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How to buy Condominium ?
If you are considering buying property in Phuket, the first thing you should know is that under Thai law, foreigners are not allowed to own land. However, foreign nationals do have the right to the ownership of buildings distinct from the land such as condominiums.

Foreign nationals may own:
A unit in a registered Condominium
A bouilding distinct from its land.
A registered leasedhold of up to 30 years for all types of titled land or buildings.

Foreign nationals may not own:
Freehold land.
More than 49% of the shares in a Thai company that owns freehold land.

Note: Before purchasing property in Thailand make sure you have a good lawyer. See lawyers below.

Purchasing a Condominium
Under the Condominium Act (1979) foreigners can own the freehold of 49% of the total unit space in any legally registered condominium building. The purchaser must request a letter of guarantee from the condominium juristic person setting out the proportion of foreign ownership which must be submitted to the Land Department upon transfer of ownership.
   

Foreign Exchange Transaction Form

A foreign purchaser must bring in 100% of the funds from overseas in foreign currency and will need aForeign Exchange Transaction Form (FETF) from the Thai bank in order to provide evidence of this to the Land Department. Due to strict money laundering regulations, a FETF is also necessary to avoid complications and remittance tax when repatriating funds should the foreigner sell the condominium at a later date.

Note: You can only obtain a FETF for any inward remittance for amounts not less than the equivalent of USD 20,000. You should clearly indicate the payment purpose on the payment order form in the field for a message for the beneficiary, including the name of the condominium and the unit number.

Thai Women married to Foreigners

Prior to 1998, any Thai woman who married a foreigner would lose her right to purchase land in Thailand. She could, however, still retain land that she owned prior to marrying the foreigner. However, the recent (1999) Ministerial regulation now allows Thai women married to foreigners the right to purchase land, but the Thai spouse must prove that the money used in the purchase of freehold land is legally solely theirs with no foreign claim to it. This is usually achieved by the foreign spouse signing a declaration stating that the funds used for the purchase of property belonged to the Thai spouse prior to the marriage and are beyond his claim.

   
Thailand and Property & Land Taxes
Category
Sale of Freehold
Land & Property
Transfer of Leasehold Land
Sale of Building
Liability to Tax
Transfer Fee
2%
N/A
2%
Seller/Buyer
Lease Registration Fee
N/A
1%
N/A
Lessor/Lessee
Specific Business Tax
3.3% or N/A
N/A
3.3% or N/A
Seller
Stamp Duty
0.5% or N/A
0.1%
0.5% or N/A
Seller
Withholding Tax
1% or 5 – 37%
N/A
1% or 5 – 37%
Seller
Taxes and fees is something that is not always mentioned when buying a property and you could get a nasty surprise a couple of months after making your purchase in the form of a hefty tax bill.
Whenever a property in Thailand is purchased or sold there are four potential taxes/fees to be paid. Which of these taxes/fees will be applicable depends on the details of the transaction, the seller and the duration of the seller’s ownership. It is also significant to note that most of the fees are calculated relative to the government’s “tax assessment value” of the property and this value is usually well below the market value.

Transfer Fee

This is based on the appraised value of the property and is normally shared equally between both buyer and seller, although this needs to be agreed by both parties.

Lease Registration Fee

This is based on the total rent payable over the lease term, and is normally shared equally between the lessor and lessee, although this must be agreed by both parties.

Specific Business Tax

Specific Business Tax (SBT) is payable by companies and individuals who have owned the property for less than five years. It is based on the official appraised value or the contracted price, whichever is highest.

An individual may be exempt from SBT if they have used the property as their principal residence and have had their name in the household registration certificate for at least one year.

Stamp Duty

Stamp Duty is only paid when SBT is not applicable and is based on the official appraised value or the contracted price, whichever is highest.

Withholding Tax (WHT)

If the seller is a company, the WHT on the sale of the property is calculated at 1% of the official appraised value or the contracted price, whichever is higher. If the seller is an individual, the WHT is based on the individual’s marginal tax rate (except that the first 100,000 baht is taxed at 5% rather than falling under the tax-free threshold) after deducting from the official appraisal price a standard deduction based on the number of years of ownership.

Property Taxes

Once you have acquired the property, there are 2 different types of tax levied on property in Thailand that you need to be aware of:

Land Tax

This is an annual tax levied on land ownership equivalent to just a few Baht per rai. The amount is often so miniscule that in practice the body charged to collect it, rarely bothers to do so. When they do collect it, its usually after several years when the amount has accumulated.

Structures Usage Tax

This only applies to properties used for commercial purposes. This is applicable at the rate of 12.5% on the actual or assessed gross rental value of the property. However, this notional value is well below the commercial market rental value.

Notes

If the house is purchased through a company, you need to consider that corporate tax is higher than personal tax, and the cost of setting up the company has to be considered as part of the initial investment, even if this is relatively modest.

If you wish to purchase property in Thailand using Thai Baht, ensure that your funds are transferred to Thailand in foreign currency and converted to Thai Baht here. The receiving bank will issue a Foreign Exchange Transaction Formconfirming the transaction for individual inward transfers exceeding 20,000 US$, which is one of the documents you may need in the future if you wish to repatriate funds without incurring tax penalties.

Repatriation of investment funds and repayment of overseas borrowing in foreign currency can be remitted freely upon submission of supporting evidence. One of these documents would be the Foreign Exchange Transaction Form mentioned above, or in respect of a foreign currency loan and the loan contract. Remittance of funds without proper documentation could be regarded as income and become liable for tax.