Connect with us


Phuket Property: How to acquire Thai property

Legacy Phuket Gazette



Phuket Property: How to acquire Thai property | The Thaiger

PHUKET: Separating emotional excitement from the need to impartially assess the risks of an important investment when purchasing a dream home is not easy.

A real estate agent may have shown the purchaser glamorous photographs and conducted a personalized tour, so the desire to sign on the dotted line might impair the purchaser’s judgment.

The real estate industry in Thailand, including Phuket, is largely unregulated and it is therefore imperative that a purchaser consider the following steps and tips as a pre-requisite to achieving the dream.

The Developer: In an unregulated market, and, particularly when buying a property off-plan and therefore unseen, a prudent purchaser should do all they can to check a developer and his track-record.

When buying off-plan there is nothing to see beyond the glossy marketing information, and until construction is completed the purchaser is always under a degree of risk.

A new developer will by definition have no track-record so the purchaser must do all he can to talk to other purchasers and real estate agents. While it is inevitable that some risk must be accepted, let’s keep that risk to a manageable level.

As freehold title is not available to foreigners, aside from condominiums (the subject of last month’s article), any acquisition made in a foreigner’s personal capacity must be leasehold, so the developer/land owning company will be the purchaser’s landlord.

A prudent investor must therefore establish that the landlord seems likely to be able to uphold his long term obligations under a lease. If the economics justify it, procuring a letter of good standing from the Bank of Thailand or a company credit report might be well justified. A long term lease from a public listed company would be ideal, however an unlikely prospect.

Payment: Property construction generally requires payment by a schedule of installments, the frequency of which is determined by milestones in construction being met. The schedule needs to be carefully considered both in respect of the purchaser’s ongoing budget and in respect of the milestones themselves to ensure that the payments fairly reflect the value of the works completed at each stage and are not too front-loaded thus leaving insufficient funds to complete the structure.

The advice of an independent engineer or surveyor might prove invaluable.

Leap of Faith: The decision to purchase having been made, the next step is often (although not always) to make a reservation by executing a Reservation Form and paying a small percentage of the overall price as a proportion of the deposit. This is a show of commitment, which ties both parties to the process and triggers a defined time line within which it is expected that the contract terms will be settled.

Care must be taken, as the reservation fee ought to be refundable in certain circumstances, in case it is discovered that there is an irreconcilable defect in title.

A purchaser should be aware that for all payments into Thailand it is prudent to remit foreign currency. The on-shore rate is better than elsewhere.

Contracts: Having made a reservation, the parties will need to agree to the form of contracts, which might comprise a sale and purchase contract, a long-term lease, a construction contract, maybe a management contract, and the form of transfer of a building permit for villa ownership.

The contracts will all need to be carefully considered and adjusted according to the best interests of both parties. Competent developers will have all necessary base documents in place to ensure a smooth transmission for the purchaser and his lawyer to review.

Legal Advice: In Thailand the law does not guarantee clear title. All title and land issues should be investigated in the district where the property is located.

When choosing a lawyer, a local presence is beneficial. Quality legal services need not be expensive and it should be possible to agree to a fixed fee rather than employ a lawyer on an hourly rate basis. A reputable firm will have no hesitation to advise initially on a no-charge basis and discuss what is necessary to set the purchaser at ease.

Ownership: The review and negotiation of contracts must be done expeditiously and effectively in order to protect the investment.

Until the point of registration, which may be at some distant date depending on the payment terms, an effective contract is the purchaser’s only real security. A lease in Thailand can only be registered for a term of 30 years, and although that lease term may be renewed on two occasions, the landowner’s obligation to do so depends on the contract. The contract must therefore be written in a way that obliges the landowner to ensure any successor is similarly obliged to renew the lease and that the lease shall be binding upon and inure to the benefit of any succeeding party.

Equally the contract must provide that the purchaser has the right to pass on the lease to
another, who shall be similarly protected. Occasionally the landowner’s obligation to renew can be underscored by the purchaser obtaining a minority, but controlling interest, in the landowning entity.

Ownership of a lease through an off-shore company is also an option, enabling a property owning company to be sold with no taxable event occurring on-shore within Thailand.

Construction: During the construction phase, the purchaser should be regularly informed and updated, with construction milestones being achieved triggering payment installments. Factual accuracy might be checked by an engineer or surveyor as previously described. More on construction in next month’s article in the Phuket Gazette!

Warranties: Any property will suffer small defects after construction is completed and a good developer will promptly and efficiently remedy the same.

While condominium purchases carry a statutory one year warranty by law, the purchaser of a villa will have to rely on his contract. Typically the structure itself will be guaranteed for two years, with non-structural items (for example water pumps and appliances) guaranteed for one year, and individual warranties provided for swimming pools and those items with longer guarantees from the suppliers or manufacturers.

The law in Thailand does not provide protection against latent defects (those defects which might appear at some later stage but which are previously undetectable to the naked eye) so these need to be provided for within the construction contract.

General: When a project is completed (sometimes not until the inclusion of neighboring villas) and any mortgages on the land are redeemed, the developer will be ready to proceed to registration.

Registration at the land office is the purchaser’s principle security. Although the means of ownership differ within Asian countries, the process of purchase and registration is not so different.

In Thailand the use of nominee shareholders in land owning companies is illegal, so the purchase of leasehold interests is common and well tested. In Indonesia, by contrast, property may be owned directly by foreign companies, whereas in Thailand, land may only be owned by Thai nationals or properly constituted Thai companies, hence the practice of leasing. Other countries allow longer lease periods, and some countries allow foreign freehold purchases over a certain monetary value. The point is that, although Asian countries have different rules, any prudent purchaser must decide what is comfortable to them relative to the desired country.

In Thailand the real estate industry is still largely unregulated, although consumer protection is on the increase, particularly regarding condominiums, but the protection is not yet as sophisticated a

Find more property for sale and rent across Thailand at Thaiger Property, powered by FazWaz. You can even list your property for free.

Archiving articles from the Phuket Gazette circa 1998 - 2017. View the Phuket Gazette online archive and Digital Gazette PDF Prints.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *


Chinese move their purchase power away from Bangkok condo market

The Thaiger



Chinese move their purchase power away from Bangkok condo market | The Thaiger

Chinese condo buyers are veering their purchase power away from the Bangkok property market citing the strong Thai currency, overpricing and a supply glut.

  • 2015 – 5.8 Yuan to the Thai Baht
  • 2019 – 4.4 Yuan to the Thai Baht

Chinese move their purchase power away from Bangkok condo market | News by The Thaiger

The rise of the baht and the weakening of the Chinese Yuan over the past four years, have culminated in a 25% softening in Chinese investment power in the Thai property market (chart from

Property consultants say that Chinese buyers are now containing their investment risk by buying into the lower-end 2-6 million baht condo market instead of the 5-10 million baht condos they were previously purchasing.

At the same time the annual returns for Bangkok condominiums is reported to have dropped from 6-7% five years ago to only 3-4% in some locations in the current market.

Speaking to the Bangkok Post, Simon Lee, President of property brokerage Angel Real Estate Consultancy, says overall sales volume of Bangkok condos bought by Chinese buyers will shrink by half in 2019.

He also notes that the current Thai government crackdown on investors renting out condos on daily or weekly leases, has scared a lot of new investment into the sector away  as the ‘law’ appears to be applied in a haphazard manner.

The Chinese investors are also expressing disappointment when they buy into a development at one cost, only to find that locals pick up the balance of the stock at a lower price as the developers clears the stock.

Bangkok’s soaring land prices, which should see the value of condos rise, is being balanced out with the sheer glut of stock available, pushing down values. Rental returns are also being pushed down by the volume of stock available to the rental market.

SOURCE: Bangkok Post

Here’s another report about signs of weakness emerging in the Bangkok condo market from The Thaiger.

Continue Reading


Thai PM acts on illegal and unlicensed hotels and accommodation

The Thaiger



Thai PM acts on illegal and unlicensed hotels and accommodation | The Thaiger

Owners of shop-houses, rented properties, even entire floors of condos – running them as defacto hotels – are about to get the Article 44 treatment.

The PM, acting in his capacity as the head of the NCPO (in the days before it is dissolved), says he will bring an estimated 20,000 illegal hotels and accommodations around the country under control so they run under the same rules as licensed hotels and to boost safety for paying guests.

The order cited a number of safety rules, like properly installed and operating fire extinguishers, required under the Hotel Act but usually missing in unlicensed premises, posing safety concerns for people that stay at unlicensed hotels.

He said they’ve been flaunting loopholes and dodging proper town planning guidelines for the past decade, taking advantage of Thailand’s tourist boom but operating ‘under the radar’ and not paying the proper taxes or licensing their properties.

“Many people lease their buildings, houses or apartments in the same manner as hotels without permission or proper management.”

He’s gone further and asked hotel owners or citizens that know of illegally operated establishments to tell local officials so they can be closed down or given a chance to properly license the properties. Unlicensed or illegal premises will be given 90 days from last Wednesday when the order was announced in the Royal Gazette.

The order covered issues relating to land management and town planning restricting locations that hotels can be constructed or operated.

Thailand is flooded with illegal accommodation offerings such as rented shophouses being converted into rooms or sets of rooms or entire floors in new condos being sub-let to operate as defacto hotels – some even with full receptions to welcome guests. The hotel industry, suffering under increased competition from illegal operators, has been forced to lower room rates to unsustainable levels in recent years. Hotel associations have been lobbying the government for urgent action.

Continue Reading


Luxury condos change the face of Sathorn Road in Bangkok

The Thaiger & The Nation



Luxury condos change the face of Sathorn Road in Bangkok | The Thaiger

by Somluck Srimalee, The Nation

From Sathorn junction to Taksin Bridge, the riverside section of Sathorn Road has been transformed from a strip of shophouses to luxury residential condos in a gentrification that added 8,000 new apartments to the area. As well, the businesses have shifted to a more modern trade to replace the traditional trades.

With the market trend, listed and non-listed property firms are parading to launch their new condominium projects in Sathorn district, the central business district of Bangkok. Launches totalling more than 31 billion baht have been made from mid-2018 through the first half of this year, according to the recent Nation survey.

Supalai Icon Sathorn, worth 20 billion baht, is the latest project launched to market by Supalai. It is priced at 175,000 baht per square metre with a starting price of 8.2 million baht per unit.

Supalai’s CEO Prateep Tangmatitham said the mixed-use project would feature residential along with offices, shops and complete facilities on a 12,600 sqm plot, 56 floors high. The combined total of 780 residential will offer a functional area of approximately 150,000 sqm.

Meanwhile, other property firms are also launching their condo projects on Sathorn Road.

To find all the latest Bangkok condos for sale, and compare prices, go HERE.

For example, in the middle of last year Pruksa Real Estate introduced the Reserve Sathorn worth 2.59 billion baht – it has already sold out. The project offered a 280,000 baht per sqm starting price, or 13 million baht per unit. The project will be completed and transferred to customers in 2022.

Sathaporn Estate last September introduced its 1.3-billion baht Shade Sathorn condominium project at a 135,000 baht per sqm price, or 3.69 million baht per unit. The project is to be completed and transferred to its customers in 2021 or 2022.

The latest condo project is the 3.4 billion baht Anil Sathorn by Grand Unity Development. It goes for 260,000 baht per sqm, or a starting price of 11 million baht per unit.

From 2003 through 2018, a total of 8,002 condominium unite, valued at over 40 billion baht, were launched for sale on Sathorn Road. Up to 95% were successfully sold, according to research by property agency Colliers International Thailand.

Their research also found an average condominium price on Sathorn was at 250,000 baht per sqm.

Luxury condos change the face of Sathorn Road in Bangkok | News by The Thaiger

Most property firms that launched sales for over 40 billion baht worth of condos on Sathorn Road in 2018 through the first half of this year have successfully sold out, Colliers local research director Pattarachai Taweewong said.

For example, Reserve Sathorn launched mid-year and has managed to already sell out. Reflecting the demand, condominium prices also increased from the pre-booking 280,000- 300,000 baht per sqm.

Sansiri in 2017 launched the Line Sathorn worth 4 billion baht. The project combines 327 units at Bt270,000 per sqm and a starting price of 7.9 baht million. The project sold out within a day of opening up to booking. Those units now enjoy an average resale price of 285,000 baht per sqm.

Raimon Land last October introduced its 4.2 billion baht Tait 12 project on Sathorn Soi 12. At 264,000 baht per sqm, it offers a starting price 7.6 million baht per unit, and reached sales of 70% for the sales launched.

Sathorn Road is a prime location for residential property, says Pruksa Real Estate’s chief executive director of premium units. Prasert Taedullayasatit pointed to the locations many lifestyle-oriented facilities, including a hospital, university, primary school, secondary school and shopping centre.

The location also boasts both MRT and BTS transit lines, giving an added boost to demand for residential projects in the area. Meanwhile, the area’s limited availability of land for building residential drives up the price of land there, he said.

For 2018, land price around Sathorn Road were recorded at an average 2 million baht per square wah. Already, the price has jumped 10 per cent, while demand for residential in the location enjoys continuing strong growth, he said.

SOURCE: The Nation

Luxury condos change the face of Sathorn Road in Bangkok | News by The Thaiger

Continue Reading

The Thaiger Newsletter

Keep up with all the day’s news. Subscribe here.

The latest news and information from Thailand.

* indicates required
เลว! วินจยย.อุดมสุขยกพวกตีกัน ไม่กลัวตร. หนุ่มโดนลูกหลงกระสุนเจาะศีรษะดับหน้าบ้าน [คลิป] | The Thaiger
ข่าวกรุงเทพ2 weeks ago

เลว! วินจยย.อุดมสุขยกพวกตีกัน ไม่กลัวตร. หนุ่มโดนลูกหลงกระสุนเจาะศีรษะดับหน้าบ้าน [คลิป]

ชมไฮไลต์การแข่งขันไทย-สหรัฐ “ฟุตบอลโลกหญิง 2019” กลุ่ม F | The Thaiger
ฟุตบอล2 weeks ago

ชมไฮไลต์การแข่งขันไทย-สหรัฐ “ฟุตบอลโลกหญิง 2019” กลุ่ม F

10 มิ.ย. ถ่ายทอดสด “ฟุตบอลโลกหญิง 2019” ไทยพบสหรัฐ ตี 2 -PPTVHD ยิงตรงจากสนาม | The Thaiger
ฟุตบอล2 weeks ago

10 มิ.ย. ถ่ายทอดสด “ฟุตบอลโลกหญิง 2019” ไทยพบสหรัฐ ตี 2 -PPTVHD ยิงตรงจากสนาม

เริ่มแล้ว งาน”1 ปี อนาคตใหม่ เดินไปด้วยกัน” ณ หอประชุมใหญ่ ธรรมศาสตร์ท่าพระจันทร์ | The Thaiger
ข่าวการเมือง3 weeks ago

เริ่มแล้ว งาน”1 ปี อนาคตใหม่ เดินไปด้วยกัน” ณ หอประชุมใหญ่ ธรรมศาสตร์ท่าพระจันทร์

ดูย้อนหลังวอลเลย์บอลไทย-ตุรกี “เนชั่นส์ ลีก 2019” นัดที่ 9 | The Thaiger
วอลเลย์บอล3 weeks ago

ดูย้อนหลังวอลเลย์บอลไทย-ตุรกี “เนชั่นส์ ลีก 2019” นัดที่ 9

ระเบิดความมันส์ 6 มิ.ย. ไทย-ตุรกี “วอลเลย์บอล เนชั่นส์ ลีก 2019” -ลิงก์ถ่ายทอดสด | The Thaiger
วอลเลย์บอล3 weeks ago

ระเบิดความมันส์ 6 มิ.ย. ไทย-ตุรกี “วอลเลย์บอล เนชั่นส์ ลีก 2019” -ลิงก์ถ่ายทอดสด

ดูย้อนหลังแมทช์ 5 ดาว วอลเลย์บอลไทย-โดมินิกัน “เนชั่นส์ ลีก 2019” นัดที่ 8 | The Thaiger
วอลเลย์บอล3 weeks ago

ดูย้อนหลังแมทช์ 5 ดาว วอลเลย์บอลไทย-โดมินิกัน “เนชั่นส์ ลีก 2019” นัดที่ 8

5 มิ.ย. ชมถ่ายทอดสดประชุมสภาผู้แทนราษฎรครั้งที่3 โหวตเลือกนายกรัฐมนตรี | The Thaiger
เลือกตั้ง 623 weeks ago

5 มิ.ย. ชมถ่ายทอดสดประชุมสภาผู้แทนราษฎรครั้งที่3 โหวตเลือกนายกรัฐมนตรี

[LIVE] “ธนาธร จึงรุ่งเรืองกิจ” แสดงวิสัยทัศน์บริหารประเทศนอกรัฐสภา : เลือกตั้งนายก 2562 | The Thaiger
เลือกตั้ง 623 weeks ago

[LIVE] “ธนาธร จึงรุ่งเรืองกิจ” แสดงวิสัยทัศน์บริหารประเทศนอกรัฐสภา : เลือกตั้งนายก 2562

11 โมง ชมถ่ายทอดสดประชุมรัฐสภา โหวตเลือกนายกรัฐมนตรี คนที่ 30 | The Thaiger
เลือกตั้ง 623 weeks ago

11 โมง ชมถ่ายทอดสดประชุมรัฐสภา โหวตเลือกนายกรัฐมนตรี คนที่ 30

เชียร์สด 4 มิ.ย. ไทย-บัลแกเรีย “วอลเลย์บอล เนชั่นส์ ลีก” 6 โมงเย็น-ลิงก์ถ่ายทอดสด | The Thaiger
วอลเลย์บอล3 weeks ago

เชียร์สด 4 มิ.ย. ไทย-บัลแกเรีย “วอลเลย์บอล เนชั่นส์ ลีก” 6 โมงเย็น-ลิงก์ถ่ายทอดสด

เพราะมาก “แก้ม วิชญาณี” เจ้าหญิงจัสมิน โคฟเพลง “Speechless” | The Thaiger
เพลงสากล3 weeks ago

เพราะมาก “แก้ม วิชญาณี” เจ้าหญิงจัสมิน โคฟเพลง “Speechless”

[คลิป]ชาวเน็ตโวย UNHCR ตั้ง”นก สินจัย” พรีเซนต์ช่วยผู้ลี้ภัย “ปวิน” คอมเมนต์เจ็บ | The Thaiger
ข่าวการเมือง3 weeks ago

[คลิป]ชาวเน็ตโวย UNHCR ตั้ง”นก สินจัย” พรีเซนต์ช่วยผู้ลี้ภัย “ปวิน” คอมเมนต์เจ็บ

[Live]ชมสด 21:30 ขบวนแห่ลิเวอร์พูล ถ้วยยูฟ่า แชมเปียนส์ ลีก 2019 | The Thaiger
ฟุตบอล3 weeks ago

[Live]ชมสด 21:30 ขบวนแห่ลิเวอร์พูล ถ้วยยูฟ่า แชมเปียนส์ ลีก 2019

ชมย้อนหลัง ลิเวอร์พูลชัยชนะเหนือสเปอร์ส คว้าแชมป์ยูฟ่าสมัยที่ 6 | The Thaiger
ฟุตบอล4 weeks ago

ชมย้อนหลัง ลิเวอร์พูลชัยชนะเหนือสเปอร์ส คว้าแชมป์ยูฟ่าสมัยที่ 6