A guide for foreign investors to buy a condominium in Thailand

Thailand, the Land of Smiles, is a country rich in culture and history. Seeking dazzling white sand, crystal-clear waters, islands, jungles, vibrant nightlife, and delicious street food, millions of people visit Thailand every year to experience a culture distinctly different from anything in the West.

Visitors come for a day and stay for a lifetime. Once they've experienced the Thai way of life, they're drawn back year after year. Thailand is easily accessible from almost anywhere in the world, and depending on your budget, a week's holiday here is cheaper than a week's holiday in many popular Western destinations.

Some see Thailand as the ideal place to settle permanently. Long-distance workers, families, young travelers, and retirees are returning to their home countries and moving here to enjoy this paradise long-term. For anyone planning a move or wanting to create a permanent holiday home, buying a condominium in Thailand is an attractive option. This article will show you how.

It's often said that buying property in Thailand is a difficult undertaking. While it may be more complicated for foreigners, much of the information circulating is based on misinformation. However, with thorough research and the support of a good lawyer and real estate agent, the purchase process will be straightforward.

Buying a condominium in Thailand is the easiest and safest way for foreigners to acquire real estate. Therefore, this guide focuses on this. We'll give you an overview of the different types of properties and legal ownership rights (titles) before discussing what to look out for and how the purchase process works. We emphasize the importance of legal advice and its necessity throughout the entire buying process.

By the end of this article, whether you are an experienced investor or buying your first condo in Thailand, you will understand how the market works and who can help you. You will enter the Thai real estate market with confidence.

Who can purchase a condominium in Thailand under foreign law?

Foreigners and legal entities considered foreign under the law can own a condominium if they meet the following conditions:

  • Foreigners are permitted to stay in the Kingdom according to immigration laws;
  • Foreigners are permitted to enter the Kingdom in accordance with the Investment Promotion Act;
  • Legal entities registered under Thai law;
  • Legal entities that have received a funding certificate under the Investment Promotion Act; and
  • Foreigners or legal persons are considered foreigners under the law if they have brought foreign currency into the Kingdom, withdrawn money from the Thai Baht account of a person who is resident outside the Kingdom, or withdrawn money from a foreign currency account.

    • The basic principle is: Anyone who enters Thailand with a valid immigration visa and has no criminal record in the country can purchase real estate there.

    The last point is particularly relevant for potential investors. Since you are a foreigner investing in Thailand, all capital for the property purchase must originate from abroad. It must be fully documented where the funds come from and how they will be used in Thailand. We will explain this in more detail during the purchase process.

    Legally owned property in Thailand

    In Thailand, foreigners have three options for acquiring property – Freehold, Leasehold, or Thai Limited Company.

    Property rights – Foreigners can acquire property rights in Thailand in their own name. The Thai Land Registry issues a title deed, similar to a declaration of division, and property rights can serve as security in Thailand.

    Condominiums are the only form of real estate that foreigners can acquire as full ownership. Therefore, they are a popular and easiest purchase option.

    Lease – A foreigner may own or be entitled to use a physical structure (a property), but the land on which it stands belongs to a Thai national or a Thai limited liability company.

    You can lease the property for up to 30 years, with the option to extend the lease to up to 90 years.

    The lease agreement is registered with the Thai Land Registry, and if the property is sold during the term, the new owner takes over the existing lease agreement.

    During the term of the lease agreement, you are responsible for the maintenance of the property and all buildings.

    Thai Limited Company – Land and buildings can be acquired through a Thai Limited Company.

    A foreigner can be a shareholder in the company, however, at least two Thai nationals must hold a majority (51%) of the shares. The company must operate a legitimate business in Thailand; otherwise, it cannot be registered.

    The company then leases the property as described above.

    It is important to consult with your real estate lawyer regarding the ownership situation. As part of the due diligence process, your lawyer will conduct research in the land registry to determine the type of title, verify its registration and legality, and ensure that there are no outstanding debts, mortgages, liens, or legal disputes against the property.

    Since Thai law stipulates that foreigners cannot own "land" in Thailand, condominiums are the easiest (and safest) form of real estate acquisition for foreigners.

    How do the different titles affect you?

    In cities like Chiang Mai and Bangkok, most condominiums are sold as freehold properties. However, since areas like Phuket, Pattaya, and Hua Hin are heavily touristed, many condominiums there are sold as leasehold properties. This is because many buyers in these areas are looking for an investment property with rental income.

    While you can purchase the apartment in your own name, many apartment complexes restrict the length of stay because they cater to tourists and manage the property as a vacation rental. Therefore, especially in tourist areas, it is essential to seek legal advice regarding ownership rights before purchasing.

    Why are you buying?

    No matter where in the world you're shopping, there are important questions you should ask yourself at the beginning. These questions will help you set realistic goals and budgets and stay on track throughout the buying process. The first question you should ask yourself when shopping in Thailand is: "Why am I doing this?"

    Long-term lifestyle

    If you're looking for a long-term lifestyle change for yourself and your family, you have significantly more options when choosing a location. You don't necessarily have to look in tourist hotspots. Many expats living in beach resorts like Phuket, Pattaya, and Hua Hin prefer residential areas outside the city.

    If you are looking for big city life, you could look at Bangkok, or if you want to escape to the mountains, Chiang Mai.

    All regions offer quiet residential areas that provide more space and comfort for those wishing to settle permanently. Here you will often experience a more authentic Thailand, with local markets, nature, and sights. In these towns and cities, you will have access to first-class educational, healthcare, and shopping facilities.

    Mixed investor

    If you're not quite ready for a complete lifestyle change, but would like to escape the daily grind and secure a potential additional income stream, you should consider condominiums from a different perspective. You should view a potential purchase not only as a place to live, but also as an attractive rental property.

    In heavily frequented tourist areas, people tend to look for small condominiums rather than larger apartments that they might want to rent long-term.

    Thailand is a promising travel destination. Travel has changed after the pandemic. While travel restrictions are being eased, weekend trips are a thing of the past. Many vacationers are planning longer stays, combining the allure of a foreign sea with the comforts of home.

    As a mixed investor, you can finance your holidays with rental income and at the same time prepare to live comfortably when you are ready to transition to "Thai life".

    Full-time investor

    As the global economy recovers, full-time investors may find themselves in a difficult position. Do you want to buy a condominium and resell it when it appreciates in value? Or are you hoping to profit from a tourism boom?

    Investors have significantly higher purchasing power as Thailand attempts to revive its real estate and development market through foreign investment, but they also need to rethink their investment strategies.

    Before the Covid-19 pandemic, many developers in tourist areas began integrating studios and one-bedroom apartments into their complexes, speculating on high revenues from short-term guests. A popular strategy for investors was to buy many small apartments to rent them out at high prices. This strategy proved short-sighted in early 2020 when the tourism industry collapsed.

    As an investor, you'll find many bargains in the smaller condominium segment due to the oversupply of newly completed developments. Some properties are offered at up to 25% below market value. These could prove to be a solid investment with the anticipated tourism boom. However, keep in mind that many visitors who plan to stay longer may require more space.

    Other important questions you should ask

    If you are an experienced real estate investor, you know that there are many steps from the thought "I want to buy a property" to the completion and handover.

    If you're looking to buy your first property, you'll need all the help you can get, especially in a foreign country like Thailand. Don't worry, there are experts who can make the process easier for you.

    Before investing in a property, it is important to ask some questions.

    "What type of property do I want to buy?"

    Your buying motives will influence the type of property you consider. We're focusing on condominiums here, but there are other property types—villas, townhouses, detached houses, and plots of land—that might better suit your needs. If you're interested in other property types, speak to your real estate lawyer.

    Do I want to buy a used condominium, a new condominium, or invest in a new construction project and buy off-plan?

    This is an important question to ask yourself when setting your budget and timeframe. Each of these options has advantages and disadvantages.

    Pre-owned condominiums offer a wide variety of choices and locations. Many of these apartments are in prime locations, are larger, and offer more space for outdoor areas, as they were built when land was more affordable.

    Older condominiums were built with long-term living comfort in mind. They are often more spacious and offer two- or three-bedroom options.

    Previously owned condominiums are managed by an established legal management team. This team enjoys an excellent reputation, and you can obtain feedback from existing owners.

    But even a used condominium can look outdated. It might need renovations or new furniture and appliances. It's worth checking things like plumbing, paintwork, the building's structure, and available services such as internet providers.

    Newer isn't always better, especially in busy tourist areas like Pattaya. Newer condominiums may offer less living space and not be in prime locations (depending on your needs). However, with infrastructure being modernized in many parts of Thailand, numerous new developments are now being built in top locations to capitalize on the booming trade.

    For young, single investors, couples, or short-term visitors, a smaller condominium may be ideal. It allows for a minimalist lifestyle while offering modern comforts with appliances, furniture, and amenities. Even small spaces can feel spacious if they are well-designed and furnished.

    You may also find lower prices due to the oversupply of condominiums in this segment.

    By law, property developers are responsible for all defects and necessary structural repairs within the first five years after completion. This offers you a certain degree of security when buying a property.

    Buying off-plan – Purchasing a property off-plan in a new construction project involves risks and advantages.

    For projects that are not yet realized, a longer payment plan is common, with the final installment only due upon completion. This gives buyers time to save and adjust their budget accordingly.

    Property developers seek investors for their projects and may therefore offer competitive purchase prices or guaranteed rental yields. However, since they are working with a limited budget, they may not be willing to negotiate the price.

    As property developers increasingly focus on long-term developments, buying a property off-plan could offer you the opportunity to enter the market early for an older (larger) condominium with state-of-the-art appliances and amenities.

    A frequently asked question is: "What happens if the project is not completed?"

    It is absolutely essential to seek legal advice before signing a purchase agreement for a new construction project. Your lawyer will ensure that all relevant conditions are met in case the developer (or you) cannot fulfill the contract.

    Another important point is the furnishings. New construction projects usually have a model apartment. However, not all apartments are furnished and equipped with household appliances. Therefore, be sure to clarify whether the furnishings are included in the contract price or whether there are additional costs.

    "What is my budget?"

    Only a few Thai banks offer real estate financing to foreigners. As a foreign investor, you will therefore need equity capital, either from savings or the value of your property in your home country.

    With so many options available, it's easy to have big dreams and overextend yourself. You should set a realistic budget that you can stick to. Your budget plays a crucial role in deciding where to live in Thailand.

    "Do I need the help of a real estate agent and a real estate lawyer?"

    Yes! Regardless of your experience, remember that you are buying a property in a country with different laws, regulations, and cultures.

    In fact, we will introduce these service providers in more detail before we delve into the purchasing process and legal aspects. Regardless of the complexity of the topic, once you understand how a real estate agent and a lawyer can assist you, you will enter the Thai condominium market with confidence.

    Your real estate agent

    In Thai culture, reputation and saving face play a vital role. A real estate agent will open many doors for you and act as a language and cultural mediator.

    A competent real estate agent knows the best existing properties and upcoming construction projects that meet your needs. They have a diverse network in the region.

    A reputable real estate agent works in the best interests of both you and the seller.

    An efficient agent saves you time and money.

    They review the objects you have researched, ask the right questions, and either remove objects or offer unlisted alternatives.

    Your real estate agent will arrange viewing appointments and transport options and can provide you with information about the history of the buildings, developers, managers and areas.

    They translate for the sellers to help with negotiating prices and terms of sale.

    Real estate agents in every region understand the difference between buyers looking in a tourist market and those seeking a specific lifestyle. They are worth their weight in gold.

    Your real estate lawyer (lawyer specializing in real estate law)

    If your real estate agent is worth their weight in silver, then your real estate lawyer is worth their weight in gold.

    A trustworthy real estate lawyer saves you time, avoids frustration, and helps you avoid potential financial losses or legal disputes. He is the expert.

    What does your lawyer do?

    During the purchasing process, they will:

  • Conduct due diligence. This includes researching the background and history of the sellers, the development companies, the buildings, and any potential legal complications related to the points mentioned above.
  • Ownership searches are conducted. This includes confirming that the ownership details match the data recorded in the land registry; that the seller is the legal owner of the property and authorized to sell it. It is also checked whether there are any existing mortgages, liens, debts, or pending legal proceedings against the property.
  • Carefully review purchase agreements to ensure all details are accurate and fair for both buyer and seller. Unlike in Western countries, Thai contracts often focus less on specific figures and more on the relationship between buyer and seller. It could be described as a gentleman's agreement or handshake deal. Unfortunately, this means that important terms or clauses may be missing. Your real estate lawyer will translate the contracts and advise you on key clauses to include for your protection. Contract review is essential when buying condominiums, especially in tourist areas like Pattaya or Phuket.
  • Coordination of money transfer and payment. In any real estate transaction, money is the most important aspect. We will explain this in more detail later, but your lawyer will confirm the amounts due (including land registry fees, late payment clauses, and charges), which party bears the costs, and how the payments will be made (payment schedule). Your lawyer will ensure that all payments and deadlines are fair for both parties and will review any hidden or ongoing costs with you.
  • Accompany your lawyer to the property transfer and registration at the Land Registry. Your lawyer will receive and hand over all relevant documents during the transfer. They can then act as your contact person at the Thai Land Registry to register all documents and pay fees and taxes according to your contract.
  • Protect your assets. A trusted law firm can help you plan for the future. What happens in the worst-case scenario of your death? We often create a will in our home country to ensure our estate is secure upon our death. In Thailand, foreign wills are not recognized and can be contested in court. Thai lawyers can help you create a will that is valid in Thailand. Although this is not part of the purchase process, it is an important aspect that is often overlooked when we think about protecting our assets and providing for our spouse or loved ones.

    • You have now asked yourself some important questions and gained a better understanding of how your real estate lawyer and your real estate agent can help you.

    Let's take a look at the purchasing and legal process involved in acquiring your new dream condominium.

    What is a condominium?

    A condominium complex is a building with both private and communal ownership. The owners of a condominium complex own the property through a legal entity, the owners' association. (The Condominium Ownership Act – the Act on Jointly Owned Residential Property of 2522).

    Simply put, a condominium is a residential unit within a larger building complex. The owner has full ownership of the unit and a share of the common areas. Foreigners can buy and sell condominiums in their own name.

    Under Thai law, foreigners are only permitted to own 49% of apartments in residential complexes. Your lawyer will verify this as part of their due diligence, as you certainly don't want to discover only after a settlement that your chosen apartment doesn't meet the foreign ownership quota.

    A residential complex has a legal entity (an individual or a management team) that handles the day-to-day operations. This includes managing fees and taxes, communicating with authorities, and organizing staff salaries and maintenance. A good manager will also handle the preparation and registration of rental agreements with the immigration authorities if you rent out your apartment.

    The owners of condominiums become part of the complex's management. They participate in owners' meetings to decide on fees, maintenance, and the house rules. Each complex has a nine-member board of directors, whose members are elected. Many foreign investors entrust the condominium manager with handling these matters.

    Apartment owners are required to pay ongoing fees. Each apartment complex charges a fee for common area management (CAM) and pays into a maintenance fund.

    These fees are payable by all owners within a complex and are set by the relevant management unit (to which you belong) or legal entity. The fee is calculated as a base amount multiplied by the square footage of your property. The base amount can be adjusted to current needs by a majority vote.

    The CAM fees cover the repair and maintenance of communal areas, the salaries of on-site staff, and ongoing government fees.

    The maintenance fund is a pool of money held as a reserve for major repairs or modernizations, e.g. for the renewal of paving, the rectification of structural damage or the handling of environmental emergencies.

    Although often overlooked and sometimes dismissed as unimportant, you should definitely read the house rules and regulations of your condominium complex. While it may not be exciting reading, the fine print can significantly influence your purchasing decision.

    Rules and regulations or statutes of the residential complex

    Obtain a copy of the homeowners' association's house rules before purchasing. According to the Condominium Act, these should contain at least the following:

  • Name of the legal entity of the condominium owners' association;
  • The amount of the repayment fund to be paid by the owner;
  • How the shared and individual characteristics would be used;
  • The ratio of individual units to space requirements;
  • The rules of procedure for the General Assembly;
  • The ratio of maintenance costs;
  • Procedures for managers and their appointment.
  • Age restrictions for children who are allowed to use the swimming pool or other facilities;
  • Restrictions on parking vehicles or boats;
  • Restrictions regarding the type of floor coverings, curtains or window decorations, privacy screens or the enclosure of open balconies;
  • Restrictions on the use of leisure facilities in the common areas;
  • Noise and sound restrictions.

    • There are other aspects a buyer should consider when thinking about their expectations and lifestyle. Some rules can be so restrictive that one wouldn't have bought the apartment if they had read the house rules beforehand.

    These documents are often not translated from Thai. Therefore, consult your real estate lawyer to gain a better understanding of what you are getting into.

    Making the dream of homeownership a reality – the purchase and legal process

    Do your homework

    The internet offers a wealth of information. Your research will reveal areas, price ranges, developers, and points of interest. This will give you an overview of the current market offerings.

    Keyword searches (place names, nature, markets, transport, education, nightlife, gastronomy) help to discover areas that offer what you are looking for.

    Think back to the questions you asked at the beginning. Your answers will help narrow down your search queries and keep them realistic.

    If you value details, take a look at the glossary of real estate terms and the FAQs on real estate when you begin your search for properties in Thailand.

    You may also want to find out about potential pitfalls in the real estate market in Thailand before you begin your search.

    Find your real estate agent

    Once you have a list of potential objects, you should secure the help of an initial expert.

    Your real estate agent will review your research, make suggestions, organize viewings and transport, and provide you with information on the history of the buildings, developers, managers, and areas.

    They translate for the sellers to help with negotiating prices and terms of sale.

    Once you've been helped to find your piece of paradise and you're ready to sign a contract... DO NOT sign the contract!

    It's time to find your second expert.

    Your real estate lawyer

    From what has been said above, you have a good overview of what your lawyer will do for you.

    As experts in Thai law, they will now conduct due diligence and property research. They will review your contract and add, amend, or remove relevant terms or clauses.

    Your lawyer will confirm the payment plans, participate in the transfer of ownership, and register your new title to the property with the relevant Thai land registry office.

    A contract review is of utmost priority if you want to buy a property off-plan.

    Pay your deposit and sign the contract.

    The deposit is usually due before the contract is signed. It is considered a sign of goodwill, and many sellers will only take a property off the market once the deposit has been received.

    Before you pay any money, please note that as a foreign investor you must provide proof that your purchase funds originate from abroad.

    All funds must be in foreign currency and have clear proof of the origin of the funds (withdrawal from the originating bank), the purpose of the funds (purchase of a condominium) and proof of currency conversion in the recipient's Thai bank account (foreign exchange form).

    Once you have made your deposit and your lawyer has confirmed the contract details, you sign the contract.

    Your contract lists the amounts and deadlines for all payments. This includes the deposit, the remaining balance, any applicable government fees and taxes, and the respective payers.

    A summary of your payment plan.

  • Down payment: A down payment is due before the contract is signed. This amounts to 10–15% of the purchase price, but in exceptional cases can be up to 25%.
  • Remaining balance: The remaining balance of the purchase price is due at the time of invoicing, unless otherwise agreed in the payment plan.

    • When buying a property off-plan, the payment schedule may differ, with several payments due at specific construction phases.

  • Government fees: Government fees are payable when registering documents with the Thai Land Registry. The fees depend on the value of the property.

    • When calculating government fees and taxes, a property is assigned three different values:

  • Registered value (purchase price registered with the land registry).
  • Standard value (property value determined by the land registry office).
  • Market value (often determined by property prices and current market trends).

    • Transfer fee: 2% of the registered value of the property.

    Stamp duty: 0.5% of the registered value. Only payable if exempt from trade tax.

    Withholding tax: 1% of the market value or the registered sales value of the property (whichever is higher if the seller is a company). If the seller is a private individual, the withholding tax is calculated progressively based on the market value of the property.

    Business tax*: 3.3% of the market value or the registered sales value of the property (whichever is higher). This applies to both private individuals and companies.

    * This tax is payable if the property has been owned by the owner for less than 5 years, which is often the case with new construction projects.

    For condominiums, the fees for Common Area Management (CAM) and a maintenance fund are listed.

    settlement

    Your lawyer will represent you during the property transfer. The final documents will be signed, the funds disbursed, and the keys handed over.

    Before a purchase agreement can be finalized for an unfinished house, Thai authorities and environmental organizations conduct an inspection before issuing the new title deed. You should never buy a house until the title deed is complete or the house is in the process of being finished.

    Registration of ownership

    After the transfer of ownership, all documents must be registered with the relevant Thai land registry office. Your lawyer will handle the registration and payment of all associated fees.

    Who pays which fees?

    Payment and financing

    When buying a condominium in Thailand, you will need equity capital, as Thai banks do not grant real estate loans to foreigners. However, it is possible to mortgage the property and finance the purchase.

    Currently, two banks, Bangkok Bank and United Overseas Bank (UOB), offer mortgage loans to foreigners. These mortgage loans are arranged "offshore" at their branch in Singapore.

    The real estate loans they grant to foreigners are based on foreign currencies. Your real estate loan or mortgage will be issued in either Japanese yen, euros, or US dollars. Interest rates vary depending on the currency.

    You can read more about mortgage guarantees for foreigners in Thailand.

    A complete overview of the market in 2023

    Thailand is a diverse country, and market research in different regions yields a wide range of results.

    Regions like Phuket, Pattaya, and Koh Samui were hit hardest by the collapse of tourism in 2020 and 2021. This led to a glut of new condominiums, a slump in market prices, and significant uncertainty regarding rental yields. However, as tourism is recovering, investors seeking long-term investment opportunities should consider these areas.

    Bangkok remained stable during this period. While property sales declined, they are recovering as more and more people consider a long-term move to Thailand's metropolis. The forecast for 2023 anticipates market, price, and rent stability, along with a slow increase in property values.

    Although Hua Hin attracts many tourists, it is especially popular with long-term residents and retirees. For those who want to live on the beach long-term, there are affordable buying opportunities here.

    The northern region of Chiang Mai suffered economically from the decline in tourism, but managed to maintain a strong expat community. Many foreign buyers move to Chiang Mai because of its lifestyle and retirement, so daily life there has hardly changed.

    For a more detailed analysis of specific areas, see:

    In general, the market for unfinished properties offers significant potential. Many companies that postponed new projects in 2020 and 2021 are now resuming construction. This can present attractive buying opportunities for investors with sufficient time, as developers are actively seeking foreign investors and offering either lower prices or higher guaranteed rental yields.

    The outlook for Thailand is positive, as travel restrictions are being eased and the pilot projects from Phuket are gradually being rolled out nationwide. It will become easier to return to your beloved country, and after the devastating impact of Covid over the past two years, it's wise to consider long-term options.

    A summary of your purchasing process

    There is a lot of information above. Given the many options, here is a simple overview of how to proceed.

  • Ask yourself questions about what you want.
  • Conduct your own research.
  • Pay attention to the areas and possible future developments.
  • Hire a good real estate agent.
  • View potential properties.
  • Be sure to seek legal advice before signing any contracts.
  • Read the regulations and statutes!
  • Pay a deposit and sign your contract.
  • Register your property with legal assistance at the local land registry office.
  • Enjoy your new condominium and live a happy life!

    • Real estate lawyers | Lawyers specializing in property law

    If you want to buy your dream property in Thailand, sound legal advice is essential. A qualified real estate lawyer familiar with Thai law will advise and support you throughout the entire purchase process and take care of all the formalities.

    Siam Legal is a registered law firm with over 17 years of experience in real estate law. The team maintains offices in the major metropolitan areas of Bangkok, Chiang Mai, Pattaya, and Phuket and is intimately familiar with the specific conditions in each location.

    You can contact the Siam Legal office at the following address:

    Address: Two Pacific Place Building, 18th Floor, Unit 1806, 142 Sukhumvit Road, Klongtoey, Bangkok 10110, Thailand. Phone: +66 2 254 8900 Mobile: +66 84 021 9800 Website: www.siam-legal.com Opening Hours: 9:00 AM – 6:00 PM