher, extra room etc & ground
maintenance. Have everything in writing. If the phone doesn't work and
they say it will be installed next week or month don't believe a word same
with the water, gas lines if any etc. Do not pay a booking fee as then you
are locked in. Never put deposit down until your lawyer has searched the
title out.
ESCROW SYSTEM When making a down payment on unfinished project, protect your
money from fraud by the Escrow account system which will ensure
your money will not be paid, unless the developer completes construction
of your new home and meets the agreed requirement on specification. If
you decide to build use a [ lawyer ]
FORMING A THAI COMPANY Some people will say this is the best
idea for a foreigner to hold a house in ones name. However with a Thai
company yes you can hold a property within the structure of the company.
However be warned that if your books show nil profit after 3 years then
you may be asked especially by immigration & the Commercial Reg via
the tax dept why?? This may affect your visa and the status of your
company after that period so be warned if you are told its easy to do.
It is, however its also easy for the Commercial Registration Dept to
fine you if you are not in profit mode or even take the property from
you??? Wait and see.
USUFRUCT OR SUPERFICIES THE BEST
Usufruct Interest (Sidhi-kep-kin) - gives you temporary ownership rights to structures on or arising from the
land. In practice, a usufruct is limited to a 30 year maximum period;
like leases, the agreement can be successively renewed. In contrast to a
lease, a usufructury interest can be sold or transferred, although it
expires upon the death of the holder of the usufruct and therefore
cannot be inherited. This is better than a lease which by law can only
be for a period of 30 years.
THE BEST OPTION FOR FOREIGNERS BUYING PROPERTY IN THAILAND AS AT 2018 IS AN USUFRUCT OR SUPERFICIES
USEUFRUCT INTEREST OR (Sidhi-kep-kin) -
gives you temporary ownership rights to structures on or arising from the
land. In practice, a usufruct is limited to a 30 year maximum period;
like leases, the agreement can be successively renewed. In contrast to a
lease, a usufructury interest can be sold or transferred, although it
expires upon the death of the holder of the usufruct and therefore
cannot be inherited. This is better than a lease which by law can only
be for a period of 30 years. The usufruct is a right granted by an owner of land in favour of a usufructuary and the usufructuary has the right to possess, use and enjoy the benefits of the property. In other words, a usufructuary normally has the right to exploit forests, mines and quarries but also where a foreigner wishes to buy land and house. The rules concerning usufructs are similar to leases but we feel a lot better for foreigners as they can still transfer but in a situation of a young single person aged 21yrs he has a long duration period and he can change the status.With a lease although many will say 30 x 30 this is not legal and the status can change anytime in the future if one has used this option or been told this
ANOTHER WAY IS THIS:
SUPERFICIES:
Is the right granted by law AND BY an owner of land in favour of another whereby the superficiary is granted the right to own upon the land, buildings, other structures or plantations. It is similar to a lease, and the rules concerning leases apply to superficies. Often, what many people believe is a lease is in fact a superficies.A foriegner as a tenant can own the house he built on upon a land; not terminated by the buildings collapsing or destroyed, even by force majeure;they are transmissible to the heirs in say the UK. Superficies are granted for a period of 30 years and can be renewed per period of 30 years at a time and is registered at the land office and recorded on the Land Title. The right of superficies can be terminated only “If the superficiary fails to comply with any essential condition specified in the act creating the superficies or, when rent is to be paid, he fails to pay it for two consecutive years”;
IF MARRIED TO A THAI :
The foriegner can get a right of HABITATION to live in the house and occupy the same land until she or he passes away.This is a good idea for any foreigner but make sure your spouse has a will drawn up leaving the property to the foreigner. The foreigner must sign a declaration that the property is a gift & will not expect it back. Can also draw up a lease or USUFRUCT but it is important to protect oneself if for example the Thai spouse passes on before the foreigner.
WHY NOT A LEASE :
A lease is a contract which allows a person to use the property in question for a deemed period of time -normally 30 years and to pay some rental fee which is agreed upon. Those who have 60 years?? well its really 30 years only!!! One can use a lease to be nearly the same in content as superficies but under the law for superficies you have the distinct advantage that the clauses have been passed into law and are law like allowing your heirs to inherit that said property. A lease does not have this.
BUYING FROM BROKERS, AGENTS, DEVELOPERS :
There are no laws governing the real estate procedures so if you buy or put down a booking fee be aware you do this knowing the deal may not go as planned. Getting your money back is a drawn out process that will go on and on. Real Estate is not a closed business nor does one need to register so you the buyer must beware when you purchase in Thailand caveat emptor prevails.. Some buyers have seen pictures on the net then sent a booking or deposit fee to the Realty company --- then seen the property hasn't even been built. Do you think any of them get their money back--the answer is NO. Do your homework first. Some developers offer a buy back, or the guaranteed prices rise when selling or a guaranteed rental figure per month for your property but again take all this with a grain of salt. Who can guarantee rentals in Thailand; who can guarantee you will double your money when selling so when you see this BEWARE --- noone can and certainly not a realty company whose one aim is to make profits so be warned? In such cases you may like to get your lawyer to check on the Property Developer???. You will notice in thailand there are many developments that are incomplete -- a trend in Thai development. Many of these are underfinanced and they run on the assumption that many is better than a few. This year alone steel prices have risen 5 fold; concrete also has increased but the developers lack the foresight to consolidate their building work so instead of building one unit to finish the build 20 unfinished. The developers sales reps are now hard pressed to sell these properties so it is impotant to view what you see and even have copy of the chanote (Title) checked by your lawyer before any monies change hands. We had a case where a well respected Housing development sold a unit to an foreigner before checking the title. Lucky for him we managed to change but the when we checked the title the developer was building 15 units on 1 title --- and saying the titles will be issued in 1 year. In cases like this its easy to say NO THANKS. A very good Lawyers meassage: if an owner says the power transformer will be in next month; or the phone line is going in 1 week after settlement; or the road is being repaved over in 2 weeks --- DON'T BELIEVE IT & ACT WITH CAUTION.
MORTGAGES:
CAN YOU BORROW MONEY
A foreigner cannot hold any mortgage in
Thailand unless he/she has a company WITH FINANCIAL STATEMENTS so must
be in business for one year minimum and have yearly audit and profit
mode. Therefore a foreigner must use his
wife to apply for the load in which case the house will be in her name.
You can borrow around 60-80% from a Thai Bank depending on which one you
use. There is a 1% service fee charge and interest is 4-7% depending on
the bank & 1-12% for businesses but this rate does change. You must
apply yourself. We cannot assist you
with any mortgages so please ask your Bank. If you have a Thai
wife then she can assist you. It takes approx 1 month to be approved or longer.
Buildings apart from condominiums do not
have any form of title document, but their sale or long lease can be
registered at the Ampher (district) land office. Proof of ownership,
must be established either from proof of construction or document
showing previous sale-purchase (not to be confused with the House
Registration document, which is only a register of the house's
occupants). When buying a condo or property please remit through
the National Bank and have record that you are using the money to
purchase the property.
PAYMENT & REMITTING FUNDS TO THAILAND:
A deposit of 10- 30% is usually required to
secure a property and total payments should be made within 30-60 days
(see your lawyer first) but normally once the transfer has gone through. If signing a purchase
agreement then up to 30% down & 70% following transfer. Normally the
seller will pay the changeover tax which starts at 2.5%. However if the
seller has owned the house longer than this [period it is discounted.
Some Land Offices will charge up to 8% depending on the area and office.
An agreement can be made between buyer and seller than each pay 50%. You can obtain longer periods but you will probably be required to
pay a higher deposit. Deposits are normally non refundable, except by
default of the vendor, so bear in mind that once the deposit is placed
you are committed.
This situation also prevails for the vendor. He must refund your deposit
and pay a penalty of an equal amount if he defaults on the contract.
Deposit in escrow is still rare in Thailand, but it is becoming an
increasingly recognized way of proceeding. It generally trades off
greater security for the buyer's deposit versus a weakened claim for
damages in the event of vendor default.
Beyond the price, payment and closing schedules, it's important that a
contract includes clauses to cover who will pay the legal fees, transfer
fees and taxes (there is often a business tax and always an income tax
assessment made at time of sale) as well as an understanding of the
value at which the sale will be declared - this is typically (for tax
reasons) at or close to the government minimum assessed value.
A foreigner buying a condo must transfer
funds from a bank account out of Thailand in foreign currency and verify
the transfer on paper. The transfer of funds must be in the same
name as the name that will appear on the final purchase contract ie. the
buyer. Funds must be transferred into a Foreign Currency Account in
Thailand opened in the Buyer's name. Use Bangkok Bank, Thai Farmers Bank
and Siam Commercial Bank and make sure you tell them that the purpose of
his or her opening a Foreign Currency Account is to purchase a condo in
Thailand. This law is somewhat a catch 22 situation as the Foreign Banks
usually will not write such a letter but don't worry. You can remit as
much as you like to Thailand via your bank. Transfers out of this Foreign Currency Account in Thailand
into a Thai Baht Account or some form of Thai Baht draft or check to the
Seller must be made in amounts US$5000 or more in order to qualify for a
"Tor Tor 3" Certificate issued by the Buyer's bank to verify
that the originating funding came from outside Thailand in a currency
other than Thai Baht. On the "Tor Tor 3" Certificate, it
should state explicitly that the Thai Baht funds are used "to
purchase a condominium" in Thailand. Taxes are payable by the buyer
or seller of a condo in Thailand such as the Transfer Fee/Stamp Duty Tax
of 0.5% usually payable by the seller upon the date of the actual sale
or a Special Business Tax of 3.3% which is usually payable by the seller
if the property has been owned for less than 5 years. By the way there
is no limit on how much you can remit into a Thai account from overseas
and no tax. Tax levied at 15% is on interest earnings only.
REMITTING FUNDS:
If sending over funds to
purchase a house you must tell the National Bank what you are using this
money for with sums exceeding 2,000,000 baht quantities. If remitting
funds from abroad to purchase property which is the law over sums of 2m
baht It may save you a headache when it comes to a divorce situation of whose funds
were used to purchase the property. If you wish to
know more than ask us. Money to buy must be from abroad and no sums under $US5000 accepted and name of buyer must be same as funds remittance.
