If you are a Thai/foreign couple, one of the things you need to decide when buying a condominium in Thailand is whose name the condo should be registered under. Let’s take a look at several factors to consider when deciding to buy a condo under a foreigner or Thai name.
When it comes to international real estate ownership, Thai law is very restrictive. Buying a condo is usually the only way for foreigners to buy real estate in Thailand directly. Foreign condo ownership is subject to two key limitations. For example, foreigners are limited to owning only 49% of a single condominium building. The total area of foreign-owned condo units must not exceed 49% of the total area of all saleable condo units. If you’re purchasing a condo from a Thai resident, make sure to check with the condo association office to see if the building hasn’t hit the foreign ownership limit.
The second restriction on international condo ownership is that the foreigner must pay for the condo in foreign currency. It is important to carry foreign currency into Thailand and exchange it for Baht while you are here. Ensure that the money transfer originates from an external account in the name of the purchaser and is carried on to the account of the seller. For large foreign currency transactions, Thai law includes the filing of a Foreign Exchange Transaction Form (FETF); make sure you keep copies for your records.
These restrictions are typically not a problem for foreigners wanting to buy a condo in Thailand under their names. However, if the condo you’ve been eyeing has exceeded the 49% limit or if you don’t want to pay for the condo in foreign currency, then using your Thai partner’s name might be the better option.
While foreigners can get access to mortgages in Thailand, the options are limited. The loan conditions imposed are typically less favourable than local buyers as well. Also, since foreigners must pay for the condo in foreign currency, you are likely to be prohibited from funding your condo purchase with a mortgage.
On the other hand, a Thai citizen with a great credit history and a monthly salary of at least 15,000 baht can get a mortgage from a Thai Bank. This is why most foreigners choose to register their condos in the name of their Thai partner. Doing this simplifies the whole process and allows them to make monthly mortgage payments.
If the condo costs more than 1.5 million Baht, the Thai partner must earn more than 30,000 Baht a month to qualify for a loan in this amount. You should bear in mind that Thai law forbids foreigners from financing a property for their spouse and then claiming ownership of the condo.
Any form of cash provided to a Thai partner will be regarded as a gift, and you will have no claim to the property you purchase. This ensures that any condo purchased using this method remains the Thai national’s property and they will have the legal right to remove you and maintain possession despite not having paid any money.
The selling and purchase agreement is the most important part of buying a condo in Thailand. This is the finalised contract between the seller and the buyer until the transaction is permanently closed. When buying a newly built condo unit, both the developer and the buyer must follow rules set out by condo and consumer protection legislation, and the buyer benefits from the law.
The contracts in a private condo resale or a leasehold sale are regulated by general contract law and the parties may negotiate to different conditions that favour one party more than the other. A condo selling and purchase agreement should include:
Whether you buy the condo under your name or your Thai partner’s name, you should do an analysis of the sale contract and also perform a standard due diligence check at the local land office before handing over a deposit or signing a contract to ensure that the seller is the owner of the condo unit and is free to sell it and that foreign ownership is allowed in the condo (if you buy it under your name).
Whether you buy the condo under your name or someone elses name, you should do a professional analysis of the contract.
At the time of the transfer and registration of ownership at the Land Department branch, a regular Thai script selling agreement will need to be signed, this does not affect the parties’ private agreement.
When purchasing a condo the seller must carry all original unit papers, including the ownership deed and the tabien baan, as well as a letter from the condominium juristic individual stating that the condo unit falls under 49% foreign ownership limit and a letter stating that there are no unpaid fees for the unit. Other documents required at the sale include a Thai script land office, a marriage or divorce certificate, a Tor Dor 21 power of attorney if anyone is representing the buyer, and a cashier’s check guaranteed by a bank for payment of the balance of the purchase price. As well as proof of remittance and currency exchange into Thai baht (FET documents).
Always be aware of the sales and purchase agreement when buying a property.
Traditionally referred to as “Thor Thor 3,” the Foreign Exchange Trade (FET) is a form necessary to the Land Department to register and show its ownership. According to BOI banking regulations, any dealing with the exchange of foreign currency more than $50,000 USD must prepare a FET form and report the transaction to the Bank of Thailand. An original copy of this form with their name as the recipient is a mandatory document for registration of ownership at the Land Department for foreigners buying a condo, as it is proof of the foreigner’s compliance with section 19 of the Condominium Act.
If amounts less than $ 50.000, foreigners will ask the bank for a confirmation letter for the foreign currency transfer and conversion into Thai Baht. The details in this letter are the same as on the FET form, and it can also be used to register with the Land Department.
Buying a condo under a Thai name or under a foreigner name have their own pros and cons and really depends on your specific conditions and needs. For some couples, putting the property in the name of a Thai person might be the only option, and it all boils down to trust and relationship stability.