The real estate market in Thailand is a very popular one among tourists. Whether looking for a place to settle after retirement or acquiring a home while working in the country, Thai real estate is in its prime. A large contributing factor to this is the fact that the capital Bangkok receives over 20 million tourists every year.
You might first wonder, is investing in property in Thailand really worthwhile? When you look at the currency of Thailand, the Thai Baht, it is one of the most stable existing Asian currencies. In addition, the general property market and economy of Thailand has been quite stable for over a decade, and this low crash risk makes their property market very appealing to investors. Finally, Thailand’s proximity to four pre-emerging markets puts it in a prime position as the select choice for investment and serves as a hub for traversing between those markets.
If you are looking to purchase property in Thailand as an investment opportunity, there are some important factors you will need to consider and information you need to know. Follow these guidelines to help steer yourself in the right direction.
How to Approach the Purchase?
You have several options open to you for processing your transaction when considering investing in property in Thailand.
- Real estate agents can help you throughout your acquisition process, especially if you do not speak the language. They will be able to provide you with information regarding the available properties and point you in the direction of a real estate lawyer, for a percentage commission. If you decide to go this route, ensure that your realtor is highly reputable.
- Property lawyers will be able to provide assistance in processing the transfer of sale of property, while providing sound legal advice. You may do a search through the land department to find properties you may be interested in investing in. This will eliminate the need for a realtor, and then you can employ the services of a lawyer to complete your transaction and save some money.
- If you find reputable developers from whom you wish to purchase property, it might be more convenient for you to make a direct purchase through them. They facilitate the entire transfer process and relevant paperwork, which completely cuts out the middle man. In addition, contracting the services of an inspector to inspect the property before the close of sale will ensure that any issues with the project will be fixed by the developer free of cost.
Are There Restrictions For Foreign Investors?
As a foreign investor looking to purchase property in Thailand, it is important to note that there are certain restrictions for non-nationals. For example, if you are looking to invest in a condominium project, it is useful to know that you are not allowed ownership of more than 49% of the units, or in the case of a business, not more than 49% share ownership. The only exception to this rule is for American citizens, who can fully own a business under the terms of a special Amity treaty between Thailand and the United States.
If you do not live in Thailand, you can be allowed to travel and conduct business as an investor if you apply for a non-immigrant visa investment. This is a special visa which lasts for a year, but can be renewed indefinitely, if you have invested at least ten million Thai Baht in properties, or other financial instruments in Thailand. This visa facilitates the necessary travel you will make in and out of Thailand to service your investments.
What Are The Applicable Taxes?
With the exception of condominiums, an annual property tax applies for all other property you have invested in. You will however pay annual management fees for the maintenance of your condo building.
During the purchase process, the 2% transfer tax is shared equally between buyer and seller. Related to the transfer, a 0.5% stamp duty must be paid by the seller. If the sale transaction is completed within less than five years, then a specific business tax of 3.3% must be paid instead of the stamp duty.
If you have rented out your acquired property, the government deducts income taxes from the rental based on their threshold.
What Are The Prime Locations For Property Investment?
Thailand has many locations for selecting property for investment in the capital Bangkok. If you are looking for an office building for sale, the prime business districts of Silon and Sathorn in Bangkok are your choice locations.
If you are looking for condominiums, Pattaya, Phuket, Sukhumvit, and Riverside, are good areas to conduct your search, and you will find a variety of price ranges based on what you are looking for.
If you are looking for residential housing, Chiang Mai, Ratchathewi and Lumpini are popular locations.
If you are interested in beachside property, then the resort area of Hua Hin is where you want to look.