Can I own property in Phuket, Thailand ?
Foreign Nationals may own
A unit in a registered Condominium
A building (as distinct from it's land)
A registered leasehold of up to 30 years for all types of titled land (and/or buildings). However with appropriate extension and purchase options a 30 year lease can become tantamount to freehold purchase.
Foreign Nationals may not own
Freehold Land
More than 49% of the shares in a Thai company that owns freehold land
How is it measured ?
Land is measured in Rai, Ngan and Wah
1 Rai = 4 Ngan (or 1600 Sq.m.)
1 Ngan = 100 Wah (or 400 Sq.m.)
1 Wah = 4 Sq.m.
1 Acre = 2.5 Rai (approx.)
1 Hectare = 6.25 Rai (approx.)
Metric measures are usually used in the construction and measurement of buildings Land prices are usually expressed in Baht per Rai or (for smaller plots) Baht per Wah
What will it cost me ?
Labour and local building material costs are low, but imported materials and prime beach land cost more than many would expect. Proximity to the beach is the single biggest determinant of land cost. Beach front land can cost up to fifty times that of land plots in the centre of the island.
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Land Purchase:
Thai law stipulates that foreigners may not personally own land in Thailand. That is to say in their name. However, they have the right of freehold ownership on their own name of building(s) only. If a foreigner wishes to purchase land to build a property there are 2 options:
1. The land is purchase on 30 year leasehold, with an option to extend the lease for further 2 of the 30 year periods (90 year in total). Possession of the fact the property occupies of the land. The lessor cannot seize the property upon expiration of the lease, as the property is separate from the land.
2. If a foreigner is going to operate a business in Thailand then he may purchase the freehold of the land through his Limited Company. The land will be owned by the company, not the individual. The foreigner then exercises complete control and ownership.
Even recent amendments that allow a Thai spouse (male or female) of a foreigner to buy land require proof that the money used in the purchase of freehold land is a legally solely theirs with no foreigner claim to it
NOTE: It is important that buyers are aware of the different grades of land title in Thailand and they should make sure that the land has an adequate title for the intended purpose.
House Purchase:
If however, what you want is a house, the fact that you can't acquire freehold land should not be deterrent. You may own building freehold and together with constructed (typically a 30 year lease with 2 prepaid 30 year renewals) and a purchase option for the land (that could be exercised in the event the laws of foreigner ownership, to be a Thai person or legal entity) you will have effective ownership, yet still remain within the laws of Thailand. Again, this option is best arranged through the formation of Limited Company where the ownership of the land is desired.
House Purchase:
If however, what you want is a house, the fact that you can't acquire freehold land should not be deterrent. You may own building freehold and together with constructed (typically a 30 year lease with 2 prepaid 30 year renewals) and a purchase option for the land (that could be exercised in the event the laws of foreigner ownership, to be a Thai person or legal entity) you will have effective ownership, yet still remain within the laws of Thailand. Again, this option is best arranged through the formation of Limited Company where the ownership of the land is desired.
Condominium Purchase:
Purchasing a condominium is the easiest, simple transaction. The law allow foreigner to hold 49% of the units in a condominium freehold which in certain condominium blocks a full 100% of the units can be foreigners on a freehold basis. One important requirement in order to qualify for freehold status is that the foreigner currency funds for the purchase have been remitted from abroad and correctly recorded as such by a Thai bank. The foreign freehold is definitely the preferred structure for purchase of condominium apartment.
Foreigners have the right to ownership of buildings only, where land is not included. Legal acts are unlimited. A suggestion for foreigners are to lease the land for 30 year with an option to an extension of the lease, then purchase ownership of the house built on the land. Certainly of possession of the land house is assured, by being the owner of the house. The ownership of the land shall be leased out. If arranged as stated above, then the house will be separate from the land, and will not a component part under the Civil Law. Ownership of buildings can be confirmed, and the lessor cannot seize the house upon expiration of the lease.
Payment method for your property:
If you are purchasing property in Thailand and you want to pay in Thai Baht ensure that you funds are transferred into Thailand in foreign currency and converted to Thai Baht here. The reason for this is that the receiving bank will issue a Foreign Exchange Transaction Form confirming the transaction. The relevance of the Foreign Exchange Transaction Form is that it is one of the documents you will need in the future if you wish to repatriate funds without incurring tax penalties. Also, please be aware that Banks will only issue Foreigner Exchange Transaction Form for individual inward transfers exceeding 20,000 US$. 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, the loan contract. Remittance of funds without proper documentation could be regarded as income and become liable for tax.
Other cost involves in purchasing a property?
Property tax - Does not apply to property being used for private residential purposes.
Costs only apply upon transfer of ownership. These fall into four categories:
• Transfer fees 2%
• Stamp duty 0.5%
• Business tax 3.3%
• Income tax (the Thai equivalent to capital gains tax - a variable rate).
Most of the fees are calculated relative to the government's "tax assessment value of the property" and this value is well below market value.
The precise methods of calculation are complex, but as a rough guide for residential sales, expect the total fees and taxes to work out to be approximately 2-3% of the property market value-and usually these costs are split between the buyer and seller.
What kind of visa can I get to stay in Thailand ?:
There are four basic types of visas available for visitors and residents to Thailand.
Transit visa - valid for 14 days will be issued to those people arriving in Thailand without a visa. Technically you must have an onward flight ticket, but in practice this visa will be issued almost without question. Note : There are a few countries (not many) that do not require visas and will get a three month entry stamp on arrival - in general these countries are the ones that grant the same rights to Thai nationals visiting their countries.
Tourist visa - issued by Thai embassy abroad - these visas will be valid for 60 or 90 days (varies from country to country). Of note is that you may apply for more than one Tourist visa at a time and these multiple visas may be used up consecutively. Many quasi resident visitors to Phuket (who do not work - or want to avoid the red tape of a Non Immigrant visa) live for years on a tourist visa (and go shopping in Singapore or Penang every three months). So long as you are solvent and not engaging in any local business activity, there is nothing wrong with this approach
Non Immigrant visa - issued at an embassy outside Thailand and valid for a 90 day stay, this visa may be extended within Thailand for periods up to one year at a time. There are three basic grounds to obtain and renew a Non Immigrant visa. 1) that you are employed (and have a work permit) in Thailand. 2) That you have Thai family. 3) That you are retired and can prove adequate pension or other financial means to support yourself. Ownership (or long lease) of property has no bearing on the extension of a Non Immigrant visa. Lengthy form filling and copying of personal documents (in duplicate) are required both when you first apply and for every subsequent renewal of this visa. If you hold a non Immigrant visa, you should obtain a Re-Entry permit if leaving the country if you do not wish your visa to lapse.
Resident visa - rarely issued and hard to obtain. These visas are issued on a very selective quota basis. Qualification requirements include reading and writing Thai, a fairly strong local financial status and some good (influential) Thai references.
Can I work in Phuket ?
There are generally very few employment opportunities for a foreigner in Phuket. The biggest employers of foreigners are the hotels (management, finance and chefs), but these appointments are usually filled from abroad. The second biggest employer of foreigners will be the International schools (some of these positions are local hire). Most other legally employed foreigners (and the biggest group overall) on the island are the owner/proprietors of small businesses.
Every foreigner employed needs to have a work permit before he can work. The company employing you must apply for this. Generally no company with a registered capital under 3,000,000 Baht may employ a foreigner (unless it can be proved that the job he will engage in cannot be done by a Thai). There are no fixed capital rules for obtaining a second foreign work permit within any given company. Applications will be judged individually on the basis of total capital investment and the absence of Thai's who could perform the same roles.
