PROPERTY REPORT: UPDATED NOVEMBER 2007
It is a good time to buy property in Thailand. Banks are lending to Thais & property prices are GOOD. Thailand SET index has also been dropping as foreign investment is tending to shift to other countries. The situation with The Baht, is better than in the West due to Thailand keeping foreigners out from speculating. This means foreigners cannot buy land and escalate the prices like in the West where properties have gone well out of proportion on the 3:1 ration of payments to salaries. This has in fact kept properties in Thailand to a subsistence level and allows people to buy at reasonable prices apart from overseas companies speculating on land developments for condos with thai partners. Condos are the same and we will soon have reports on Pattaya, Phuket and Bangkok, Chiangmai for you..
.LAND AREAS: 1 rai = 4 ngarn = 400 wah2 = 1600 m2; 1 talang wah = wah2 = 4 m2; 1 acre = 2.53 rai & 1 ha = 6.25 rai
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 only.
- more than 49% of a condominium unless in Company form.If BOI status different
- foreigners can own land being not over 49% in a proper Business orientated company but cannot secure a mortgage. Under BOI can buy.
- if you invest 40m baht you can buy 1 Rai of land in Thailand outright
A 30-year lease can be a good idea with right to renewal to a freehold purchase, or a Thai company (7 PARTNERS) can be established with Thai majority shareholders. Foreigners only own 49% shares in a company but there are restrictions and rules to this as you must have a business running and audited. The other way is to lease for 30 years with R of R or to use an Usufract or superficies to assist you. We can assist you to make sure your company is safeguarded. Remember if you need advice ask us.
USING OUR SERVICES BUYING A PROPERTY ANYWHERE IN THAILAND:
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 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.WE ARE BOTH FOREIGN AND THAI OWNERSHIP
FOR ALL FOREIGNERS BUYING HOUSES IN THAILAND AND PROPERTY. ASK US FOR FREE THE BEST WAY TO BUY FOR YOUR CIRCUMSTANCES. YOU WILL NOT BE DISAPPOINTED.
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WHAT HAS HAPPENED IN THE WEST :
Thailand has laid excellent ground rules down to help their people whereas the Western countries have reached the point of no return. In the West good economies in the past has spurred low mortgage rates & sent the property prices escalating to the point where they are far over the safety factor of 3:1 median.for salaries to payments ratio. This has meant today first home buyers must borrow 100% or 45 year mortgages which in effect offers them another landlord or bank to pay money into for the rest of their lives thinking they own the house they are buying but in fact is a joke. It will never assist them to reach their goal of actually owning a house as their children will inherit their debt. How can it? when one borrows $100,000 this is what you pay back immaterial of interest rates = $250,000. Rule of thumb bouble the borrowing then halve it again and thats what you pay the bank back. In Australia, NZ, UK, USA etc most houses start at $250,000for just an average 2 bedroom home. So this you have to pay back $625,000. If you think you can pay it back in your lifetime don't kid yourself.
A Thai ruling 2 years ago when a motorcycle gang speculated in Samui saw the Thai Government change the rules for foreigners owning property. Foreigners have forever speculated in countries like Thailand for self gain only so the Thai governent put a stop to this by making companies have a business but not use to own a house in ones name. This has always been the norm and our company for one always explained this to home buyers who came via us. A lolly scramble ensured which mean't foreigners had to lease their houses and put the hoiuse under a Thai name. Gone then was having a company as basically a holding front to hold their homes. In countries like Thailand this is the best option to ensure against foreign speculators and we applaud the move. Look in every Western country and see what you now pay for utilities, user pays systems, expensive foods, restaurants, hotels, whatever then look at Thailand and see the reverse although this is changing slowly. Now see what is happening to the boom in the west --it is dissolving but the other prices remain the same. Democracy is slowly losing to the advent of fresh new rules in the west allowing for a more authoritative Police state. The rights of citizens are slowly being taken away whereas in thailand this is not the case. The Thailand Government look at their people thanks to having the longest reigning King in the world by their side. It has allowed the Thai people to enjoy a relatively good life without speculators from the west trying to change them. and we applaud this. Just think about it. What would happen if thailand followed places like the UK, USA & Australia and NZ --- Thais would never ever afford to buy a house in their own country. Protection is essential to sustain a democracy as in Thailands case.
WHY CHOOSE THAILAND :
Thailand is relatively safe and has all the amenities that a pensioner or foreigner could want. It has many hospitals and clinics and maid service is within easy reach. It has excellent food, climate year round and the transport services will not break your bank account and are excellent whatever one wishes to travel on. In fact it has lovely people, no attitudes and a well organised cultural system that we can only envy. The Thais look after their people which is a far cry from many westerners who put their old folk in homes to spend their last days so they can make more money. The chpice is yours but even with websites remember we have been around on the web now for 10 years and we also own excellent real websites: www.bangkokrealty.biz & www.chiangmairealty.com
BUYING YOUR HOUSE:
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 & the builders themselves. Remember there are no rules in Thailand and many builders are handymen and the building industry is not regulated so be careful when choosing the builders. Now that you want to buy a house what should you look for?
BUILDING YOUR HOUSE IN THAILAND:
The first thing you need to do is obtain the services of a reputable real estate agent or lawyer on your behalf. ( Try us as we are upfront on everything including after service support and we are experienced builders.) 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 if you intend to buy an existing building or in a new development block. So many foreigners have been hit by bad contracts, workmanship or nopt had the balance of work completed after giving the last payment to the developer.! 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 fault. 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 just had a case in May 2002 saving 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 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.
Recently in 2002 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 can be 1/2 of the asking price. Thus you are giving money away & in fact are being ripped off. 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 ask us. You also need to have a builder who can complete an average house in 3 months. Make sure the contract is overseen by a lawyer or ask us as we can give you a quote with times etc. You can fax to us: 00-66 53 894-210. 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 multi stories their deadlines and time limits. WE NOW OFFER THESE SERVICES.
A deposit of 30% is usually required to secure a property and total payments should be made within 30-60 days but normally once the transfer has gone through. If signing a purchase agreement then up to 30% down & 70% following transfer. 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.
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 TO PAY FOR YOUR PROPERTY
1/. Never pay deposit or booking fee over the Internet. See what you buy first
2/. Look at progress payment reports when, & how much
3/. Check the builder before you sign
4/. Talk to neighbours & others about the Moo Baan or buildings.
5/. Have a person on site to inspect interim work for you
6/. Do not be bullied into progress payments before work completed. If so then some middle man is getting his cut.
7/. When in doubt ask. Seek advice
BUYING A CONDO:
A foreigner can ONLY own a condo in his/her name. You cannot own a house and land in your name unless you invest 40m baht = 1 Rai of land. Bank's do not lend to foreigners; only Thais or Companies. We can not assist you with any mortgages so please ask your Bank.
Just a note about buying Condos. ---Find out what the monthly maintenance costs are from the managers. Get it in writing. Avoid unfinished projects as they may run out of money or be over mortgaged. If very few condos have been sold in a building with good amenities like landscaped grounds, security Guards and a receptionist and office have the title searched but most of all someone has to pay for all this, plus the electricity for lighting and lifts. The total cost (often inflated) has to be divided up among the condo owners, which can be a lot if only a few units have been sold. Ask for an exact statement of maintenance costs and how they are paid. If the project has different size condos in the same building, large units will pay more towards maintenance costs than small units. If you are a legal resident you can obtain a mortgage but you need to check with your bank and credit. The best idea though is pay cash as you can negotiate. In Bangkok look at around 48,000 -100,000 baht per sq m. A foreigner can only buy max 40% of a condo unit so if that 40% has been taken up and you are the 42% person you may find you are buying a lemon so to speak. If the developer owns a majority of units you may not like his manager but if the owners have majority votes than they can remove him. Check title before you buy --maintenance clauses --- and payment funds as well as 49/51% ownership on titles in the condo. Check rubbish, security, office staff, cleanliness, maintenance before you buy etc.
The Condominium Act has recently been amended. Now 49% of units in all condominiums and 100% of units in condominiums in a total development area under 5 rai located in Bangkok, all municipal districts and such other areas as shall hereafter be announced by the Minister of the Interior (which is expected to include rural Phuket) can be foreign owned, provided that the funds for the purchase have been remitted from aboard (which is the already the norm).
Are normally levied on the seller rated at between 3 & 5% of the asking price. Some agents are known to charge a commission from both the buyer and seller. Due to the unregulated realty industry you must use discretion when buying off any agent or person. If they say the price of a house does not include their commission, chances are this company is getting a cut both ends. Our company levies a commission solely on the "seller" & makes sure the person buying is getting the best deal for their money. Our charges 5% for businesses & 3% for land & buildings.
ONSITE INSPECTION REPORT:
If you want to make sure your house is safe and has what it should have & hasn't had recent false renovations, hidden maintenance, then we also conduct a professional onsite inspection house appraisal of the home you want to buy or sell. This inspection is over and above your title search but compliments the title search as we work in with our own lawyer. This 5-8 page onsite inspection report covers everything from electricity, inside and outside structures, water supply, plumbing, and general condition of your house & land, elevation etc in a check list report. Added to this we give you the buyer, a full written maintenance report plus our suggestions and recommendations all in English. We even oversee the recommendations on your behalf. Cost for this Inspection ranges from 5000 baht for new houses under 2 years old to 6000 baht for a standard 4-6 bedroom older house, condos 5000 baht as we look at the entire building ( This does not including away travelling expenses). Structural reports 5000 baht additional. We do not conduct land area searches as survey pegs are not shown. For this you need a surveyor which we can obtain for you. Other buildings like Commercial properties we can quote you. PLAY IT SAFE-- WHY HAVE A HOUSE THAT WILL NOT LAST!!!!!! As of May 2002 we have managed to assist foreign clients before they buy with the knowledge that the seller will initiate our recommendations & saved money for our clients.
We highly recommend you obtain a Title search and House Inspection report before you purchase ANY property in Thailand. Cost 7000 baht Comprehensive Title search as well as House Inspection fee starting at 3000 baht.
KITCHENS & AIR CONDITION INSTALLATIONS:
When buying an existing home or new house you may want to have a new western style kitchen installed or maybe air condition units. If we carry out a Housing Inspection then we also in our report have a free quotation for air condition units and kitchen joinery for you with FREE installation or arrange on your behalf. We can help you with the top Kitchen manufacturers.
[ Go see Kitchens ]
Ask no further as we use Khun Da in ChiangMai recommended to us who speaks excellent English and whom one of our partner's Dr. Harry Gair is presently using. We can arrange for you as many foreigners use her services.
We use the services of Thai Zurich for all your house insurance. Please just ask us as we are agents for Thai Zurich in Chiangmai. Need to know more then ask Thongjan 09-6311114. We can advise you on all your insurance needs & whether you go through us or you do yourself there is no difference in the price. However using our services we make sure you are happy before you even have to pay------- no hidden agendas. [ See more on insurance ]
WHY USE OUR SERVICES:
WE OFFER FREE EMAIL ADVICE 24 HOURS A DAY
- We work for you (Both Thai & foreign consultants )
- No hidden charges-everything is up front.
- Guaranteed conveyancy help & Company, work permit & land setup for foreigners
- We will sell your Commercial property, houses, businesses, bars and Guest Houses
- Because you have the benefit of foreign help with our Thai lawyers and expat consultants
- We offer: Full house onsite appraisals. Cost is 5000 baht for a house under 2 years old & 6000 baht for older houses ( plus travel if out of town ). This 5-6 page report is a must if you want to know what your house is really like which includes pics of repair work needed and we even do a air con survey (extra).
If you have a property to rent, sell or lease in Thailand then WRITE TO US as we can advertise for you in our hardcopy news in Chiangmai .
BANGKOK REAL ESTATE Please go to : www.bangkokrealty.biz