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 INVEST IN THAILAND  

 

"Investing in Thailand requires market insight, patience... and good advisory“

You will find here a full screening of why and how invest in the Bangkok property  marketFocus is on condominiums, the only type of property foreigners can own directly.   

 

   

PAGE MAP (click on a link)

>  WHY INVEST IN PROPERTY IN THAILAND?

>  TYPES OF PROPERTIES IN THAILAND

>  PROPERTY TAX REGIME FOR CONDOMINIUM UNITS

>  CHECK-LIST AND PROCESS FOR THE PURCHASE OF A CONDOMINIUM UNIT

 

  

WHY INVEST IN PROPERTY IN THAILAND?

A/ Economic environment

  • Strong and diversified economy (agriculture, food industry, car industry, hardwares, telecommunications, tourism, etc.)
  • Slow growth and inflation under Asian standards
  • Remarkable resilience to internal crises (political unrest, natural disasters, etc.)
  • At the heart of the upcoming AEC (Asian Economic Community)
  • 3rd most promising emerging market in the world
  • 19th most competitive macro-economic environment in the world
  • Massive infrastructure development plans
  • Large hub for Japanese manufacturers

  

B/ Property market: trends & opportunities

- RENTAL MARKET

  • 80% of foreigners in condominiums (100% in apartment buildings)
  • Shortage of quality and large units (2 beds or more) for rent
  • Increasing demand in prime areas due to the positive flux of expatriates (4,000 new work permits for skilled employees in 2014)
  • Bangkok is the 7th best city in the world for expats in (2014 HSBC survey)
  • Multinational companies are increasing their presence in Thailand
  • Significant hike in rental prices in 2014-2015
  • 96% occupancy rate in apartment buildings in prime areas as of Q3 2015

=> Rental prices are expected to keep on rising, particularly for large units (2 bedrooms +) in residences offering high-quality standards.

 

- SALE MARKET

  • Thais account for 80% of condominium owners in Central Bangkok
  • Thais are mostly focused on new condominiums (off-plan buyers)
  • ≠ Foreigners are more attracted to the resale market
  • Sales prices are lower in Bangkok than in most large Asian cities (e.g.: 5 to 6 times lower than in Hong Kong and Singapore)
  • Prices vary significantly (ratio of 1 to 3) between condominiums (age, grade, quality, reputation) in the same area
  • Resale prices are just half of new condominium prices in average
  • Drop in average unit size and number of bedrooms for the new buildings since 2010
  • Due to the boom in land prices and the strong demand from wealthy buyers from Thailand or neighboring countries, developers shift their focus to luxury projects

=> Condominium sales prices are expected to rise in the coming years in quality condominiums (well built, well managed and well maintained) located in prime areas.

=> The gap between old and new condominiums offers interesting opportunities for investors well advised and ready to renovate.

=> The luxury market is set to keep on increasing fast.

 

  

TYPES OF PROPERTIES IN THAILAND

A/ Condominium units

  • Only type of property that can be owned “freehold” by foreigners

 

       

B/ Other properties (buildings, houses, land, hotels, etc.)

  • Only “leasehold” is allowed for foreigners
  • Thai lawmakers are very protectionists when it comes to land ownership. It is therefore unlikely to see the law change in favor of freehold ownership of land by foreigners – at least for the next decades
  • Foreigners willing to own “freehold” properties other than condominium units have no other choice than to set up a Thai company for the purpose of this acquidition

 

  

 

C/ Purchase of condominium units by foreigners  

  • Straightforward process
  • Accessible to any foreigner (individual or company)
  • There are 3 conditions to fulfill to acquire a condominium unit as a foreigner are:

1/ the building is registered as a Condominium 

2/ the foreign quota (for the condominium considered) of 49% of the total space of   all units is not reached yet - See section 19 of the Condominium Act - http://www.dol.go.th/low_ministry/commandment/condo_no3_2542.htm

=> This quota must be checked by the agent at the juristic office of the condominium before starting the sale & purchase process.

3/ The funds necessary to the acquisition are brought in foreign currency into Thailand. The Thai bank that converts the funds in THB issues a Foreign Exchange Transaction Form to present to the land department when the title deed is transferred. The purpose of the transaction must be indicated (ex: “purchase of a unit in the condominium X”).

  • Foreigners who don’t have a Thai bank account generally send the funds to the account of their Thai lawyer assisting for the transaction.

  

D/ Purchase of other types of properties 

  • The general concept of property ownership in Thailand is straightforward:

=> Any property directly related to the ownership of land is forbidden to foreigners 

  • Foreigners can own a house or villa but they cannot directly own the land on which the property is built
  • In most villa developments targeting foreigners, the legal structure offered is to:

=> Lease the plot of land for 30 years or more (leasehold)

=> Purchase the house 

   

 

PROPERTY TAX REGIME FOR CONDOMINIUM UNITS

A/ Taxes on property transfer ("conveyance taxes") 



 

B/ Tax on fund repatriation

=> no tax applicable to foreigners who repatriate their funds resulting from the sale of their condominium unit in Thailand as long as:

  • the conditions to purchase a condominium unit as a foreigner have been met, 
  • the conveyance taxes have been paid in full

 

C/ Tax on capital gain

=> no tax 

  • This particularity of the tax regime in Thailand offers very interesting opportunities given the expected increase in market prices 

 

D/ Tax on ownership

  • In theory, annual “Land and Housing Tax” of 12.5% of the rental income or the estimated rental value by the district office, whichever is higher, if the property is owned by a company (either Thai or foreign)
  • In practice not applied (self-declared), and no control

 

E/ Tax on income from rental

  • In theory, withholding tax of 15% of income if owned by foreign co. (5% if Thai co.)
  • In practice not applied (self-declared) if tenants are individuals, and no control

   

 

CHECK-LIST AND PROCESS FOR THE PURCHASE OF A CONDOMINIUM UNIT   

  

          
                                                                                                        

 

CONTACT US for more information

 

 

 

 

 

 

Consult our complete analysis of the economic environment and of the property market in Bangkok:

THE BANGKOK INVESTOR's VIEW 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

  

 

 

 

 

Consult our pages RENOVATE YOUR PROPERTY and PROPERTIES TO RENOVATE

 

Consult our page LUXURY HOMES

 

 

 

 

  

 

Find condominiums for sale in our pages 

CONDO/APARTMENT FOR SALE

LUXURY HOMES

PROPERTIES TO RENOVATE

FEATURED / HOT DEALS

 

 

 

 

To understand the process of purchasing a condominium unit as a foreigner, consult the section Purchase of condominium units

 

 

 

 

 

 

If you are interested in purchasing land, houses (freehold) or any other property type, please CONTACT US 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CONTACT US for more information 

 

  

 

 

 

 

 

Understand the property market with our page THE BANGKOK INVESTOR's VIEW

 

 

 

 

 

 


 

 

 

 

 

CONTACT US for more information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CONTACT US for more information

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