Buying a condominium in Thailand
The FAQ in this page only concern registered condominiums
What is a condominium in Thailand
The Thailand Condominium Act defines a condominium as a building that can be separated into units for individual ownership and which include personal and common properties (land on which the building sits, hallways, elevators, etc.).
The Condominium Act does not specify in any detail the specific requirements necessary in order for it to be identified as a condominium. As long as the building is able to hold ownership separately according to the area, whereby each area consists of private ownership in the property and joint ownership in the common property. There are currently no specifications outlining height or space requirements, nor are there any specifications outlining the minimum amount of individual units necessary within the building.
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- Are all apartment buildings regulated by the Condominium Act
- How are condominiums regulated
- Can a condo building be 100% foreign owned
- Can any foreign national own a condo in Thailand
- Can a Thai company own a condo on behalf of a foreigner
- Can a foreign company own a condo
- What is a FET form
- I do not have a FET form
- Can I rent out my unit
- When I sell my condo, do I have to pay tax
- What are the ownership transfer taxes
- What is a title deed
- Is foreign ownership inheritable
- What is a house book
- Buying a condo pre-construction
- Buying a condo leasehold
- Sale and purchase agreement
- Saleable floor area
- Common mistakes
- Condominium manager and joint owners condo meetings
Are all apartment buildings regulated by the Condominium Act
No, there are 2 types of residential apartment buildings in Thailand, the ones registered under the Condominium Act and the ones not registered under the Condominium Act. Only registered condos (with a government issued unit ownership title deed) are regulated by the Condominium Act. Legally, registered and unregistered condos cannot be compared and when it comes to buying or even long term renting such apartments a completely different set of rules apply.
How are condominiums regulated
Condominiums are regulated by:
- its rules and regulations (internal), and
- the Thailand Condominium Act (external).
Can a condominium building be 100% foreign owned
Between April 1999 and April 2004, as a temporary measure and an attempt to reduce the surplus number of condominiums, foreigners could under certain restrictions and in specified areas own up to 100 % of the aggregate unit space. This has since been amended back and foreigners can currently own up to 49% of the aggregate unit space in a condominium building.
Can every foreign national own a condominium in Thailand
There are no restrictions on nationality and every foreigner who can enter Thailand legally can own a condominium, but they must personally qualify for ownership under section 19 of the Condominium Act. Generally this means that the purchase price for the condo must have been transferred into Thailand as foreign currency and exchanged into Thai baht by a licensed financial institution inside Thailand.
Can a Thai company own the condominium on my behalf
Since the initial 2006 land office regulations preventing the use of nominee shareholders and a serie of new regulations this practice in less common. A company set up to circumvent foreign ownership restrictions and dormant holding companies are not allowed under Thai law. Even though generally considered illegal this structure is often still pushed to sell the remaining units in the Thai side of a tourist resort condominium project to foreigners read more...
Can a foreign company own a condominium
Foreign juristic entities (e.g. a BVI company) can register ownership within the 49% foreign ownership quota of a condominium just as any natural foreign person. A minutes of meeting is required approving the purchase, company documents of incorporation must be prepared, notarized, translated and submitted with the land office (all or specific company documents, depending on the local land office requirements), together with documents such as a foreign exchange transaction form as when a foreign individual is buying a condo in Thailand.
What is a FET form
FET form means Foreign Exchange Transaction form, previously known (and for some still) as Thor Tor 3 (Thor Tor Saam). An authorized financial institution (bank) inside Thailand dealing with the exchange of foreign currency exceeding 50,000 USD or an equivalent in other currency must prepare a FET-form and report this transaction to the Bank of Thailand. For foreigners buying a condominium this is part of the documents required for registration of ownership at the Land Department (compliance with section 19 of the Condominium Act) read more...
I do not have a fet form
For the exchange of foreign currency in amounts less than 50,000 USD the bank does not prepare a FET form. In this case foreigners can request from the bank a confirmation letter for the transfer of foreign currency and exchange into Thai baht. This letter must contain the same information as the FET form (e.g the transferred amount in foreign currency, the exchanged amount in Thai Baht, the name of money sender, the name of money receiver, the purpose of transferring the money) and can be used as proof of compliance with section 19 of the Condominium Act.
Can I rent out my condo unit and paying taxes
Unless restricted in the bylaws of the condominium (the adopted rules and regulations) a foreigner is free to rent out his unit. Only if is considered operating a business of renting out properties in Thailand the foreign owner would be restricted by the Foreign Business Act and Foreign Employment Act. The received rent is subject to personal income tax and over properties not used as a private residence of the owner 'housing and land tax' must be paid read more...
When I sell my condo do I have to pay taxes
When you sell your condo taxes must be and are paid at the land office at the time of transfer. This includes personal income withholding tax. With the land office tax-receipt, sale documents and documents confirming the previous transfer of foreign currency into Thailand, the bank is allowed to transfer the full amount received from the sale of a condominium by a foreigner out of Thailand read more...
What are the transfer taxes
There are a variety of taxes and fees involved when transferring a condominium unit in Thailand; transfer fee, stamp duty, withholding tax (personal or corporate) and specific business tax (if applicable). How these costs are split between buyer and seller in a re-sale depends on what is agreed and can vary from buyer pays all to seller pays all. When buying in a condominium development the seller (developer) can under consumer protection laws only pass on up to half of the 2% ownership transfer fee to the buyer read more...
What is a title deed
Each apartment unit in a condominium building has an ownership title deed issued by the Land Department. The title deed contains among others the following information:
- position and location of the land and area of the land of the condominium.
- position and location, area and plan of the apartment showing the width, length and height.
- ratio of ownership of common property (ratio of voting rights)
- name and surname of the person having the ownership of the apartment.
- index for the registration of rights and juristic acts.
- signature of the Competent Official.
- position seal of the Competent Official.
Transfer of ownership of a condominium and amendment on the title deed always takes place at the land department read more...
Can ownership of a condo be passed on to my children
Any foreigner who receives a condo in Thailand by inheritance or through a gift must separately and individually qualify for ownership under section 19 of the Condominium Act, or he must (section 19 under 7) sell the unit within one year of acquisition by inheritance. Ownership can be passed on to foreign heirs, but generally they cannot register ownership and must dispose of the appartment within 1 year read more...
What is a house book
A house book or blue book or Ta Bien Baan is a residential address registration book issued by the local government municipality. It identifies the exact location of the condominium and apartment address. The house book could state who the owner is and persons living in it, but this is not required and legally not or less relevant for foreigners as it is just an address registration document, not an ownership document read more...
Buying a condo pre-construction
When buying a condo off-plan escrow arrangement offers both the seller as the buyer protection. In a pre-construction condominium development in Thailand developers usually require that during the construction payments are made directly into the developer's bank-account and not into a third party escrow account. Payments into the developer's bank account has serious risks and disadvantages for the buyer read more...
Buying a condo leasehold
One of the major disadvantages under Thai law is that Thailand does not know real leasehold laws, but only hire of property. Under hire of property laws a condominium leasehold purchaser in Thailand becomes a tenant and has limited rights, other than possession. This for example means that a lease in Thailand is not freely transferable and as a tenant the leasehold purchaser has no vote in the joint owners meeting and matters relating to management of the condominium. In addition, a leasehold contract, as a tenancy, is under Thai law terminated upon death of the lessee read more...
Sale and purchase agreement
The sale and purchase agreement for a condominium specifies in detail the responsibilities of the buyer and seller of the condominium. A sale and purchase agreement covers among others
- the agreed price and payment schedule,
- transfer date,
- exact details of the condominium,
- responsibilities for transfer fees and taxes,
- warranties and matters relating to due diligence.
At the time of transfer a second official Thai script land office sale agreement is signed. It should be noted that everything at the land office is done in Thai.
Saleable floor area
The apartment price in the contract for a not yet completed condominium is based on the saleable area with a final price based on the registrable area of the unit. Saleable area means the area on which the contract price is based, and registrable area means the price based on the final exact floor as measured by the Land Department upon completion. These are not the same read more...
What are the common mistakes
- Not having clearly agreed in an off the plan purchase agreement that the purchase concerns a freehold purchase of a condo registered under the Condominium Act, and not a leasehold purchase;
- Not having transferred foreign currency into Thailand at least equal to the purchase price;
- Not having obtained legal advice on how taxes and transfer fees are to be divided and ending up paying more than necessary;
- Not having obtained legal advice on the condominium sale and purchase agreement, required terms and conditions and responsibilities of the parties;
- Not having conducted due diligence on a project or unit and being confronted with unexpected issues after signing the purchase agreement and having paid the deposit;
- Not having checked the condominium title deed and previous land office sale agreement to ensure that the apartment is free of encumbrances;
- Not dealing with a registered condominium under the Thailand Condominium Act but an unregistered leasehold residential apartment building.
Condo manager and condominium meetings
Every condominium shall have at least one manager who is appointed in the general meetings of the joint owners. Learn more anout the responsibilities of the condominium manager, the condominium committee, procedure for meetings and expenses of the condominium in the condominium handbook.
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As there is for developers of condominiums in Thailand no legal requirement to establish escrow accounts for deposits and payments made by purchasers, buyers in off-plan condos are often very much at the mercy of the developer. Not only could the customer loose all payments made for the condo in case of default by the developer, the customer also looses all his leverage in case of breach of contract and poor workmanship. The best advice for buyers of condominiums, pre-construction or under construction, is to demand that payments are made in escrow, however such arrangements are generally not accepted in Thailand read more...
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