Connect with us

Hua Hin

Top Five things to consider if you’re buying a condo

Tanutam Thawan

Published

on

Top Five things to consider if you’re buying a condo | The Thaiger

Not quite a Top Ten but some good straight-talking about buying condominiums in Thailand from Desmond Hughes from FazWaz News…

One of the most commonly read or spoken summary of foreign ownership of property in Thailand is along the lines of

“Foreigners can buy a foreign freehold condominium in their name”.

At this sentence, many foreign investors switch off, and assume that the rest of the detail provided by the author may be legal mumbo jumbo or a thinly veiled attempt to win their business.

In fact, there is quite a lot you should know about Thai condominiums, before you start property hunting. As my clients don’t generally spend their time reading legal journals and legislation unless they have to, I have set out a mixture of legal and practical matters below without much distinction:

1. Only 49% of the Registrable Area of a condominium can be sold to foreigners.

In Bangkok, this is not likely to have any impact on you. Most of the buyers and owners of condominiums in Bangkok are Thai nationals. Even in condominiums popular with foreigners, it is an uncommon phenomena that foreigners would ever outnumber Thais as owners in a building. You might ask why the rule even exists, but there is a fear and protectionism in many Asian countries, not just Thailand, to try and keep foreigners ‘controlled’ through numbers and perecentages.

In other places – Phuket; Pattaya; Koh Samui; Chiang Mai and Hua Hin particularly you should apply caution to ensuring that the correct ‘quota’ of foreign units is available to be sold to you on a freehold basis.

2. Banks often advertise they will give finance, even potentially to foreigners, but in the end – don’t

I speak from personal experience and from that of my clients. For my first condo investment in Bangkok, I had to take out a loan with HSBC which was then taken over by a Thai bank. My loan had to be in foreign currency, because in order to buy a foreign freehold condominium – you have to send foreign currency into Thailand from overseas to generate ‘foreign exchange transaction forms’ to register the title to a foreigner at the land office. This means a lot of hoops for a bank to jump through simply to provide a mortgage. Foreigners are also viewed as flight risks by Thai banks and they do not wish to spend their time chasing foreign assets. This all means that a very high percentage of the foreign buyer market is cash based, which is good for the stability of that part of the condo market.

If you are tempted to try and take out finance applications to banks, be aware that the banks are looking for you to have some business in Thailand; perhaps to be married to a Thai national who preferable from the bank’s perspective will have some degree of wealth for self-support; and that you have other assets in Thailand with a history of using and paying off credit such as credit cards.

3. There is an oversupply of condominiums in Bangkok at the moment and rental yields are traditionally low in terms of % compared to more expensive Asian neighbors – Hong Kong and Singapore, and further afield

A condo in a prime rentable area at a high investment price can remain rentable due to its extremely useful location and amenities. If such condo has a 24 hour supermarket in the basement of the retail area and dozens of restaurants, as a condo building I am thinking of does have such amenities, then it will remain rentable for some time if the property is maintained. However, another condo at the end of the same ‘Soi’ and post building and delivery could remain unrented after many months and even if the rent is cut to 50% of the market price. Don’t just take my word for the state of the market for condo rentals in Bangkok, ask the agents.

In addition to this, the authorities are taking a closer eye at tax declarations and ‘cracking down’ on undeclared taxes – not just personal income tax, but the ‘business tax’ of 12.5% for renting units out. This all adds to the costs of investing and renting in a condo, and you must calculate this into your budget and forecasts to avoid living in fantasy land about dream returns.

3. You won’t have any say in how the condominium is managed

Unless you buy up over half of the voting rights attached to units in the entire building, you will be a minority voice on issues like the raising of the common area fees; use of the ‘sinking fund’ – the fund to make capital repairs, changes to the rules and regulations and general maintenance decisions, even of some significance. Don’t imagine standing up at an co-owners meeting voicing your opinions and somehow making headway in ‘changing’ the direction of the management of a building. The way in which a building is managed boils down to how the developer has structured ownership, whether the developer retains many units and a large % of the voting rights or not, and whether the developer plans to self-manage or outsource management of the asset to a reputable or not-so-reputable management company.

If you don’t check the management plan then I can reference lots of analogous situations where you would take more care – if you buy a car, you should think if there are any decent repair centres nearby and at a reasonable price – Ferraris in Phuket aren’t currently easy to maintain, I would imagine, as a non-Ferrari owner and observer of the state and condition of the roads in that Province. You also wouldn’t, I hope, buy a smart phone without knowing you could have the phone service, fixed and various parts replaced on reasonably short notice. As a property is a far higher value of investment, a lot of investigation into the management plan is necessary.

4. Don’t Believe the Hype – It’s a Sequel

False Media, we don’t need it do we? If you see a glossy marketing brochure and are told that the developer ‘has to deliver on its promises by law’ – be wary. To take one example, I bought a condo under which a ‘private wine cellar area with personal secure wine bottle storage space’ would be provided to every buyer. Amazingly, without any shame at all, the famous developer constructed an unchilled cheap wooden cabinet with glass doors, no locks next to 4 sofa chairs in the open space corridor between a swimming pool and the gym. If you wanted to fry an egg on the ‘wine cabinet’ then that was highly likely to have been possible.

These kind of things are not all ‘horror stories’ – I actually got a decent condo notwithstanding the missing items. However, you will often have to compromise when in more highly regulated and supervised jurisdictions, you would not. Compromise is a very common work in Thai society and it applies to business and consumer purchases too.

5. Set up your ownership for easy re-sale

If you are buying a condo as a ‘foreigner’ and paying cash, then you can buy your condo through a foreign company, and sell the company later. This is only worth doing if the cost of setting up and maintaining the foreign company is reasonable and the company you set up is ‘saleable’ and attractive to others. You should not carry out this kind of structuring to ‘avoid tax’. However, you can set up this kind of structure, pay tax on the purchase, and subsequently deal with your company as you see fit, provided a buyer is willing to buy it. If such a company receives rental income, then even if it is foreign it is till liable to taxes as the use of the ‘immoveable property’ for generating revenue isn’t deemed to be ‘outside’ of Thailand, and that applies even if the company tries to contract for and receive the rent outside of Thailand.

Top Five things to consider if you're buying a condo | News by The Thaiger

Desmond Hughes has operated and owned 2 law firms in Asia in 14 years spanning Thailand; Vietnam; Indonesia with clients in all of Asia and other markets investing inwards into the region with his existing firm Hughes Krupica possessing a large market shares in its fields of expertise. Desmond’s professional expertise comprises real estate from the most complex mixed use development structuring through to assisting with private property transactions. Desmond also assists investors in relation to hotel disposals and acquisitions and restructuring. Desmond keeps his market knowledge fresh by presenting at seminars; participating in real estate industry events; writing prolifically for different printed and online publications and by meeting and networking amongst his client base.


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

Local Thai journalist speaking fluent Thai and English. Tanutam studied in Khon Kaen before attending Bangkok’s Chulalongkhorn University.

Continue Reading
1 Comment

1 Comment

  1. foot

    September 29, 2017 at 1:14 pm

    The bottom line is don’t buy a condo. While there are some that have worked out, the huge percentage of buyers lose everything they spent.
    The author also fails to mention how many times the Thai who holds the 51% changes the locks and throws farang out. Usually the wife, girlfriend, or “trusted” Thai associate.

    BTW, all of these warnings also apply to any timeshare, regardless of what country it’s purchased in.

You must be logged in to post a comment Login

Leave a Reply

Hua Hin

Leatherback turtles face extinction

The Thaiger & The Nation

Published

on

Leatherback turtles face extinction | The Thaiger

by Pratch Rujivanarom

It may be too late to save leatherback turtles from extinction in Thailand’s seas, as a legal deadlock prevents a conservation status upgrade to protect this critically endangered turtle species and three other rare marine animals.

Wildlife conservationists are warning that the slow pace of stepping up the conservation of the leatherback turtle, whale shark, Bryde’s whale and Omura’s whale to preserved status would eventually cause the inevitable extinction of leatherback turtles in Thailand. They were speaking at a public seminar by the Sarakadee Magazine and Seub Nakhasathien Foundation yesterday.

The director of the Phuket Marine Biological Centre, Kongkiat Kittiwattanawong, said of the four endangered species, the fate of the leatherback turtles was now of most concern, as there had been no reports of finding new nests of the rare sea turtle species in Thailand since 2013 and its extinction in the wild was predicted to occur within the next few years.

Kongkiat said that the leatherback turtle was a protected wildlife species under the Wild Animal Reservation and Protection Act, which protected it from poaching and being in private possession, unless legally registered with the appropriate permission from the responsible agencies.

However, he said protected status was not enough to raise public awareness about preserving this critically endangered species of sea turtle and to prevent them becoming extinct from Thailand.

“Despite there not being much difference in conservation measures between protected wildlife and preserved wildlife, the public perception between these two categories is totally different, as people tend to give more concern to animals in the preserved wildlife list, because that is the status for nearly extinct animals,” he said.

He called for the conservation status of this turtle species to be stepped up urgently, bearing in mind its current precarious status in the wild, the fact there had been no new leatherback turtles’ nest found for more than four years and the increasing threat to their survival from dangers such as marine plastic waste.

“The categorising of Thailand’s wildlife conservation status of protected animals and preserved animals complies with the IUCN (International Union for Conservation of Nature) Red List, as species listed as vulnerable are eligible to be listed as protected animals, while the animals with the IUCN status of endangered or higher can be included in preserved wildlife list,” Kongkiat added.

“The leatherback turtle is now listed as critically endangered by the IUCN and in Thailand its population is now less than one per cent of what it was six decades ago, while its nesting report ratio has also dropped from three nests per year 20 years ago to only 1.5 nests per year this decade.”

Earlier this month the nomination of four endangered marine animals to be included in the preserved wildlife list was turned down after the Council of State highlighted a legal deadlock in the Wild Animal Reservation and Protection Act.

This might result in rights violations of the private owners of leatherback turtle carcasses, if these four rare marine animals are successfully registered as preserved animals.

This is because every case of private possession of living preserved animals or their carcasses is illegal, while according to Fisheries Department, there were at least 12 registered private collectors of leatherback turtle carcasses.

Leatherback turtles face extinction | News by The Thaiger

STORY: The Nation

Continue Reading

Hua Hin

Saturday night suicide linked to Hua Hin murder

The Thaiger & The Nation

Published

on

Saturday night suicide linked to Hua Hin murder | The Thaiger

by Wimon Thabkhong and Apichat Hongsakul

A 26 year old man, thought to have to committed suicide, is the main suspect in the murder of a 39 year old Bangkok woman in Hua Hin, according to local police.

Read the original story of the crimes HERE.

The Thai man, who allegedly committed suicide by letting a train run over him on Saturday night in Prachuap Khiri Khan’s Cha-am district, has been identified as the main suspect in the murder of a 39 year old Bangkok woman whose body, with multiple stab wounds in the neck, was found stuffed in a large plastic box in a house in Hua Hin district yesterday morning (Sunday).

The provincial police chief says the man, identified later as 26 year old Dithawat Dros, was linked to the murder case as he was the tenant of the rented house where the woman’s body was found.

Police suspect that he might have killed the woman in anger and committed suicide to avoid punishment, police said. They are not aware of the motives for the murder at this stage.

Investigations continue into the alleged suicide and murder.

Saturday night suicide linked to Hua Hin murder | News by The Thaiger Saturday night suicide linked to Hua Hin murder | News by The Thaiger

SOURCE: The Nation

Continue Reading

Hua Hin

Murdered Bangkok woman found in Hua Hin

The Thaiger & The Nation

Published

on

Murdered Bangkok woman found in Hua Hin | The Thaiger
by Wimon Thabkhong and Apichat Hongsakul

The body of a 39 year old Bangkok woman, with multiple stab wounds in the neck, has been discovered stuffed in a large plastic box in the toilet of a rented house in Hua Hin district, Prachuap Khiri Khan province today (Sunday).

The woman, who doctors estimate has been dead for three days before the body was found, was later identified as Suchapat Hiranpanthachote.

A Hua Hin hotel had contacted police about a female guest who had left all her belongings in her room without checking out of the hotel as scheduled on October 9.

Suchapat’s younger brother, who along with relatives came to Hua Hin to look for the missing woman after being unable to contact her, told police that the victim had left her home for Hua Hin on October 8, corroborating the hotel’s information that she had checked in that night alone.

She reportedly left in her black car the next morning and never returned to the hotel. The brother joined police to check the rented house in question to look for her.

They encountered strong smell coming from the locked house, where the woman’s black sedan was found parked. Her body and a bloodstained knife was found in the toilet.

A neighbour told police that the house was for rent and previously two men and a woman stayed there but in recent times there was only one man who stayed there. She said she had heard loud noises from that house three days ago but didn’t suspect any wrongdoing. But she says she was later puzzled to see the male tenant leaving the house by jumping over the fence and riding away on a motorcycle.

She said she had smelt the bad odors from the house next door but never thought it was from a murder.

Murdered Bangkok woman found in Hua Hin | News by The Thaiger

SOURCE: The Nation

Continue Reading
Pattaya Weather
October 17, 2018, 9:37 pm
29.0
°C
70
%
4
km/h
0.0
mm
20
%
33

The Thaiger Newsletter

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

The latest news and information from Thailand.

* indicates required



Trending