| INFORMATION
Guide To Buying.
For many homeownership is amongst the largest single investments
you will most likely make during your life and it's in your best
interest to be educated about the process involved. Many of you
will no doubt have bought and sold many times in your home country
but the rules are often somewhat different in Thailand. Buying a
property regardless of value can often be a daunting task, but if
you approach it in the right manner it can be a hassle-free
process. We have listed below a number of points to be considered
that we hope will help you proceed in confidence. In all
instances, Paragon Properties are here to assist you every step of
the way, so if there's something you are not sure about - always
feel free to ask.
Firstly let us consider the basic steps involved in buying your
property;
1. Things to consider yourself
- What type of property you are looking for (Condo, bungalow
etc)
- Which area you would like to live? If you don't have a lot
of local knowledge yourself, contact Paragon Properties who will
advise on the pros and cons of certain areas.
- Advise Paragon Properties on your basic requirements (no.
bedrooms / swimming pool etc)
- What's your budget? With vastly differing prices for
properties it's best to establish an upper limit of what you're
prepared to spend. In all cases, Paragon Properties will always
look to find the best deals possible with our resources
available.
2. Searching & buying
- Paragon Properties will assist you with the search for your
new home, usually providing you with a short-list of properties
that meet your criteria for you to visit along with our
knowledgeable staff.
- Upon finding a suitable property, advise your intention to
place an offer / purchase.
- Upon offer being accepted, submit a deposit, usually
10%
- A Property Purchase Agreement is then signed
- Balance of property value transferred (see further notes
regarding transferring funds).
- Contact the utility companies, water, electric, telephone.
- Final inspection (check inventory)
- Move in & crack open a cold one!
Okay, so this is the basic outline of the buying process, but
we should consider some of the things that can go awry along the
way. As we said before, buying a property can be a daunting task
for those who have not bought in Thailand before and should be
approached in the right manner. Let's run through some of these
points in a little more detail …….
Neighbourhood
Once you locate a home that appears to fit the bill, arrange a
second viewing, perhaps on a different day/time to get another
perspective. Heavy traffic blaring into your peace and quiet at
rush hour can be a nightmare. Conversely, if you have been used to
city living, will you be able to appreciate just how quiet it can
get in places? Some areas have not yet been developed to the
extent where street lighting is none existent, so if you are
living alone will you be able to handle the darkness?
As anywhere else in the world, crime exists in Pattaya. Although
it is not as prominent amongst the 'foreign' community from what
we are led to understand from local TV and newspapers, so would
you prefer to have your home on a secure village with 24 hour
security? Take your time to look around the village or area and
see who you will be living next door to: If there are groups of
guys hanging around drinking rocket fuel-like whiskey, then it may
be wise to look elsewhere! Paragon Properties will gladly give you
the benefit of our experience and knowledge of the areas in and
around Pattaya.
Price
Without the aid and assistance of a local real estate agent,
buyers can often pay far more than fair market value. It is not
uncommon to hear horror stories where huge amounts of money were
wasted because the market was unknown. Market areas differ - what
you sold your last home for does not necessarily equate to equal
pricing structures in your new neighbourhood, especially in
Thailand. Paragon Properties will offer comparative properties and
prices so that you have peace of mind that you are not paying over
market value.
Buying outside of your Budget
Careful budgeting is a basic necessity. First time purchasers be
warned that it is very easy to buy beyond your means. It is better
to buy the home you need and can comfortably afford than
experience being forced to sell and buy down. On the opposite end
of the scale is purchasing a home that offers less function and
feature than what you really need. Inevitably, you will end up
purchasing the right home and have to bear the cost of reselling
and moving again.
Condo/Apartment Living
Condos in Thailand suit a variety of ages, whereas typically in
the USA they are seen as 'retirement' homes. Generally speaking
condos offer a great alternative to owning a home, where security
and upkeep/maintenance of the gardens may be a concern for those
who don't live here all year round. A condo can simply be locked
up for the year and be ready for when you come back next time on
holiday. For those of you who are retired from the workplace and
are beginning to contemplate a smaller residence, a condo can be
ideal - no more high maintenance yard work or too many rooms to
clean.
Determine your needs realistically:
- What are the maintenance charges and are they annually or
monthly
- Are the local amenities close by (Laundry service, newsagent
etc)?
- Is the Clubhouse open to family members, especially
children, on holiday?
- Do the building rules forbid small pets?
- Are you in the same age bracket as the current residents?
- Is it a family-oriented building, or singles only?
- What are the noise restrictions?
- Can hanging baskets and lawn chairs decorate your balcony?
- Can you BBQ in your balcony?
- Is there adequate parking? Is covered parking
available?
- Is the personal and building security systems to your
liking?
- Are the communal hallways maintained & cleaned to a
suitable standard?
These are just a few of the questions that you may want to ask
whilst you are considering buying a condo. Other questions to ask
can be related to the actual ownership of the condo, i.e. can it
be in your own name or is it owned in a Thai Ltd company name?
Either way these points would usually be answered by our staff.
Maintenance
The thought of your own swimming pool, the manicured lawns, or the
beautiful Tropical garden in full bloom is an idyllic one at that.
It's lovely to look at, but do you want to spend the time required
to keep everything in top working order? Do you have the funds
required to hire a full-time gardener / handyman? In some cases,
you may be better suited for townhouse or condo living where yard
maintenance is part of the contract, and the village offers a
communal swimming pool and exercise facilities.
Establishing Ownership & Title Searches
Protect your investment by asking for advice - avoid potential
difficulties by having a title search performed as early as
possible, establishing who owns the property, right of ways,
builder's liens, leases, an undisclosed co-owner etc. Paragon
Properties can conduct these searches on your behalf to give you
peace of mind. Alternatively you can employ the services of a
lawyer here in Pattaya and request that they include this in their
remit.
Property Surveys
You should where necessary choose to carry out a survey of the
property and make observations on the following;
- Is the neighbour's boundary fence where is should be?
- Is the home too close to the property line?
- Is there room for the addition you are planning?
- Are any regulations violated?
Structural Defects
If the property you are looking at is one of the older ones,
perhaps you should consider an independent home inspection.
Careful examination by a professional will remove all doubts! Is
that tiny crack in the foundation a repair nightmare or merely
settlement? Are the walls infected with termites? Does your budget
have room for a fortune in reconstruction costs? For a few
thousand Baht you can obtain an extensive inspection report that
will point you to any structural defects in the building.
Ascertain the cost of repairs prior to entering into a binding
contract.
Vendor Errors
It is not uncommon to find that repairs have not been made, or
other contractual obligations may delay settlement. Plan a
walk-through of the property, contract in hand, and check off each
item before paying the balance or final settlement.
3. Acceptance of Offer - The Next Stage
Upon acceptance of your offer, the property will be withdrawn from
the market and will no longer feature in our window display etc
because you have agreed in principle to buy the property.
We would then request from you a deposit, usually 10% of the sale
value. This can be paid by bank transfer, cash, credit card (Visa
or Mastercard) or cashier cheque. The balance would then usually
follow within 1 month of the deposit being made, but the timescale
is usually agreed between the buyer and vendor (see note below
regarding transferring funds from outside Thailand). Usually in
any sale, we would prepare for you a 'Property Purchase Agreement'
on receipt of the deposit for both the buyer and the vendor to
sign. The agreement would contain details such as the name,
address, passport details of the vendor and buyer, the property
address, title deed reference number or plot details, the agreed
sale price, deposit amount, balance and completion date.
There will also be terms and conditions referenced which are there
to protect both the buyer and vendor should things not be able to
complete. It is generally accepted that you can withdraw from the
sale at any time without penalty up to the point where a deposit
has to be paid and the contract has been signed. Thereafter if you
decide to withdraw, then you would usually forfeit the deposit
amount.
Similarly, if the sale cannot go ahead for reasons such as the
information being incorrect as supplied by the vendor, then the
vendor would usually be bound to reimburse the deposit amount plus
a further amount as compensation to the buyer.
Please note that you and your lawyer are responsible for checking
the details of the Purchase Agreement as well as the title deed 'Chanot'
itself which would ensure that it's 'all above board' and the
property & land belong to the vendor. If you do not have legal
representation here in Pattaya, Paragon Properties lawyer can
conduct title searches etc on your behalf. Once the Property
Purchase Agreement have been signed and exchanged, both the vendor
and the buyer are committed. Any withdrawal from either party will
incur financial penalties as described previously.
Unexpected Costs
You should be aware of all costs associated with buying your
property and yet to some it is not unusual to reach settlement
stage only to find that 'hidden' expenses have occurred. It is
important that you understand the buying process here in Thailand
and can ensure that you are prepared financially for the payment
of transfer fees, property tax, company formation etc. Paragon
Properties will of course be pleased to assist with all of the
above and will ensure that you are fully informed.
Transferring Funds & Tor Tor 3
This is an important point to note and one which is often
overlooked by the buyers here in Thailand. Having paid the initial
10% deposit for the property invariably you will need to transfer
the remaining balance from your home country into Thailand. When
doing so, you should take care to transfer the monies in your own
currency ie from the UK send the balance of the payment in GBP
Sterling. Also, make it known to the bank that the purpose of
transferring such an amount is for buying property. By
transferring in your own currency you will often gain a better
exchange but more importantly it will make it easier for the bank
to grant what is known here as a Tor Tor Sam, or Tor Tor 3. This
is a bank certificate that is required whenever a transaction in
excess of 20,000 USD takes place. The bank will often not release
the funds or allow the transfer of the property to take place
without this single piece of paper!
Guide To Renting.
If you decide to rent rather than buy a property, then you should
first consider some important factors before you even begin to
look. It seems like common sense to determine what type of
property you want to live in, the area you wish to live and how
much you can afford but yet many people simply don't know what
they want! It is also a worth noting that the majority of
landlords here are looking for long term rental of their
properties and will often give a better deal to someone wishing to
rent say for 12 months rather than 3 months. Some Landlords will
not even consider letting their properties for periods less than 6
months so it pays to ask the question on each property. To give
you a head start please ask yourself the following questions.
1. Your budget - how much can you comfortably afford to spend?
You will need to work out how much you can comfortably afford, so
please take time to jot down your predicted monthly expenditure
(and income if applicable) taking into account the following;
- Security Deposit (usually 2 months rent)
- Monthly rental charge *
- Utility charges (including connection of water, electricity,
telephone, cable TV)
- Furnishings
- Kitchen utensils, e.g. cutlery, crockery, cooking pans and
etc
- Linen, e.g. bed sheets & towels
* Rental charges are usually paid in advance. The security deposit
is returnable to you at the end of the rental period, usually
following an inspection of the property by the vendor. Any sums to
cover breakages or damage will be deducted from this amount.
** The majority of rental properties come fully furnished as you
would expect, but none the less you should always factor these
into your sums. There are an abundance of shops selling
appliances, home furnishings and prices are usually cheaper than
those of your home country.
2. Property Type - What is best for you?
There are many different types of rental housing to consider,
including bungalows, two storey houses (detached), townhouses,
condominiums (studios, 1 to 3 bedrooms), long stay hotels or
serviced apartments and commercial shop-houses.
3. Location - Where do you want/need to be?
In real estate parlance, location determines price and price
determines location. This remains true. Your budget will influence
where you choose to live. After you have calculated what you can
comfortably afford to spend, come and take a look at what rental
properties we currently have available. From these, try and
identify which are in the areas you would most like to stay.
Finding a location that suits your needs is probably just as
important. In a place like Pattaya a lot of people are influenced
by the entertainment venues, restaurants and bars. It's often the
case that after a few months when the novelty has worn off some
people may wish that they had chosen somewhere a little more
sedate. Perhaps you are relocating here for work requirements, in
which case you may wish to consider somewhere a little quieter
away from the noise or somewhere with good road transport links.
Here are just some examples of the determining factors;
- Where will your place of work be? Do you need to be
close-by?
- Do you know people here already? Do you need to be
close to them?
- Are you a big water-sports enthusiast, would you
prefer to be close to beach?
- Are you a night-owl? Would you like to be close to
entertainment venues?
- Is shopping a big factor in your life
- Are you a golfer? Do you need to be close to a golf
course?
- Are you coming here to teach English? Do you need to
be close to Schools?
- Are you here for a quiet life? Would you prefer a
quiet area?
Determine what is important for you. It may be that there are
several areas that may serve your purpose in which case you should
take a look at properties there before making a decision. In all
cases Paragon Properties will gladly give you the benefit of our
experience and advise you on all areas
Guide To Selling.
Having decided to sell your property, you should let us know about
it so that we can begin the process. You can call us, e-mail us or
simply walk into one of our branches for an initial chat. Here is
a brief outline of what will happen when you decide to sell your
property with us.
Getting things started
We will explain to you the process of selling from start to
completion explaining the legal requirements along the way. We
will explain to you the process involved with contracts and
transference of ownership title and what is needed from you the
seller. Paragon Properties will provide you with comparative
property pricing data that will allow you to price your home to
sell. Whilst doing so, we will offer suggestions on presentation
of your property, recommendations as to carrying out minor repairs
- all with the aim of making selling easier. Paragon staff will
arrange to visit your home and carry out a professional listing of
your property, detailing sizes, key features including colour
photographs of both internal and external aspects.
The Marketing or 'Selling' Part
Your property will be entered into our 'property for sale'
database, which is fully searchable by potential buyers via the
internet. It will display the key features of your property
including the colour photographs. In addition, the property will
be displayed in our offices and will be made available to all
potential buyers that call in. Our monthly newsletter and website
carries the option of having your property to be 'featured
property of the month' maximizing the exposure and increasing the
chances of selling. Your property will also be advertised within
the major local publications that feature property. All
throughout, Paragon Properties will maintain the highest possible
standards when advertising and marketing your property. We will
arrange viewings for all prospective buyers so that they can
appreciate your property first hand. Any feedback that they give
to us, positive or negative, we will pass onto you - allowing us
to re-evaluate any aspects of the sale where necessary.
The Actual Sale Part
Having found a buyer we will request from them a 10% deposit, or
at the very least a "holding" deposit. If during the sale you have
agreed to include certain items with the property (ie any fixtures
& fittings) we will co-ordinate with you and assist by drawing up
any 'inventory agreements'. Similarly, if during the sale you have
agreed to carry out any work / minor repairs / final cleaning etc,
then Paragon Properties will arrange suitable contractors on your
instruction to attend. A Purchase contract will be drawn for both
buyer and seller and money exchanged via bank transfer.
Selling Tips.
Generally speaking, moving home for most people can be a stressful
time, particularly when you are faced with the task of selling
your property. Even if it is not your first time you find yourself
in that situation, things can still go wrong. There are however a
number of easy steps that you could take to boost the chances of
successfully selling your property. We have listed some of the
most frequently raised points by those wishing to sell and hope
that you find these useful.
1. Price: What value I should sell my property for?
Price is usually the first thing that people would think about
when it comes to selling and is largely dependant upon the
prevailing state of the market wherever you may be. It is
extremely important to get this element right. Failure to do so
could result in simply not attracting any potential customers.
Paragon Properties advise clients of the current market trends and
will offer comparisons with similar properties in similar
locations that have been sold in the previous days and weeks. This
will ensure that the property is not over-priced and conversely,
under-priced - both of which could deter potential buyers. Please
note that whilst we will make suggestions it is always up to you,
our client, who will make the decisions.
The key factors that will influence your property's value are as
follows;
- Type of property
- Location (sorry but it's true: location, location,
location!)
- View (an unspoiled sea view for example will command a
higher price)
- Size (both internal and external for houses), Living area
etc
- Condition, age and any improvements you have made
- Furnished / unfurnished
Paragon Properties would also consider factors such as building
maintenance, services & utilities when carrying out a valuation.
It is important to have the property properly inspected for any
signs of problems that may affect the market value. In such cases,
Paragon Properties can assist by arranging builders work,
journeyman repairs etc. prior to advertising your property.
2. Getting Your Property Ready To Sell
If you are considering renovating or re-decorating your property
before you sell, just consider that you want your property to
appeal to as many people as possible. This means not indulging in
your own personal taste or brand of interior design what you
consider to be the pinnacle of high fashion - but instead look at
the bigger picture. For example, the majority of potential buyers
are likely to go for simple light colours, not to many different
colours schemes.
A lot of people here argue that their flamboyant idea is great and
people will love it. Sadly they are seldom proved right. The
simplistic, clean, functional approach comes up trumps every time.
When marketing your property consider the following points;
- Tidy up & clean
- Consider packing away all of your 'clutter', or personal
affects from around the house and try to maintain a 'minimalist'
space. This will allow the viewer to imagine themselves in your
property.
- Simple paint colours, not too many: Magnolia is a classic
and is a safe bet.
- Good quality fixtures & fittings make a big difference.
- Bathroom: a really big plus point in any property, make sure
that it is clean and have any silicone sealant, defective/ leaky
hoses renewed or replaced. There are specialist cleaning
solutions that will get the place spotless.
- Appliances: If it's broke, then do something about it and
get it fixed!
- Appliances: If it's not broke, great, but at least give them
a quick clean
- Introduce a vase of flowers or some plants within the
space to add a touch of the outdoors and some colour.
- Plug-in air fresheners are relatively effective at
maintaining a pleasant aroma within the space. This is essential
if you are a smoker, have a smelly dog, or if you're a lover of
chicken curry.
If you have lived in your property for a long time it is always
a good idea to get a second person (perhaps a friend, neighbour or
colleague) to come and look - giving the perspective of a
potential buyer so that they can point out all the things that
they don't like, or the things that would put them off buying your
property. They have to be honest, otherwise this exercise won't
work! If at any stage you need any assistance or advice with
regard to updating or cleaning your property, please feel free to
contact Paragon Properties. We would be pleased to arrange an
initial visit to make an assessment followed by a full
professional service that is guaranteed to make your property
stand above the rest!
Disclosure is perhaps as important than the above. You should
disclose any defects that you know of such as structural problems,
leaking roof etc at the time of selling your property. Not only
will we be able to offer advice on the best way to proceed, we
will ensure that by being up-front there will be no recriminations
following the sale. You should also formally agree to what is
included in the sale and record this on an inventory (copy example
available from Paragon Properties). Things such as fixtures &
fittings, curtains, lighting, electrical appliances, cooking
equipment etc should be listed to prevent any confusion at a later
date.
LAND TITLING & RELATED .
Apart from Condominium ownership and erecting buildings on land
not owned (both covered below), land titling can be quite
complicated. There are various levels of land titling - from a
simple right of possession through to a full title as we know it
in the Western world. This full land title deed is called a "Chanot"
and is backed up by being recorded by the government, using GPS to
record both the area and its boundaries. The Chanot paper itself
is normally of a few pages and shows a surveyed plan of the land,
various registration numbers, previous owners and mortgage
history. Beware of photocopies and make sure that official chops,
notations and the Garuda (the official Government authority crest)
are all clear and readable. This is an extremely valuable document
- just like title deeds in Europe and losing it will give all
sorts of problems.
Fortunately, most land and property that is traded on the Eastern
Seaboard has a Chanot title. However, there will still be cases
where a lesser title is only available - such as Nor Sor Saam and
Nor Sor Saam Gor - usually in undeveloped areas in the
countryside. This may still be acceptable and it is often possible
to upgrade to Chanot over time. However, we are getting into a
very specialised area and it is essential to seek Paragon
Properties' legal advice in these cases. Although land prices may
well be lower for these lesser titles, it may well be prudent to
discount any property without Chanot title.
Buying land for subdivision is also a specialised area and
involves many local and central government departments, building
codes and suchlike. There are waiting periods before titles may be
issued. Again, an area for experts. We are currently hearing some
disturbing stories about the authorities clamping down on land
subdivisions. Any scent of foreign ownership in the overall
development might well mean that the issuance of eventual titles
to individual owners is a problem. One precaution that an
end-purchaser might take is to have some sort of break clause
covering any problem in the issuance of the individual end titles.
Condominiums are looked at below under 'Ownership by foreigners'.
Erecting buildings on land not owned does happen and this is
invariably where a foreigner has taken a long lease (usually 30
years).
Ownership by Foreigners
Basically, Thai law does not allow a foreigner to own land in
Thailand, although they can own the buildings thereon. There are
two notable exceptions to this strict law. Firstly, where a
foreign company has Board of Investment ("B.O.I.") approval and
the land is part of the project (usually manufacturing). Even
then, the ownership is very much tied in with the overall B.O.I.
terms. Secondly, a new law (Land Code Section 96, 2002) allows an
Alien to buy up to one Rai for his or her residential purposes in
metropolitan areas such as Bangkok or Pattaya providing they also
invest at least 40 million Baht for five years in government
bonds, recognised property, mutual funds or B.O.I. projects.
Permission for this must be obtained from the Interior Ministry
and the ownership is monitored by the Lands Department.
Apart from these two rare exceptions, both partnerships and
companies also fall under the strict land ownership by foreigners'
prohibition - should the foreigners control too large a share. The
Alien Business Law, which regulates the investment in land by
foreigners, states that "land trading" is prohibited to
foreigners. A foreign-controlled company is defined under Thai
land law, and states that any Thai registered companies or
partnerships with more than 49% of the company's total capital, or
more than half the shareholders being non-Thai, are considered
foreign. It is often difficult for even a company with a 51%
Thai/49% foreign ownership to purchase land - particularly if you
are using an inexperienced lawyer. Paragon Properties have
professional experienced lawyers on hand to ensure acquisitions
are made legally and expediently whenever foreign ownership is in
question.
Condominiums
The relatively new condominium law that was created some years ago
allowed for up to 40% foreign ownership on new condo developments.
This was then raised to 49% of the units and extends now to most
existing condo blocks. Then an unlimited foreign ownership share
concession started to apply to developments in Bangkok and
Pattaya, providing the developments were more than 40 units and
being on no more than five Rai. This relaxation was stopped in
2004, meaning that a Thai (or a Thai company) cannot now sell a
condo unit to a foreigner if the total foreign ownership level is
over 49%. Selling foreigner to foreigner appears to be OK,
regardless of foreign ownership level. Foreigner to Thai is no
problem, whatever the level. Care must be taken with bringing in
the funds for the acquisition - following Thai banking procedure
to the letter. This means creating a Foreign Currency Account in
order to qualify for a "Tor Dor 3" certificate - issued by your
Thai bank to verify that the originating funding came from outside
Thailand in a currency other than Thai Baht.
This certificate is needed by the Lands Department.
This is by far the safest way to own property in Thailand as an
individual. On making a condo selection, it is important to check
such as the condo sits on freehold land, the level of foreign
ownership pertaining and current outgoings. Good ongoing
management is also important - needless to say, you will also need
to find out exactly what your ongoing service charges will be and
what they cover. Major expenditure such as an external repaint and
lift replacement in the future may come as a rude shock if they
are an extra.
Practical Solutions to Land Ownership
- Leasing the land - Currently, Thai law allows a maximum term
of 30 years for a lease of land. It is usually possible to
extend this lease each 30 years. Currently, at the end of each
term, both the lessor and lessee ('seller" and "buyer") must
register the renewal with the Land Department and pay government
fees, and other expenses, such as stamp duty. This gives
effective "ownership" of the land and has become a popular
choice. The downsides include the Lessor not wishing to renew,
any future law changes and the fact that you have invested
capital into a very personal investment, not easily tradable.
- Nominee - all you need is a Thai national who is
prepared to be the "legal" owner on your behalf. A matter of
trust and not recommended. A well-known English writer living in
Bangkok a few years ago bought a small condominium and placed it
in the name of his long-term and trusted maid. After an extended
holiday in Europe, he returned to find that she had sold the
property as she was broke. At least she was not all bad - she
held all his personal items (including a safe) for his return.
It appears that there was simply too much temptation and, whilst
we realise that there are many trustworthy people out here, it
really is a case of proceed with extreme caution in this regard.
- Nominee with Mortgage - this interesting method was
found on an obscure website. Get the maid or other person to
sign as owner as above, but you take out a mortgage with
yourself as the "lender". There will be a small fee to pay to
register the mortgage with the Lands Office, but the property
cannot be sold without your consent (i.e. you have not
discharged the mortgage). Holding a blank transfer document
signed by the Nominee would help with any future Nominee
changes.
- Company Ownership - This is probably the most popular
method of property ownership. This is normally done through a
lawyer's office and provides effective control. Being a company,
there will be such as ongoing accounting and legal fees payable,
but not much. Setting up the company does cost (see Company
Formation below), but at a fraction of the purchase price. The
company is normally sold as part of any on-sale.
Thai Spouses
This is a difficult area and great care must be taken on marriage
to ensure that any property elements are correctly dealt with. The
general rule is that Thai nationals who marry foreigners are not
allowed to own land in Thailand, unless the foreign spouse signs a
document which declares that the property is separate, and that he
or she has no interest in the property in any way. The Thai spouse
must also declare that the money to buy the property was his/hers
in the first place. So, putting land into your Thai spouse's name
is difficult and fraught with difficulties. Legal help should be
sought so as to protect all interests - including the rights of
offspring of the marriage (such as their inheritance rights).
Mortgages
Outside of Paragon Properties, the chances of getting a mortgage
within Thailand are slim, but not impossible. Expatriate workers
with a large local salary are in the best position as they will
undoubtedly have substantial collateral along with the relevant
Visa and work permit, which is favoured highly amongst the local
banks. Most non-Thai property buyers here in the past will usually
have enough funds to buy outright.
Wills
An often-ignored aspect of Thai property ownership is to register
your Will here. Not doing so means huge problems for your
Executors and Beneficiaries, even if you have created a cast-iron
Will overseas. If you plan to purchase or have purchased property,
please do make a will. Find a lawyer who will make a will on your
behalf and on behalf of your partner. This really is a MUST!!
There have been numerous 'horror stories' about foreigners who
have died here and their families / beneficiaries have been unable
to gain their inheritance. Advice on such matters can be sought
from a number of sources here in Pattaya such as the Pattaya
Expats Club for example.
Taxation
Admittedly there is not a great deal of information readily
available on this issue and advice should be sought from
accountants and tax lawyers. How much Stamp Duty is payable on
purchase/sale? What are the ramifications of owning a property
through a company structure? (see details below on the formation
of a Thai Company).
The general combined government taxes payable on a sale (Transfer
Tax, Transfer Fee and Stamp Tax) appear to be some 5.5% of the
land value - as set by the Land Office. Who pays this (vendor,
buyer or shared) is negotiable. On an ongoing basis, there appears
to be two main taxes applicable on property owners in Thailand,
Land Tax and Structures Usage Tax. The former is a very small tax
levied on land ownership equivalent to just a few Thai Baht per
Rai per year. Structures Usage Tax is applicable at the rate of
12.5% on the actual (or assessed) gross rental value of the
property. Lessees are not subject to this tax but may be required
by the developer to pay an "annual ground rent" instead.
A third tax is Withholding Tax - payable on most income streams
earned in the Kingdom. Mainly applying to payers of income (i.e.
employers) so as to capture tax at source, rents also fall under
this category. This form of Income Tax may also apply to sales of
immovable property if the sale is made for a commercial purpose
and it is essential that such income must be included as
assessable income. Nevertheless, from January 2003, gains from
sales of residential buildings shall not be included as income if
such gains are spent on purchasing a new home within one year
before or after selling the primary residence. Again, it is vital
to assess the ramifications of taxation on buying and selling
property, whatever method is used to "own" the property or
properties in question.
Building Codes, Planning
Moving into the area of construction, you will need professional
advice from qualified people such as architects and engineers - so
as to understand local planning codes and practices. Like Hong
Kong and most other SE Asian countries, the principal engineer or
architect "signs off" once a building is completed, taking
responsibility that the building is sound and that it complies
with the prevailing building codes. In the event of any failure or
breach, that person is held liable. In the Western world, such
professionals would carry adequate indemnity insurance to cover
any claims against them. It might be a good idea to see what type
of indemnity your selected "authorised person" carries - or
whether he or she is financial enough not to do "a runner" in the
case of a building collapse for example. Such an event is treated
as a criminal act in the Kingdom and penalties can be very severe
where there is loss of life.
Please note that The Thai laws are always subject to change, so
please contact us if there are any aspect of these details you are
unsure about. This is not a legal document and whilst care has
been taken in compiling this information, we would be taken as a
guide only.
THAI LAND MEASUREMENTS.
Thai land measurements are fairly simple, even if at first it all
looks somewhat confusing - being a combination of imperial and
metric measurement systems. On all title deeds here in Thailand
all measurements are made using the Thai system and are also
written in Thai, therefore it is beneficial for you to gain a
little knowledge if you are thinking of buying property or land
here. Below you'll find a quick comparison between the two which
hopefully will help you gain a better understanding.
- Wah = 2 Metres
- 1 Sq Wah is called a Talangwah = 4 Sqm
- 100 Talangwah = 1 Ngan = 400 Sqm
- 4 Ngan = 1 Rai = 1600 Sqm = 400 Talangwah
So, when you see measurements of say 2 Rai - 3 Ngan - 35
Talangwah or 2-3-35 this means: 3200 + 1200 +140 = 4500 Sqm
- 1 Acre = 4047 Sqm = approx 2.53 Rai
- 1 Hectare = 10000 Sqm = 6.25 Rai
INSURANCE.
If you are considering relocating to Thailand you owe it to
yourself to research the subject of Insurance, covering not only
personal and health, but enveloping building insurance, house
contents etc. This is often overlooked and is especially important
if you are considering buying property here.
Home Insurance
When you have moved into your new home, you should take out
insurance to protect your investment. So how much coverage should
you have on your new home? What does a basic policy cover? What
happens if there is a fire? Again, please feel free to consult
with us and arrange for a quotation. We'll be pleased to shop
around for you and find the best value and level of cover that
suits your own needs, tailored to your requirements.
Premiums can vary depending upon the size of your home, features,
location, and construction e.g. security system, fences, keyed
locks on all windows and doors etc. Be sure to maintain your home
i.e. check for loose roof tiles, electrical fittings, plumbing,
wiring etc. Also note that some insurance policies in Thailand
don't cover against "Acts of God", such as lightning, hail,
earthquakes and floods etc. For contents Insurance, coverage can
be for replacement value or cash value. Say your THB 5,000 fridge
is destroyed, full replacement ensures a new one. Cash value would
only give you the depreciated value, say THB 3,000, but full
replacement policies are dearer. You should always keep receipts
for major purchases and detailed inventory records wherever
possible for insurance purposes. Standard content policies in
Thailand don't cover you against burglary and theft of your
valuables, e.g. video recorder, computer, jewellery - for those
items you will need a burglary and robbery (special risks) policy.
If in doubt, please ask us and we'll be pleased to point you in
the right direction.
Health Insurance
Also an important and sometimes overlooked issue. Even if you are
in good health it makes sense to take out your own health
insurance during your stay in Thailand. For those who are working
here some employers include this with their staff salary package.
There are a number of hospitals here in Pattaya and it is also
advisable to go along to one of them and undergo a medical and
your details registered. Paragon Properties have staff that are
trained and qualified in insurance and the many types of policies
available and can arrange for health insurance cover via BUPA Blue
Cross - details of which are available on request.
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