Foreigners who want to make a home in Thailand generally may not be able to buy land, but they can purchase a condominium as long as they meet certain criteria. The requirements are not that arduous, although there is some confusion regarding the source of funds. This article will shed some light on the process and requirements for buying a condo in Thailand.
(Note: this article discusses purchases by private individuals, not juristic persons or corporate entities.)
THREE TYPES OF FOREIGN INDIVIDUALS CAN BUY CONDOS IN THAILAND
Under the Condominium Act of 1979 (amended in 2008), there are five categories of “aliens” that can own a condominium in Thailand. The three that reference foreign individuals are:
- Foreigners living in Thailand with Permanent Residence status;
- Foreigners living in Thailand with a work permit and visa sponsored by a Board of Investment promoted company; or
- Foreigners who pay with funds:
- transferred into Thailand from overseas;
- from a Thai-baht account where the account owner resides outside of Thailand; or
- from a foreign currency-based deposit account.
In simple English, for buying a condo in Thailand, you must either a) hold a permanent resident permit or, b) work for a BOI company and hold a valid work permit/visa, or c) intend to legally bring in or have brought in foreign currency into the country to be used for the purchase of a condo (and properly notated as such).
This is important because in order to register ownership with the Land Department in your name, you will have to provide proof of your status under a, b, or c.
TAKE NOTE OF CONDOMINIUM FOREIGN OWNERSHIP QUOTAS
A foreigner can buy into any condominium project anywhere in the Kingdom, as long as foreign ownership does not exceed 49% of the total space available for sale. The condominium project or juristic person will have to provide documentation certifying this to be submitted to the Land Department. It is the developer or juristic person management company’s responsibility to ensure the ratio is maintained, but you should have your attorney check as part of the due diligence process to ensure that your purchase is legitimate under Thai law.
CONFUSION SOMETIMES OCCURS WHEN PAYING FOR THE CONDO
We typically find that there is a misunderstanding of the statute when it comes to payment for buying a condo in Thailand. Many banks and realtors will insist that all foreigners must bring money in from overseas to purchase a condominium unit. As this article points out, this is not the case, however there are only two very narrow categories where a buyer does not have to do this.
Unfortunately, if you are not a permanent resident or are not validly working for a BOI company, you may have to transfer locally parked funds out of Thailand and back in again to receive a Foreign Exchange Transaction (FET) letter from the bank. If the account is held by an overseas individual or is a foreign currency-based deposit, the bank may issue the letter based on the fact these funds originated overseas. Regardless, you need this letter when registering your purchase with the Land Department.
Please note: There are rare cases where individuals working in Thailand and living here on a long-term, non-immigrant visa with a work permit can pay with funds earned in Thailand. However, the bank where the funds are deposited must be willing to issue a confirmation letter of the source of these earnings and the Land Department in question must be willing to accept this letter in lieu of an FET. This is by no means a guaranteed outcome as it requires both the Land Department and the Thai bank to be amenable to this option.
GPS LEGAL CAN HELP WHEN BUYING A CONDO IN THAILAND
GPS Legal has years of experience assisting in real estate transactions, both commercial and residential, all over Thailand.