Buying or selling a property in Thailand is done by signing a standard sale and purchase contract. This must comply with the land code laws, including the Condominium Act. The sale and purchase contract must also be notarized in your home country. If the property is purchased through an offshore company, documents such as company incorporation documents, shareholder lists, and director ID’s must be translated into Thai and notarized at the Thai Embassy Consulate.
Buying or selling a property in Thailand involves paying transfer fees to the Land Department. These fees vary depending on the type of property being purchased. These fees are usually divided between the seller and the buyer. The seller will have to bring the original title deed of the property and a cashier cheque for the transfer fees.
Aside from the transfer fees, a withholding tax must also be paid by the seller. This tax is 1% of the sale price and is paid in order to prevent a buyer from undercutting the seller in order to avoid paying more transfer fees. The withholding tax is calculated on the highest amount declared, so if the property is being sold to a child, the taxes will be different than if it is being sold to another adult. In some cases, the buyer will be required to pay a special business tax. This tax is only payable if the apartment is sold within 5 years of acquisition.
Before the transfer of ownership takes place, a reference letter from the bank must be obtained from the developer. This letter must specify the details of the condominium and the name of the buyer. It must be signed by the banker in Thai language. The buyer can also request to keep these documents. In case the purchaser does not wish to keep the documents, the developer will keep them until the transfer of ownership takes place.
A foreigner can buy a condominium in Thailand under their own name, or a mixed Thai and foreign ownership company. This is a time tested system that has been in place for years. However, foreign ownership of condominiums in Thailand can cause problems, such as infringement of the foreigner quota. Typically, 49% of condominiums in Thailand must be owned by Thai citizens.
As a foreigner, you may have to pay a fee for the writing of the contract and for the control of the deed of the property. These fees can range from 30,000 to 100 000 Thai baht. If the property is being purchased through an offshore company, the fees may also be higher, because the company will need to be translated into Thai language.
To transfer ownership of a condominium, you will also need to pay a fee to the Land Department. These fees are usually around 2% of the appraised value of the property. The fee is normally shared between the buyer and the seller, though it is not uncommon for the buyer to pay the fee.