What Are the Requirements For Foreigners Buying a Condo In Thailand?
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.
- Be mindful of the underlying requirements and restrictions before purchasing a property.
- Know all the legalities of ownership under Thai law.
- Keep a close eye on the sale and purchase agreement.
Can Foreigners Apply For a Mortgage in Thailand?
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.
What is Disclosed Under the Condo Unit Sale and Purchase Agreement?
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:
- Exact details of the unit,
- Exact details of the parties,
- The agreed price and payment schedule and possible deposit,
- Transfer date of the condo at the land office,
- Responsibilities for transfer fees and taxes,
- Warranties of the seller and buyer and matters relating to due diligence.
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).