Owning a home for an expat in Thailand is quite common and easily done, despite the fact  that land ownership by foreigners in Thailand is not allowed. A foreigner can own the house with all the rights that home ownership entails, just not the land that it is sitting on. This being said, there are many legal ways to get around this, which make it very safe for foreign ownership.

The Thai government welcomes foreigners in the Thai communities. Being a less affluent country, Thailand realizes that Expats will bring much needed money into their economies. They buy more goods than the local people and have more leisure time and surplus cash available to spend on entertainment, household goods, and luxuries. In this way, foreigners provide a steady stream of cash ready customers to keep local shops and restaurants in business and also provide an abundance of jobs for the local tradesmen in the building and construction industry.  So what government wouldn’t want that? As far as the Thai government is concerned, if foreign ownership falls within the boundaries of the law they are all for it.

Many Asians countries allow foreigners to buy property, but similar to Thailand land ownership is not commonly permitted. In Singapore, it is very common even for the Singaporeans not to be able to own land. Instead most will have a 99-year leases on their property. In Singapore, the cash out lay is much greater with properties ranging from a few hundred thousand to into the millions of dollars.

There are actually 3 ways for a foreigner to legally own property. Probably the safest way is a straight 30 + 30 year lease, but there are few companies who propose this option. With this option you wouldn’t have the bills or hassles associated with running a Thai company. The next option would be to create a Thai company with a solid 30 year lease in place with options to renew for another 30 etc. Then draw up a loan agreement where you personally lend the company money, stating it must be paid back with interest if the property is sold. In this way, it prevents the 51% Thai shareholders from selling your company, ie your house. It is very doubtful that they ever would though, especially if your company is set up with the Thai shareholders giving you proxy and the right to cast their vote on their behalf. This method essentially not only gives you full control of the company, and your home and land, but also abides by the land ownership laws.

Another popular option is marrying a Thai. This can be great if your affections are returned and it is true love but often this makes a very risky way to buy a home. Property is put into the spouse or your partner's name and should an unexpected divorce or separation  happen the property clearly belongs to the Thais spouse or partner according the laws of Thailand.   

Another consideration you may wish to arrange with your Thai Bank prior to your home purchase is to receive a foreign exchange certificate  when your money is transferred into the country. To do this, you  bring the funds for the purchase of your home into your Thai company (bank account) first instead of transferring the money into the builder or owner account. Later, you may take the funds out without being taxed if you decide to sell your home. The foreign funds must be brought into Thailand and converted to baht once inside Thailand afterwards, the purchase can be made with no future tax problems. Likewise the purchase amount must be converted from baht to foreign currency, inside Thailand, before transferring the funds back to your home country. Any appreciation, of course will be taxable but only if you are planning to take the funds outside of Thailand.

With buying a home, there are several factors to be considered. First- does the property really belong to the seller? What does the title look like? Can you even get a title? In Thailand, when a loan is made by a bank using the land as collateral, the bank will hold the Title.

It is quite common for a Thailand owner to take out many loans on the property, once he has legal title. So, even though you may be purchasing the house, the owner may or may not have the legal right to sign a lease with you or sell you the property. If the title is not available, you will want to investigate the purchase more carefully before you precede. Check that the land is surveyed and that the pins match. Often the numbers on the pins are difficult to find as they are buried and in all likelihood will be covered with brush etc. Surveyed land makes a much safer buy as it has been zoned and if it is environmentally protected land (which is illegal to build on) you will know this.

You should receive an original of the Title, with a colored Garuda on the top of it. If the Title is only a copy, the Garuda will be black and that means that someone else has ownership of the title.  A Red Garuda means that the land has been zoned already and even the government does not have the right to expropriate; a Green Garuda means that the area has not yet been fully planed, and could be zoned by the government at some future date as a great location for a highway. In this case, the Government could expropriate your land and building and pay you what is considered fair value by Thai standards which means it will likely be disappointing to an Expat.

Be careful with the contracts you sign with builders. They will try to convince you that all the expats sign these even though they may be written in Thai, a language you have yet to learn. All expats do not sign such agreement. It is simply not true.

One company had set up houses to be built with installments payments, which in principle sounds fine. However, in their agreement it stated that if you were one day late with a payment, even if that happened with the last payment they kept the house and all funds paid to date.

With their agreement as well, you were not transferred the title until you had made the last payment for building the house. At which point should there be problems with the title or the workmanship there would be a high likelihood for a seemingly good deal gone bad.

Other ploys the builders often used are walking you through a gorgeous show home. This house looks beautiful, and though they promise you it will fit onto the lot you have selected and that most of the finishings are standard, come time for the contract signing, you may find this has changed. All of a sudden the nice tile that was in the show home is an upgrade, the show home has more square footage, than the blueprint, so now the lot is not big enough to build the house on. You can buy extra land, or upgrade of course but all at extra cost. Soon the great deal that they advertised is no longer the case. By that time, you will be focused on buying a new house and probably will not be thinking clearly.  So, compare all the builders equally and thoroughly and review the contracts carefully, to really, find the best deal with new construction. If you consult a lawyer, be sure that the lawyer is registered with Law Society of Thailand. An unregistered lawyer will bring its own set of potential problems.

No doubt, Developers will try to gently, but persuasively pressure you into signing the contract, on the spot, stating prices are about to jump. A word of caution though, this is a well know high- pressure sales technique so don’t be mislead by the innocent faces and gentle technique. Try to put aside your emotions and think clearly. Although the houses here are still a great value, if you lose that money without getting the home that you were expecting it is a serious financial loss for you nonetheless. Yes, the prices are rising on houses, but most likely not that significantly in the next week or two that it takes you to review the contract, investigate your purchase and use sound judgment.

At high season, which is November to January, house prices do tend to make a yearly adjustment up. This is due to increased demand, availability and the rising price of labor and materials. Therefore buying property prior to November will generally make for the best deals for the buyer.

Currently Hua Hin is the midst of a construction boom. While this provides many opportunities and options for home building, it also brings out a few shady construction companies looking to make an easy buck. Shortcuts will include improper supervision and training of workers, substituting low cost and inferior materials to increase the profits and not going through the proper channels to ensure they are building on legally titled or even have suitable land for building.

It is therefore, an unfortunate fact of life, that to protect themselves, the home buyer must thoroughly investigate any construction company they hire, understand Thai ownership laws, and learn how to recognized good construction from bad.

Generally, westerner’s will want to buy houses built to westerner standards. Although even the western standards vary from builder to builder so it’s important to check before buying. The biggest difference in Thai standards versus western are the kitchens, bathrooms, wiring, room size as well as the materials. In addition to looking radically different, Thai kitchens are often outside, and usually the homes will not have sufficient electrical plugs and/or a big enough breaker box to accommodate the western style appliances and conveniences. Most of the house wiring will not have a ground wire.

Bathrooms will have a sunken toilet with a spray washer and unusual variations of a sink. They will certainly not have hot water. The shower will consist of only a shower head which sprays onto the floor and empties into a common drain. The kitchen and bathroom will not have outdoor venting, which comes in handy not only from a safety standard but sometimes is necessary to get rid of those nasty odor quickly. AC’s and the sufficient wiring to accommodate them will usually be lacking.

Because of the high humidity and problem with terminates in Thailand, the building material is generally not wood, as generally used in the west. Rather it is a post and beam construction using reinforced concrete. All houses should be raised somewhat although to the height of the Thai stilts is not really needed. Houses should have gravel underneath the cement foundation in case of any drainage problems. Outdoor water tanks are important as well to ensure adequate water during the hot season, even if the house is connected to the city water.

With a pre-built house although you can quite easily determine the quality of their interior finishing, it will be difficult to determine, if shortcuts have been taken in the house construction itself. Wiring, foundation material, (footing and cement) and metal trusses for the roof can all be short changed making a savings for the construction company and unfortunately will only be apparent to those who investigate. A house, which is raised, even by a couple of feet usually means that proper foundations have been taken into consideration. An inspector can be hired who will look up into the roof for a fee and be able to view electrical, roofing steel and cement width.

Contracting a house to be built can also have it’s own set of problems. Many building contractors allow for inspections but do you have the time to conduct these at the necessary stages and a knowledge of construction to know when things are not being done right? Will the general workmanship and quality be the same as the show home? There are however, ways around this, there are Thai construction companies who will photograph the building stages for you for a fee of 5% of the overall house price. Also inspectors can be hired that make sure that the company is following through with the construction standards, workmanship and materials you sold you.

Another factor to consider is if you (or your Thai company) are not transferred title to the land until you have made the final house payment have you at least seen a copy of the title? If not, at this point it may run into difficulties if you haven’t inspected the title prior to the signing the contract. Watch for any extra names on the back of the title. This indicates liens against the property, which must be paid off at the time of the title transfer. It is also important to follow through with paperwork to clear the title, so that there will be no questions regarding ownership at a future date.

Once you are the legal owner of a house, you will be presented a house book. Sometimes the books are empty and sometimes a Thai is registered as living inside. The expats normally view this to mean that at some date, the registered Thai will show up and the expat will be evicted from their home but not so. The house book is merely a means by which the Thai government does an informal census of Thai residences. It does not show ownership of the home and the person’s name can be removed from the house book, at any time as obviously they are not living there. Your name, however can not go in, since the Thai government is interested only in recording Thai occupancy and not expats on their census.

Check List for Completing a Title Transfer

Step One: Investigate the Title, ownership of the property and check that the land has been surveyed.

If the land is not surveyed, it will be difficult to get a clear title. This may present problems for you in the future and as a side-note, much of the land here is not surveyed. Unsurveyed land is best left for Thais land buyers. You can ask the current property owner for a copy of title, but make sure you receive both the front and back. Liens or caveats are listed on the back. If there are liens on the back you may wish to ask if they hold the title and then carefully check the color the garuda to make sure you are getting zoned land.  The information on the title will all be in Thai, so you will need a translator to decipher it. There will be pin numbers on the front, but they are written in Thai. Make arrangements to confirm the pin numbers if practical.

Step Two: Set up a Company 

Usually the property seller will help you arrange a reliable company who will do this. Forming a company takes about three weeks, and you will have to come up with three choices for a company name. It cost approximately 22,000 Baht, (US $550), and there will be a yearly fee for an accountant to do paper work for you, about US $500 - $1000.

After your company is legally formed; you will be given a company stamp. If you want input into what the stamp will look like, provide it in advance otherwise it is typical for whoever is forming to company to do this, and you may or may not be happy with the results. Be very careful with this stamp and keep it in a safe place, such a safety deposit box. Should you decide to sell your land at a later date, you will need to use it again.  Anyone can use this stamp if it is in their possession to legally conduct business in your company’s name.

Step Three:  Set up a Thai Bank Account and transfer funds in it to be ready for purchase. You should look into obtaining a Foreign Exchange Certificate for tax considerations, from your bank, if you think one day you may re-sell the home. 

You might want to consider a local bank, so you do not have to drive into Bangkok for step number four.

Step Four: Go to the bank with the property owner and draw up a cashier’s cheque. With a cashier’s cheque you will fill out the person or company to whom it is payable. You may however wish to wait until you are at land titles before filling in the name. Basically, at this point the cashier’s cheque is regarded as cash because the funds have already been deducted from your account.  There is a fee for a cashier’s cheque - about 1,000 baht. This process should only take an hour or two at the side counter.

Step Five: Go to land Titles, and begin to process the Title in your company’s name.

Generally, the seller covers this cost, but with some companies a 50/50 split is charged.  Transferring the title is an all day process so, be prepared for a long day and be there when Land Titles opens in the morning. Complicated Title transfers may take longer, but the office staff can be persuaded to work overtime, provided you are willing to pay for this, not much though - try offering about 2,000 baht.  You will be asked to use your stamp, so bring it along, and the documents will all be in Thai. This being the case, you might want to bring along an impartial translator who can ensure you are signing what you believe you are and can compare that the pin numbers match.

Step Six:

Give the property owner the cashier’s cheque, at the same time you collect your Title from the land office. Keep your Title safe, if you lose it or have it stolen, it is a major ordeal to have it replaced.

Feel free to send me emails with your questions, comments and concerns and we will answer your emails as best we can.

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