When you buy Thai property, you will need to work with an attorney. Because the Thai realty industry is not regulated, you will need legal support when buying real estate. Do not limit your communications to a real estate agent. Make sure you contact an attorney with your purchase or lease inquiries as well.
If you are an investor from another country, you will need to present your passport and a document called an Exchange Control form. If you prefer to buy through a company, you will need other documentation.
Buying through a Company – What You Will Need
When buying real estate through a company, you will need to present the following paperwork:
- A certified copy of an incorporation certificate
- A copy that has been certified of a memorandum of association
- Notary certificates
- A list of shareholders in both the Thai and English languages
- The minutes of a directors’ meeting, showing a resolution to buy Thai real estate
- A letter of advice related to a specific signature
- A power of attorney, if you are a director and need your attorney to handle the real estate transactions
- A foreign co-ownership letter
- Certified copies of the IDs of company directors
- The title deed for the property – usually a condominium
1. Conducting a Title Search
Before the documents and agreements are signed, you will need to have a title search conducted to make sure the property is owned free and clear, and you won’t have to deal with any later legal disputes. This is why you need to confer with a property services attorney. He or she can safeguard you and represent your interests in this respect.
2. Performing Due Diligence
Due diligence should be performed before any agreements are signed and deposits paid. Ask your lawyer to conduct a caveat search and confirm the real estate’s actual condition before you set out to buy the property.
Once the seller accepts your offer, his or her lawyer will draft a purchase contract. This agreement will specify which of the two parties will pay the transfer fees, legal fees, and real estate taxes. Also, a deposit of 10% should be paid during the signing.
In Thailand, deposits in escrow are not typical. Any deposit that you make, too, is non-refundable if you change your mind. If the seller changes his or her mind, you can get the money returned. If this happens, the seller will owe you twice the deposit amount in damages.
3. Reviewing the Contract
You will need to consult with a lawyer about reviewing the contract to make sure everything is covered in the terms and conditions. While it may be exciting to buy property, you can make some grievous errors if you don’t make sure you have all your legal bases covered. That is why you should always have a lawyer review your sale and purchase agreement and other paperwork.
When you hire a lawyer, you are making sure that your transaction will be successful and you will avoid any future disputes. Without a lawyer’s help, you can get into a good deal of legal trouble – trouble that can lead to excessive fines or even time spent in prison. Therefore, make sure you contact a lawyer first before buying Thai real estate.
How Long Does the Closing Take?
The closing for a real estate transaction normally takes about 30 to 60 days. The closing includes exchanging agreements and settling the remainder of the balance.
Transferring the Title
When both parties exchange contracts and settle remittances, the title can be transferred. Title deeds are submitted to the Land Department so they can be registered and government duties paid.
Reviewing the Fees
Transaction property costs include the costs associated with buying and reselling a property. These fees include lawyers’ fees, registration fees, taxes, agent fees, and notary fees.
The Transfer Fee
To transfer the property’s title, it costs 1% for a property that is valued at THB 3,000,000. That translates to about $85,700 in US dollars. Usually, the transfer fee is allotted at a flat rate of 2%.
The Real Estate Agent’s Fee
The fee of the real estate agent is typically 3% to 5% of the entire value of the real estate. This fee is normally paid by the seller.
Withholding Tax
A withholding tax of 1% of the assessed property value or the declared amount must be paid on the real estate.
Stamp Duty
The stamp duty is 0.50% of the assessed value or declared amount of the property, whichever proves to be higher.
Registration Fee
You must pay a registration fee of about 2% on the assessed value or declared worth of the property, whichever is higher.
Specific Business Tax
A specific business tax, also called a special business tax, is charged at about 3.30% of the property’s value.
Legal Fees
The legal fees that you pay can be negotiated with your attorney.
If you need legal advice or assistance from a qualified property lawyer, please contact us today.
