Buyer's Guide

Overview Land Title Deeds Taxes & Fees

If you are considering buying property in Phuket, the first thing you should know is that under Thai law, foreigners are not allowed to own land. However, foreign nationals do have the right to the ownership of buildings distinct from the land such as condominiums. Foreign nationals may own:

    A unit in a registered Condominium.
    A building distinct from its land.
    A registered leasehold of up to 30 years for all types of titled land or buildings.

Foreign nationals may not own:

    Freehold land.
    More than 49% of the shares in a Thai company that owns freehold land.

Important Notice!

Before purchasing property in Thailand make sure you have a good lawyer. See some of our recommended lawyer firms below.

Purchasing a Condominium

Under the Condominium Act (1979) foreigners can own the freehold of 49% of the total unit space in any legally registered condominium building. The purchaser must request a letter of guarantee from the condominium juristic person setting out the proportion of foreign ownership which must be submitted to the Land Department upon transfer of ownership.
Foreign Exchange Transaction Form

A foreign purchaser must bring in 100% of the funds from overseas in foreign currency and will need a Foreign Exchange Transaction Form (FETF) from the Thai bank in order to provide evidence of this to the Land Department. Due to strict money laundering regulations, a FETF is also necessary to avoid complications and remittance tax when repatriating funds should the foreigner sell the condominium at a later date.
Important Notice!

You can only obtain a FETF for any inward remittance for amounts not less than the equivalent of USD 20,000. You should clearly indicate the payment purpose on the payment order form in the field for a message for the beneficiary, including the name of the condominium and the unit number.
Owning Land

The two most popular ways for foreigners to purchase land are:
Long-Term Leaseholds

Registered leaseholds are secure and relatively straightforward. Long term leasehold can be structured to be tantamount to freehold ownership. Typically, the land is leased for a period of 30 years, renewable a further two times giving a total of 90 years. Security of the possession of land is assured by the fact that you are the legal owner of the buildings which occupy the land. Therefore, the lessor cannot take possession of the property upon expiration of the lease as the property is separated from the land and will not be a component part under the Civil Law.
Limited Liability Company

If you are not comfortable with the leasehold method, the alternative is to set up a Thai company that you control, and which can legally purchase land. Put simply, as a foreigner you are allowed to own 49% of the shares in a Thai company. The rest of the shares must be held by Thai juristic persons (which your lawyer can arrange), who will sign over control of their shares to you. The land will be owned by the company. However, as managing director of the company, you control the voting of the other shares, and therefore you have control over the ownership of the land.
Important Notice!

Recently the Thai government announced that it will begin investigating the source of the money used by the Thai shareholders who own 51% of the shares in the company to determine if they are nominees. The use of nominee Thai shareholders is prohibited under the Foreign Business Act (1999).
Thai Women married to Foreigners

Prior to 1998, any Thai woman who married a foreigner would lose her right to purchase land in Thailand. She could, however, still retain land that she owned prior to marrying the foreigner. However, the recent (1999) Ministerial regulation now allows Thai women married to foreigners the right to purchase land, but the Thai spouse must prove that the money used in the purchase of freehold land is legally solely theirs with no foreign claim to it. This is usually achieved by the foreign spouse signing a declaration stating that the funds used for the purchase of property belonged to the Thai spouse prior to the marriage and are beyond his claim.
Law Firms

Having a good lawyer can make all the difference. The following is a list of law firms in Phuket:

    Belmont Limcharoen
    Siam International Legal Group
    Tilleke & Gibbins
    International Law Office
    Mcevily & Collins Solictors
    PK International Law Office

Title deed

As a buyer you need to be aware of the various land title deeds which exist to understand what you are being offered. A large percentage of the land in Phuket is not titled or even accurately surveyed. Actually, it is because there is a lack of complete surveys that comprehensive titling does not exist.

As a foreigner buying land in Thailand, you should only consider land that comes with a Chanote, Nor Sor 3 or Nor Sor 3 Gor. These can be sold, leased and used as mortgage collateral and are the only titles over which registerable right of ownership or lease can exist. "More importantly, you cannot apply for or obtain approval to build on such land without one of the aforementioned titles. In any event, make sure you have a good lawyer look over the paperwork before you commit to anything.
Chanote

True land title deeds are officially called Nor Sor 4 Jor or more commonly Chanote. This is a certificate for the ownership of land and can be used as evidence confirming the right to government authorities. It is issued by the Phuket Provincial Land Office using GPS to accurately plot and survey the boundaries of the land. This is the most secure type of land title but land with a chanote can often be hard to find.
Nor Sor 3

The Nor Sor 3 is a document certifying the use of land issued and maintained by the District Land Office to the proprietor of the land but is not a possessory title. That is to say the person holding the Nor Sor 3 has the legal right to possess the land in question and can use it as a legal document. Nor Sor 3 is a floating map with no parcel points issued for a specific plot of land and not connected to other land plots, but its boundaries are recorded according to its neighbouring plots. Therefore, it may cause some problems in verifying boundaries due to lack of accurate surveys. Any change in ownership of the land must be publicised for 30 days before it can be registered.
Nor Sor 3 Gor

The Nor Sor 3 Gor has the same legal basis as the Nor Sor 3, with the difference being that in general Nor Sor 3 Gor has parcel points on the map of the land area set by using an aerial survey with a scale of 1:5000. It is a more accurately surveyed title as each plot is crossed referenced to a master survey of the land area and a corresponding aerial photograph. Therefore, it is possible to verify the boundaries of the land. However, it is still less accurately surveyed compared to a Chanote.
Sor Kor 1

Sor Kor 1 is a notification form of possessed land, which shows and maintains the existing rights to the particular land. On December 1st 1954, the government advised all land proprietors to notify their possession of land to the government using a 'Sor Kor 1' form. After it was proven that such a proprietor had possessed and used the benefit of the land legally, the government would then issue 'Nor Sor 3' or 'Nor Sor 3 Gor' as an evidence, which are legal certificates stating the owner's name that they have the right to such land according to the principle land administration law. This right will be protected by the law and can be used as evidence in any dispute with a private individual or the government.
Condominium Title

A condominium title is a title to a part of a building or buildings with multiple owners, a fractional interest in the land, other common assets (such as a swimming pool) and common parts of the building (such as the stairwell or lobby). The title will state the floor area of the private apartment, the ground area of the common land and the percentage interest, in which that apartment has in the common property. This percentage also represents the voting interest in the condominium company or owners association.
Building Transfers

Buildings other than condominiums do not have any form of title document, but their sale or long lease can be registered at the District Land Office. Proof of ownership must be established either from proof of construction or a document showing sale and purchase. Do not confuse this with the House License document, which is only a registration of the house occupants. Transfer of a building, as distinct from its land, requires the posting of 30 days public notice, to see if anyone wishes to contest the ownership. Foreigners may own a building distinct from its land and register such transfer of ownership into their names at the Local District Office or Amphoe.
Tax

Whenever a property in Thailand is purchased or sold there are four potential taxes/fees to be paid. There is a stamp fee of 0.5%, a transfer fee of 0.01%, a business tax of 0.1% (levied against an owner who has been in registered possession of the property less than 5 years), and income tax (similar to capital gains tax) at a variable rate. It should be decided beforehand, as part of the bargaining process, whether the buyer or seller will be responsible for paying transfer fees and taxes.

Which of these taxes/fees will be applicable depends on the details of the transaction, the vendor and the duration of the vendor's ownership. It is also significant to note that most of the fees are calculated relative to the governments "tax assessment value" of the property and this value is well below the market value.
Taxes on Condominium Purchases

    2% transfer fee of the registered value of the property price
    0.5% stamp duty of the registered value (only payable if exempt from Business Tax)
    1% of the registered value or appraised value (whichever is higher) of the property price in the case the seller is a limited company. In the case the seller is a natural person, the tax shall be calculated on progressive rate of the registered value
    3.3% Business tax of the registered value or appraised value (whichever is higher) of the property price. Business tax is only payable if the property is sold within 5 years of the purchase registration date.

Tax involved in purchasing property

In addition to the purchase price of the property the following fees apply: * Lawyers fees * Cost of setting up a Thai Company * Leasehold title fees - leasehold registration fees and stamp duty (currently 1.1% of the land rental or lease premium) is payable to the Land Department upon registration of the lease. * Freehold title fees - Freehold registration fees (currently 2.0% of the appraisal price of the property) is payable to the Land Department upon transfer and registration of the title of the property. * Freehold title taxes - Corporate Income Tax (currently 1.0%) and Specific Business Tax (currently 0.5%)
Property Taxes

Once you have acquired the property, there are 2 different types of tax levied on property in Thailand that you need to be aware of:
Land Tax

This is an annual tax levied on land ownership equivalent to just a few Baht per rai. The amount is often so miniscule that in practice the body charged to collect it, rarely bothers to do so. When they do collect it, its usually after several years when the amount has accumulated.
Structures Usage Tax

This only applies to properties used for commercial purposes. This is applicable at the rate of 12.5% on the actual or assessed gross rental value of the property. However, this notional value is well below the commercial market rental value.
Notes

If the house is purchased through a company, you need to consider that corporate tax is higher than personal tax, and the cost of setting up the company has to be considered as part of the initial investment, even if this is relatively modest.
Capital Gains Tax when sell property
the 30% corporate income tax calculated on gain from selling, 1% withholding tax and 3.3% specific business tax on the selling price or appraisal price announced by the Land Department which ever is higher.
Funds Transfer Advice

If you wish to purchase property in Thailand using Thai Baht, ensure that your funds are transferred to Thailand in foreign currency and converted to Thai Baht here. The receiving bank will issue a Foreign Exchange Transaction Form confirming the transaction for individual inward transfers exceeding 20,000 US$, which is one of the documents you may need in the future if you wish to repatriate funds without incurring tax penalties.

Repatriation of investment funds and repayment of overseas borrowing in foreign currency can be remitted freely upon submission of supporting evidence. One of these documents would be the Foreign Exchange Transaction Form mentioned above, or in respect of a foreign currency loan and the loan contract. Remittance of funds without proper documentation could be regarded as income and become liable for tax.
Foreigner Visa for Thailand

There are four basic types of visas available for visitors and residents to Thailand.

Transit visa - valid for 14 days will be issued to those people arriving in Thailand without a visa. Technically you must have an onward flight ticket, but in practice this visa will be issued almost without question. Note: There are a few countries (not many) that do not require visas and will get a three month entry stamp on arrival - in general these countries are the ones that grant the same rights to Thai nationals visiting their countries.

Tourist visa - issued by Thai embassy abroad - these visas will be valid for 60 or 90 days (varies from country to country). Of note is that you may apply for more than one Tourist visa at a time and these multiple visas may be used up consecutively. Many quasi resident visitors to Phuket (who do not work - or want to avoid the red tape of a Non Immigrant visa) live for years on a tourist visa (and go shopping in Singapore or Penang every three months). So long as you are solvent and not engaging in any local business activity, there is nothing wrong with this approach.

Non Immigrant visa - issued at an embassy outside Thailand and valid for a 90 day stay, this visa may be extended within Thailand for periods up to one year at a time. There are three basic grounds to obtain and renew a Non Immigrant visa. 1) that you are employed (and have a work permit) in Thailand. 2) That you have Thai family. 3) That you are retired and can prove adequate pension or other financial means to support yourself. Ownership (or long lease) of property has no bearing on the extension of a Non-Immigrant visa. Lengthy form filling and copying of personal documents (in duplicate) are required both when you first apply and for every subsequent renewal of this visa. If you hold a Non Immigrant visa, you should obtain a Re-Entry permit if leaving the country if you do not wish your visa to lapse.

Resident visa - rarely issued and hard to obtain. These visas are issued on a very selective quota basis. Qualification requirements include reading and writing Thai, a fairly strong local financial status and some good (influential) Thai references.