Buying basics in Thailand

Wednesday, May 27, 2009

Foreigners cannot own stand-alone houses or land in Thailand, but there are a number of common ways to work around that stricture. Mr. Gray says foreigners can set up a Thai company through which to buy property (though new regulations may soon make this method more difficult).

It costs 30,000 to 50,000 baht (about $880 to $1,460) to set up a company for this purpose, Mr. Gray said, and running costs after that come to about 20,000 baht (about $590) per year for accounting fees and taxes.

Many foreigners buy property in the name of a Thai person they trust, according to Mr. Gray. They can then lease the property back from the official owner for up to 30 years. The lease can be renewed at the end of its term, Mr. Gray said.

Foreigners are permitted to own a condominium or apartment outright, as long as more than half the development is owned by a Thai entity. “Any building can be up to 49 percent foreign owned,” Mr. Gray said. “There has to be majority Thai ownership in the building.”

When property changes hands, the buyer pays transfer taxes, fees and stamp duties to the local land officials. Mr. Gray says these costs are normally 5 to 6 percent of the declared value of the property. (Declared value is determined by the government, and is usually 50 to 60 percent of market value.) But Mr. Gray also said that the government, in an attempt to stimulate the market, had reduced all taxes and fees to less than 1 percent of declared value until April 2010. The seller pays the real estate agent’s commission, which ranges from 3 to 5 percent of the sale price.

USEFUL WEB SITES

Ministry of Foreign Affairs: www.mfa.go.th

Official tourism site: www.tourismthailand.org