Property in Thailand
Thailand has everything you want from a holiday paradise – golden sandy beaches, year-round warmth, exotic cuisine and culture, friendly people and a low cost of living. It’s also easy to get to from anywhere in the world and has close and friendly ties with the West.
Thailand was part of the “hippy trail” from the 1960s and a backpacker standby since the ‘80s. Don’t think it will be in any way grungy though; these days it has a superb tourist infrastructure and the kind of luxury villas we used to associate with sparkling colonial favourites like Singapore.
Thailand is an 11-hour flight from the UK, but being a similar distance from Australia and New Zealand too it’s a fascinating meeting place for the world’s tourists and adventurers, helping to attract globetrotters like David Beckham, Kimi Raikkonen and Damien Hirst. You don’t need a fortune to buy here, however, apartments in tourist areas of Thailand start at around TBH2million (£40,000 as of February 2016).
Thailand has the same population as the UK but in an area twice the size. The mainland sits in the IndoChinese peninsula between Laos, Cambodia and Burma. There are property buying locations here, notably Bangkok itself at the mouth of the Mekong River and the beach resort of Pattaya nearby, but also Chiang Mai further north near the border with Burma. Already a tourist hotspot, the north is likely to be boosted by Burma’s turn to democracy in 2016.
Most foreign property buyers head for the south though, to the Isthmus of Kra that curls around the Bay of Thailand and includes the island of Koh Samui. On the western side is the Andaman Sea, including the island of Phuket, where the celebs tend to buy their villas.
The British are the biggest buyers, though there are Australians too, and Scandinavians looking for an escape from those dark winters. You certainly know where you are with the weather in Thailand. In Phuket you have daily maximums of around 31-33ºC all year and it rarely dips below 20ºC. The rain, however, virtually non-existent from November to February falls as monsoons both in May and in September/October.
In Thailand foreigners cannot buy freehold property except through a company. Most buy a 30 year lease which is automatically renewable two more times, making 90 years. Like in any purchase, ensuring you have a specialist and independent property lawyer will iron out any problems or worries.
Where to Buy Property in Thailand
On the Thai mainland, Pattaya is one of Asia’s largest beach resorts and the second most visited city in Thailand (after Bangkok, 150 kilometres north). The typical buyer in Pattaya is changing; from single males, drawn by its nightlife, to more families.
In particular those younger visitors are visiting Jomtien, a few kilometres away, and wanting to experience Pattaya's floating markets and other cultural experiences.Houses in Pattaya range in value from 2 million baht to 50 million baht.
A typical house 15 minutes from the city centre would be 3 million baht, in a gated community with a communal swimming pool. Apartments run from less than 1 million baht all the way up to penthouses in excess of 80 million baht. You can buy a very nice apartment close to the beach from 1.2 million baht.
Meanwhile, on the other side of the Gulf of Thailand, 200 kilometres from Bangkok, is the country’s oldest beach resort, Hua Hin. Here, new residential and retail developments, as well as golf courses, are attracting an increasing number of buyers from Bangkok, as well as from Europe - and there’s now a sizable community of expat Brits.
Forty-five minutes south of Hua Hin is the quiet beach village of Kuiburi where you can find boutique developments with access to the beach, private infinity pool, Jacuzzi and rooftop terrace.
Before you follow Posh and Becks to Koh Samui, with its choice of five-star resorts, consider its little sister, Koh Phangan. Given that 70 per cent of Koh Phangan is protected by national park status, the island should always maintain its unspoilt charm.
On the west coast, idyllic properties with infinity pools can be found in Baan Tai for 15 million baht and at Bay Residence, you could take on a self-build villa project near the pretty bay of Haad Salad with plots starting at around £50,000.
James Bond fans might prefer a home on the island of Yao Noi in Phang Nga Bay, famous as the setting for villain Scaramanga’s hideaway in The Man with the Golden Gun.
With a larger budget, you could consider the natural eden of Yao Noi – 60 per cent of the island is covered in rainforest – where a one-bedroom villa will start at around £517,000; two- and three-bedroom options are available with prices reaching £800,000.
How to Buy Property in Thailand
Your solicitor will do most of the searches before you have to sign anything or pay any deposit - so ensure you take good legal advice if you're being asked to pay upfront. You will then pay a 10 per cent deposit. As with buying anywhere in the world, it is essential to use a trusted lawyer throughout the buying process - ensure the lawyer you use is completely independent and impartial.
The final contract is signed when all the legal documents are ready, and at the same time you pay all relevant fees and taxes, and the deeds are registered with the Land Department.
Buying Costs in Thailand
In general, buyers pay around two per cent transfer fees, one per cent legal fees and 0.5 per cent stamp duty. Buying through a Thai company means you have to pay business tax of 3.3 per cent and if buying land, a local development tax.
Buyers Need to Know
Under current Thai law foreigners are not allowed to purchase land freehold.
It is however, possible to purchase a straightforward 30-year leasehold contract. This is the most common method that land is purchased in Thailand and a method fully endorsed by the Thai authorities. You will receive a 30-year lease with two subsequent renewal options, each of 30 years.
A registered lease is easy to set up and there is no restriction on foreign participation. The standard Thailand residential lease is for 30 years and can be held in your own name. A lease registered with the Land Office remains in force during the term of each 30-year lease. After 30 years a new lease must be prepared and filed at the Land Office.
Alternatively, you may convert the title to freehold. When you renew the lease there are no further payments to be made aside from a minimal local tax (approximately 1.1 per cent of the lease’s value).
The only exception to this rule is if you have a large sum to invest - Thailand has already allowed investors investing 40 million baht to own up to one rai (1,600 sq. metres or 0.4 acres) of land in certain areas.