The process for transferring property ownership in Thailand is relatively straightforward, but it involves several steps and legal procedures.
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Due diligence : Before proceeding with the purchase, it’s essential to perform due diligence. This involves checking the property’s title deed to ensure that it’s clean and free from any encumbrances (such as mortgages or legal disputes).
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Sales and Purchase Agreement : Once both parties agree on the terms of the sale, a Sales and Purchase Agreement (SPA) is drafted. This contract outlines the purchase price, deposit, payment terms, and any conditions for the transfer of ownership.
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Transfer of funds : Foreign Currency Transfer (for foreigners): Foreign buyers must transfer funds into Thailand in foreign currency to finance the purchase. This is important for obtaining the Foreign Exchange Transaction Form (FETF) from the receiving bank, which will be required during the transfer process.
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Payment of Taxes : Transfer Fee (2% of the value of the property usually shared between buyer and seller) ; Specific Business Tax or SBT (3.3% of the sales price, usually paid by the seller, if the property is sold within 5 years of acquisition unless the property is registered as the owner’s main address in the “Blue Book” or “Yellow Book” in such case the SBT only applies for 1 year after registration) ; Stamp Duty (0.5% of the sales value, usually paid by the seller, if SBT is not applicable) and Withholding Tax (1 to 5% of the sales value depending on number of years of ownership, usually paid by the seller)
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Transfer of Ownership at the Land Office : Both the buyer and the seller (or their legal representatives) must attend the local Land Office to complete the property transfer. All necessary documents (such as the title deed, sales contract, and FETF for foreigners) are submitted at this time. The transfer of ownership and new registration is happening on the same day.
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Final payment and completion of the purchase and sale transaction : The final payment to the seller happens at the land office in the form of a cashier’s cheque which is handed to the seller upon handover to the buyer of the update title deed (“Chanote”) with the buyer’s name on it. The transfer of funds and ownership must happen simultaneously. If the property is mortgaged, the bank will bring the title deed to the land office and clear the loan at the same time as the Chanote changes hand.
- You may also find our
checklist for buying a condominium useful.