subject: 5 Thai Law Consulting Issues Around Condominium Purchase [print this page] Despite the fact that land ownership in Thailand is very strictly regulated, differences between Thailand and Western economy coupled with the natural beauty of the country mean that property purchase by foreigners makes up the bulk of many Thai law consulting firms work. The tightened regulations mean that there are plenty of Thai law issues to be considered before any paperwork can be finalized or signed - today we check out 5 major issues faced when buying a condominium in Thailand.
Thai law condominium issues: Foreign freehold ownership
Foreign freehold ownership of a condominium, rather than actual land, is the easiest way for foreigners to own a place to live in Thailand. Legal requirements include:
- Being able to legally enter Thailand
- Proof that the purchase funds were remitted from overseas. However, foreigners with Thai residency are exempted from the second obligation.
There are quite a few rules regarding the proof that the purchase funds are from overseas - check with your Thai law firm before arranging anything definite.
Thai law condominium issues: Married buyers
It is a serious legal requirement that you divulge your marital status while purchasing a condo under Thai law. Your Thailand legal service can advise whether it would be preferable to purchase the condo in joint names, or as a sole purchaser - but either way your foreign or Thai spouse will need to be listed. If you both agree that the condo will be solely yours, your spouse can sign a release form.
Thai law condominium issues: The 49% quota
'The 49% quota' refers to the fact that in any condominium block, ownership by foreigners cannot constitute more than 49% of the living space. While this is rarely an issue in Bangkok, in resorts areas like Koh Samui and Phuket, there is serious under-utilization of condo space because of this rule. Make sure you have written confirmation from the condo's developer or juristic person that your purchase keeps the percentage under 49% - or it is conceivable that you may have to surrender the condo under Thai law.
Thai law condominium issues: Due diligence
It is highly recommended that due diligence is carried out by your Thailand legal service. It includes actions like:
- Checking the title deed given by the seller against the original held at the Land Office
- Confirming that there is no mortgage or other charge on the unit
- The size of the unit is correct
- The assessed value is correct
- Checking the prior sales history of the condo
Thai law condominium issues: Purchasing with an offshore company
Although this method of purchasing a condominium is certainly more complicated and requires more involvement of your Thailand corporate legal service, it does have many advantages. In some cases the profits are not taxable in Thailand, and if you choose your offshore jurisdiction carefully, the profits may not be taxable overseas either. However, the company is subjected to the Land and House tax during the period of ownership.
