Property Lease in Thailand by Albatros Properties

Property Lease in Thailand

As foreigners cannot claim ownership over land as freehold, the preferred method of acquiring land is through leasehold. A foreigner can safely acquire the right to use the land and register the right for a maximum lease term of 30-year lease at the Land Department. Lease term – A lease agreement will usually guarantee the initial 30-year lease term. Renewal of Lease Renewal of lease in Thailand is not in Perpetuity. There is no automatic right to renew and parties must take an active step to renew the lease towards the end of the initial term. It is difficult, but possible and success will depend upon careful drafting of the clause regarding the intention to renew and subject to the Registrar’s discretion. Renewal periods thereafter the initial period must not exceed 30 years. Lease Agreements and Registration Drafting of the Lease The lease contract is usually drafted in the Thai language, however we do provide English versions if needed. It is recommended to include family members such as young adults as co-lessees in the contract. In the uneventful demise of the parents, the children can carry on the full term of the lease period. Registration Leases for more than 3 years are able to be registered at the Land Office, which will then further protect your interest in the house, as it […]
Property Mortgages - Albatros Properties

Property Mortgages

The law of Thailand provides for mortgage contracts under Book 3, Title 12 of the Civil and Commercial Code. The nature of the mortgage contract is that it is one in which a debtor assigns property to a creditor in order to secure repayment of a debt. Below are the following points you might need to know about property mortgages in Thailand: Foreigners must consult with a lawyer before taking out a mortgage in order to purchase any type of real estate in Thailand. This is particularly true in the case of both condominium units and houses. In regards to condominium units, the Condominium Act of 1979 and a Land Department regulation issued in 2004 require that non-resident foreigners (i.e. any foreigners without permanent resident status) must transfer foreign currency into Thailand and convert it into Thai baht in an amount no less than the purchase price of the condominium unit. The preceding rule (Condominium Act of 1979 and a Land Department regulation) presents difficulties for foreigners who wish to apply for a mortgage in order to finance their purchase of a condominium. Any foreign nationals interested in obtaining financing may have to contact a local Thai bank who is able to assist in providing a loan issued in foreign currency which is transferred from overseas. As for financing such […]
Title Search - Albatros Properties

Title search

Importance of Title Search Before making any large purchase it is important to make sure you know what you are purchasing. A title search is “highly advised” before purchasing any kind of real property, whether it is a piece of land or a condominium. These are the reasons a title search is a “must” A title search is done to determine whether the person selling you the property is the true owner of the property and free to sell it to you. It also will determine if there are any registered encumbrances on the property such as a loan, lien or a mortgage. A title search traces title to the land back to the original property holder. In Thailand all land originally belonged to the king. Thailand began issuing deeds to private real estate when the Department of Land established in 1901. Over the years, numerous land reform initiatives have resulted in some confusion over who owns what. A wide variety of official documents are used to show land ownership, some of which do not allow for the sale or lease of the land. Different Types of Claims on Land and Property The Por Tor Bor 5, Bai Jong (NS-2) and Sor Kor 1 (SK-1) Used to establish a claim to the land. Land ownership, which is only evidenced by […]
Thailand Property Taxes - Albatros Properties

Thailand Property Taxes

Transfer fee: 2% of the registered value of the property.   Stamp Duty: 0.5% of registered value. Only payable if exempt from business tax. Withholding tax: 1% of the appraised value or registered sale value of the property (whichever is higher and if the seller is a company). If the seller is an individual, withholding tax is calculated at a progressive rate based on the appraisal value of the property. Business tax: 3.3% of the appraised value or registered sale value of the property (whichever is higher). This applies to both individuals and companies. TAX WHICH PARTY NORMALLY PAYS? AMOUNT Transfer fee Buyer 2% of registered value Stamp Duty Seller 0.5% of registered value Withholding Tax Seller 1% of appraised value or registered sale value (whichever is higher) Business Tax Seller 3.3% of appraised value or registered sale value (whichever is higher) Property Transfer Taxes Example of How to Calculate Taxes and Costs: Suppose that the government assessed price is 50,000 Baht per square meter. Total area is 100 square meters. The total assessed price is 5,000,000 Baht. Actual selling price is 6,000,000 Baht. The Seller possessed this property for 3 year. Withholding Taxes The government assessed price​ = 5,000,000 Baht Deduction with the expense of possession for 3 years for 77% ​ = 3,850,000 Balance = 1,150,000 (5,000,000 – […]
The Thai Law - Albatros Properties

The legal Thai system

The Thai Law Thailand has a codified system of law as a result of reforms instituted by King Chulalongkorn (King Rama V) at the turn of the nineteenth century. The major legislative codes are the Civil and Commercial Code, the Penal Code, the Civil Procedure Code, the Criminal Procedure Code, the Revenue Code, and the Land Code. The content of the Codes was drawn from the laws of other countries having codified systems (e.g. France, Switzerland, and Germany), from countries with common law systems (e.g. Great Britain), and from the traditional laws of Thailand. As mentioned above, the supreme law of Thailand at present is the Interim Constitution 2014, which still recognises and endorses the existing Acts of the Thai Legislature, Royal Decrees, Emergency Decrees, Ministerial Regulations, Ministerial Notifications, other governmental notifications, and local government regulations, and those to be enacted or issued by the NLA and the government, which are supplementary to it. Laws are normally drafted in broad terms, especially laws regulating commercial activities. Broad powers are delegated to government ministries or organisations, which are empowered to issue notifications and regulations. The Thai Courts The Court of Justice is divided into three tiers: the Supreme Court ( ​Sarn Dika); the Court of Appeals ( ​Sarn Uthorn); and the Court of First Instance ( ​Sarn Chunton). There are separate Juvenile, Labour […]
House book in Thailand - Albatros Properties

House books in Thailand

What is a Tabien Baan or Thai house book?  Tabien baan or Thai house book is the official local government issued house or apartment address and resident registration booklet. It is an administrative document issued by the local municipality. The persons having their domicile or legal residence at the house or condo unit are registered in the house book. Contrary to what is often assumed by foreigners this document has nothing to do with ownership of a house or condo and cannot be used as proof of ownership. It is a booklet issued by the local municipality (not the land department) that belongs to the official address registration papers of a home or condo and its practical use is that it registers and proves a person’s place of legal residence (official domicile). A house book can state the name of the owner if they are Thai. The same cannot be said for a foreign non-resident owner, unless they have official residency in Thailand. The 2 types of house books in Thailand The blue “Tabien Baan” or blue house book (Thor.Ror.14) for Thai nationals. The yellow “Tabien Baan” or yellow house book (Thor.Ror.13) for foreigners. As a house book proves a person’s domicile, it is required in official registration procedures such as the transfer of ownership of a car or real estate, […]