1. Financial Transfer Procedures for Foreign Buyers of Condos
Under the 1991 Condominium Act, non-residents who purchase condominium units must transfer the funds to pay for the unit from overseas, with the money being transferred to Thailand as foreign currency (FX). Purchasers need to obtain a Foreign Exchange Transaction Form or a bank certificate for each payment from the beneficiary bank, and all these certificates must be presented to the Land Department in order to register the condominium.
Neither company nor Individuals who invest in property in Thailand are often aware of the tax liabilities that may arise in either buying or selling property.
Foreigners typically invest in real estate either by purchasing a condominium unit which they hold in their own name, company name, or by taking out a lease on a property.
A tax analysis by Mazars, one of Thailand’s leading international accounting, auditing, and taxation advisory firms, shows that a purchaser, either as an individual or under any other legal structure, will always be subject to Thailand taxes on the sale of a property in Thailand.
3. Property Transaction Costs and Ongoing Expenses for Houses and Condominiums
- Transfer Fee:
This is normally a 2% fee based on the assessed value of a freehold property, this fee shall be shared equally by the seller and the buyer. However, in some re-sale transactions, either the seller or buyer can be solely responsible, depending on what has been agreed upon between the parties.
- Sinking Fund:
For a new condominium project, the buyer pays a one-off lump sum upon transfer of the property from the developer to the buyer. Currently, the rate of the sinking fund is between Baht 400 - 1,500 per sqm. This fund is to be used for major renovations and replacement of equipment when necessary, to ensure the maintenance of the building, and ultimately, its value in the future. If there is a need to withdraw money from the fund for renovation, the owner of the unit may replenish the amount withdrawn to maintain the balance of the sinking fund for use in the future.
- Utility Meter Deposit and Installment Fee:
There is a payment required for the initial registration of the electricity and/or water meters in new residential properties. There is likewise a requirement for the transfer of the said registration of electricity and/or water meters for re-sale properties. In some resale cases, the seller may request the purchaser to reimburse the cost of the deposit of the electric meter and/or water meter. The deposit of the electric meter fee is dependent on the capacity of the electric meter.
- Lawyers’ Fees:
Each party shall bear its own legal fees.
- Common Area Management (CAM) Fee:
These fees are paid by owners for the upkeep of the common areas of condominiums and housing projects. For new residential developments, it is common to pay up to 1-3 years’ management fees in advance upon the transfer of the unit’s ownership. The common area management fee rate in the market now ranges from Baht 30 -150 per sqm. per month.
4. Visas for Foreigners
There are different types of visas for foreigners entering Thailand, including tourist visas, work visas and retirement visas.
For more information, please check the websites of the Ministry of Foreign Affairs and the Thai Government’s Department of Immigration.
Financing for foreigners to purchase real estate in Thailand is complex and changes regularly. We recommend that you check with your bank to get the latest details.
For other Bangkok Condo information