Bangkok Condo Ownership

Buying Property in Thailand for Foreigners : Bangkok Condo Ownership

According to Thai law, foreigners are not allowed to purchase land in Thailand in their own name. In some rare cases, there are exceptions but it is not common practice.

However, there are alternative options for foreigners who want to acquire land by setting up a Thai company or owning land under a leasehold structure with the developer/seller.

Even though foreigners cannot own the land under their own name, they can own the house on that plot of land for which they first need to apply a construction permit to build the house in their own name. This also helps to secure the long-term lease of the land.

Unlike landed house, foreigners can buy a condominium unit in Thailand, under either freehold or leasehold ownership.

The most frequent way for foreigners to own property in Thailand is by buying a freehold condominium unit where the law allows foreigners to own 49% of the total saleable area of each condominium project.

In the case where the foreign freehold ownership quota is reached in a condominium project, foreigners can instead buy a unit under leasehold status (depending on the policy of each project) or set up a Thai company of which the foreign ratio is less than or equal to 49%.

In terms of a leasehold condominium project, all foreigners can buy in their names with no limitation on the foreign ownership quota. The maximum lease allowed by Thai law is 30 years but some developers provide an option to renew for another more or less than 30 years.

Legal Ownership of Condominium

Freehold condominium is a multiple unit building where there is freehold ownership of individual units and a common interest sharing along with all the co-owners in the land and common areas of each project. The official document for freehold property is called "title deed", which clearly states the useable area, balcony, air conditioner, storage and exclusive right to use assigned parking (some condominiums) but excludes columns and common areas.

The co-owner has the right to vote during committee meetings to manage the building collectively as a "juristic person".

Foreigners who buy a freehold condominium unit in their own name must transfer the funds in any foreign currency from their overseas bank account into Thailand and with the specific purpose of "buying a condominium".

Leasehold condominium is a multiple unit residential building where the developer leases the land from a private landowner or owns the property and built the residential units to sublease to clients with a limitation on the lease period. The maximum lease allowed by Thai law is 30 years with an option to renew another more or less than 30 years. A co-owner in the building has no right to vote to manage the building. The developer will assign a team to manage the building. A good point for leasehold property is it has no limitation on foreign ownership quota. Meaning, foreigners do not need to transfer the funds from overseas. The official document provided from the Land Department is called a “sublease agreement".

Definition of Residential Building

Apartment is a multiple residential unit building which is owned by one single owner. The owner of the building will sublease to the tenants with a minimum of a one-year lease. The building owner will find a team to manage the building at their own cost. The tenant will only have to pay a utility bill, not a common fee.

Serviced apartment is a multiple residential unit building which is owned by one single owner. There is no limitation on the lease period. The tenant can lease units for a number of days, months or years. Contrary to apartments, serviced apartments come fully furnished and are equipped with bed linens, crockery and cutlery. They are similar to a hotel room, where you can move-in with just your suitcase and cleaning service is provided on a daily basis.

What is the Additional Cost for Owning a Property?

Common / management fee or common area management (CAM) fee is a fee kept for the maintenance and upkeep of the building that is part of costs for the common area, such as electricity, guard, facility, etc. The CAM fee can be paid monthly, quarterly or yearly depending on the policy of each juristic person. The fee will be calculated from a fixed rate of each unit, ratio of the ownership or sizing of the unit depending on each project. If any freehold condominium provides exclusive parking space which is stated in the title deed, the co-owners also need to pay the CAM fee for the parking area as well.

Sinking fund is the fund established for the upcoming expenses in the future that are needed to undertake major renovation or upgrade of the building, such as painting the building, maintaining the lifts or changing the water pipes. Every co-owner needs to pay this amount into the juristic person’s bank account as the first step when registering the transfer of ownership at the Land Department.

Building insurance fee depends on each project. In some buildings, this fee is included in the common fee, but other buildings have a policy to have this as an add-on payment. This fee only covers the common area, not inside of individual units. In case of fire, this insurance will only cover the common area, not inside of a co-owner’s unit.

Summary

1. A freehold condominium is registered at the local land department, and each individual condominium unit has its own title deed.
2. Foreigners are allowed to own up to forty nine percent (49%) of the saleable area of each compound.
3. The foreign ownership percentage of each condominium building is registered at the local land department and the juristic person of the building.
4. Purchasers of sold off-plan units need to clarify / confirm with the developer whether or not their particular condominium unit will be registered as part of the foreign quota.
5. Purchasers of units in existing condominium buildings should clarify with the seller whether or not the unit is part of the foreign quota; if not, the seller should then clarify whether there is foreign ownership quota still available (and if so, add the unit as part of the foreign quota).
6. All of the money used by a foreigner to purchase a condominium unit in Thailand must be remitted to the country as foreign currency from overseas.
7. Foreign purchasers need to obtain a "bank certificate" for each amount transferred from the beneficiary bank. All these certificates must be shown to the local land department to be able to register the condominium unit.
8. When the money is remitted to Thailand, the foreign purchaser needs to include in the transfer instructions that the purpose of said money is to “buy a condominium unit”.
9. A foreigner who has Thai baht in his non-resident bank account or who has a foreign currency bank account in Thailand may withdraw money from such account for the payment of the condominium unit. In this case, a withdrawal slip and bank certificate issued by the bank is needed confirming that the funds were withdrawn from those accounts to buy the condominium unit. These documents will be required to be shown at the local land department.
10. A foreigner who is married to a Thai national and intends to buy a condominium unit that will be jointly owned (with their Thai spouse) must comply with foreign ownership regulations and transfer all funds to purchase the condominium unit from overseas.
11. Foreigners who have obtained status as a Permanent Resident (PR) in Thailand do not need to transfer funds from overseas to buy a condominium unit.
12. The owner of a condominium unit will be named on the title deed of the said unit. The condominium title deed will clearly state / indicate the area which will include balcony(ies), area occupied by air conditioner unit(s) or storage room but will exclude columns and common areas. The condominium unit’s title deed will show the ratio of ownership of the common areas.

Carparks may be registered on the condominium unit’s title deed in a number of different ways as below:

1. There may be an exact size and location of the carpark space.
2. There may alternatively be a right to the exclusive use of a car parking space(s) without defining the area or location.

For other Bangkok Condo information.