Buying a New Development in Thailand
How to Buy Off-plan Property
Thailand offers a variety of condominium developments in prime locations around the Kingdom of Thailand. Buyers have the option of buying first-hand directly off developer or from a resale unit off the second-hand market. Once you have decided to purchase a property, we will have to confirm with the development that you are purchasing within the 49% of foreign owner quota, only 49% of a building can be owned by foreign buyers. This article covers the process of buying a off plan and newly built developments.
What is the process for buying a new off plan condominium in Thailand?
Once you have made a decision on which unit you are interested in, you will have to sign a reservation agreement together with a pay a small booking fee to reserve the property. With the reservation agreement signed and booking fee paid, the unit on hold will not be offered to another purchaser.
Usually within 2 to 4 weeks, you would have to make an initial deposit between 10% to 30% of the total purchase price to developer. During the same time, the Sales and Purchase Agreement (SPA) will be prepared for your execution. 2 copies of the SPA are made and both are required to be sent back with original signatures using Blue Ink and signed on every single page on both copies. The seller will return one copy with counter signatures.
The final balance would only be due upon completion of the development after a unit inspection to check for any possible defects. Once all defects are rectified you can transfer the remaining balance and the developer will organise for the unit ownership to be transferred to your name.
What is the procedure to transfer money?
For foreigners who are buying condominium properties in Thailand, they are required to send 100% of the funds from overseas as a foreign currency. This is to show you’re making an investment into the country. Foreigners who have worked and paid taxes for many years can use local funds but would need to seek legal advice on how to execute a purchase using funds earned in Thailand.
For second-hand resell property a foreign buyer would have to show proof that the funds used for the purchase of the property were transferred from overseas. All foreign buyers will need to show a Foreign Exchange Transaction Form (FETF) at the time of transfer at the Land Department in order to obtain the title deed. This is obtained by your bank that the funds where sent to for a small administrative fee.
This is not required when buying new from a developer. Most of Thailand’s medium to larger developers have internal legal and finance teams who handle all the paper work and land office requirements as part of the service at no additional cost to the buyer.
The Foreign Exchange Transaction Form is an official bank document that is issued by the receiving bank upon receipt of the foreign currency from overseas. Which shows a foreign currency was converted to THB.
What are the fees that I will need to pay when I purchase a condominium?
There are the 3 most common fees to take note when buying a condominium in Thailand. Some properties may include on top fee’s for extra parking spaces and services.
- Common Area Fee is the cost of managing the common property of the development, such as cleaning and general maintenance, staff salaries etc. This fee is paid every month and is usually calculated based on a set amount multiplied by the size of your unit per square meter.
- Sinking Fund is a fund set aside for future capital expense such as major repairs of the building, elevators. This fund is usually paid only once at the time of purchase and only when the funds is used up, the owners will be asked to top it up.
- Transfer Fee is the land transfer fee payable to the Land Office. For the transfer of any real estate, the transfer fee is 2% and typically shared between both the seller and buyer.
This guide is created specifically for foreign purchases who are keen on purchasing a new property in Thailand. Processes may vary depending on developers. For more detail please feel free to contact our local expert agents to guide you through the process.