Buying property in Thailand

Thailand is a dream holiday destination - so how much better would it be to live there full time? British citizens who have fallen in love with Thailand may be wondering about how to make a permanent move to live, work or retire there - and a natural place to start is by finding a property.

If you’re thinking of buying property in Thailand, this guide is for you. We’ll cover all the information you need, including:

• Can a foreigner buy a house in Thailand?

• Is buying property in Thailand a good investment?

• How can I find a property in Thailand?

• What Thai property pitfalls should I look out for?

• How much is property tax in Thailand?

What are the requirements to buy a house in Thailand?

Let’s start with the basics about buying property in Thailand. Foreigners can not legally own land in their own name in Thailand - which means that it’s impossible to buy a freehold property in the way you might in the UK. However, there are a few alternatives, which make buying a property in Thailand a feasible and popular option for many.

Firstly, it’s useful to know that these rules only apply to freehold properties. If you’re thinking of buying an apartment that’s more likely to come on a leasehold basis - which means you can go ahead and buy. You’ll own the apartment but not the land it stands on, much the same as buying a leasehold place in the UK. The only other proviso is that the condominium you buy in has to have a fixed percentage of Thai owners - usually over 51% - unless you’re buying the whole block yourself.

And secondly, if you’re dead set on buying a freehold home, you may be able to do this by setting up a company in Thailand which holds the property on your behalf. There are legal considerations if you're interested in this option, but also many agents and companies set up to help you understand and navigate the process if you need help.

How to buy a home in Thailand step by step

Buying a home in Thailand won’t necessarily work like buying a property in the UK. There are different local norms, and importantly, the industry isn’t regulated in the same way as it is in the UK. That means there are more risks involved and you and your legal advisors will have to be very careful to check the sale is being made legally to avoid problems and potential scams.

Here are the basic steps you’ll need to take:

1. Set a budget for buying your new Thai property, including getting a mortgage offer in principal if that’s how you’ll pay for it

2. Get a real estate solicitor who is familiar with the process of purchasing property in Thailand - their advice and support is essential

3. Research and view properties online, in person or through an estate agent

4. Negotiate and agree a selling price when you’ve found your dream place

5. The seller will provide the purchase agreement which you and your solicitor must check thoroughly

6. Pay a deposit - usually 10% of the agreed price

7. Your solicitor will complete due diligence checks to make sure the property is being legally sold and all paperwork is available. You may also want to instruct a building survey at this stage

8. Once everything is in order you can close and sign the sales contract

9. Pay the remaining purchase costs and fees

10. Your solicitor will register the title deeds in your name, and you’ll need to pay any outstanding taxes or costs

Thai property prices

Property in Thailand includes everything from chic city apartments in downtown Bangkok, beachside getaways in Koh Samui and atmospheric homes in Chiang Mai. Depending on your budget and your personal preferences you’ll definitely find something which can suit you and help you build your perfect lifestyle in your new home.

When it comes to average prices by location, Bangkok is typically where you’ll find the most expensive property. It’s a huge city with a broad range of accommodation choices though, so you may well find something to suit you even if you’re on a budget. Other popular areas like Pattaya and Phuket are generally cheaper.

In Bangkok recent research showed that most condominiums - the type of property favoured by many expats - fall into the 5 - 10 million THB price bracket (around 115,000 GBP to 230 GBP), with just over a quarter of all units in this price range. The second largest chunk of apartment options falls into the 1 - 3 million THB bracket - meaning there’s also likely to be something for you if your budget is from about 25,000 GBP to 70,000 GBP.

We’ll look more closely at the best places to buy property in Thailand next.

Best places to buy property in Thailand

Thailand is a popular country with many different people - whether you’re seeking a busy city life, a place to chill on the beach, a party resort or a historic and cultural centre, there’s something for you. That means that the best place to buy property in Thailand will depend very much on your preferences and lifestyle.

Pattaya City in Chonburi province is extremely popular with expats from around the world, thanks to beaches, shopping and proximity to Bangkok. Phuket island is another great place if you want beaches and resorts, with Phuket town offering some history and culture when you want a change.

Bangkok as Thailand’s capital and largest city by far is a popular place for people going to Thailand to work or looking for an investment property. The small city of Rayong is worth a look for cheaper apartments and a great beach. Alternatively, there’s also Chiang Mai - the 4th largest city in Thailand by population, and a big tourist draw.

Cheapest places to buy property in Thailand

Many areas of Thailand have a good mix of property types and prices, which means you may be able to find a relatively cheap place no matter what you’re looking for. Here are a few thoughts to get you started:

• Chiang Mai has lower average property costs compared to Bangkok, and offers a relatively peaceful lifestyle

• Phuket island has a great range of accommodation options at different price points, with all amenities in easy reach - spend some time getting to know different areas to decide which suits you

• Despite being a massive tourist location property prices on Koh Samui are relatively cheap - if you want to be off the beaten track a little more but still want the laid back beach vibe, try Krabi instead

Is buying a house as an investment in Thailand a good idea?

The Thai property market is relatively depressed at the moment thanks to the impact of the global pandemic. That may get you wondering: is investing in Thai property a good idea?

Ultimately, whether investing in Thai property will work for you or not depends on your preferences and how long you’re prepared to leave your money tied up in the property. The property market in Thailand has seen some pretty dramatic swings over time, which brings risk and won’t necessarily suit inexperienced investors. If you’re buying a property through forming a Thai company you’ll also need to account for extra costs involved in this step when you calculate investment returns.

Take professional advice before you take the leap into investing in property in Thailand.

What’s the property market like in Thailand?

The property market in Thailand has seen significant fluctuations in the past decade, from annual house price rises of 10% or more in 2009, to declines of several percent a year by 2012, followed by further steep rises and falls over the next ten years.

Thailand’s economy is highly reliant on tourism and so was hit hard by global travel restrictions during the pandemic. This caused another sudden shock to house prices in 2020-2021, with prices of condominiums and townhouses falling in real terms. Land prices took less of a hit - and overall commentators suggest Thai real estate is in for more of a rough ride until the world fully reopens for travel and tourism. This may mean further swings in house prices - which can be helpful if you time your purchase right, but less so if it’s time to sell.

How much does it cost to buy property in Thailand?

To help build a picture of the costs of buying property in Thailand, here are some average property prices in a few popular expat locations in Thailand. We’ve given the price per square metre so you can more easily compare the like for like costs for different places.

• Data taken from Numbeo.com; correct at time of writing, 18 March 2021

The additional costs involved with buying property in Thailand are very low compared to other countries, because most fees are paid by the seller. The main cost you’ll need to take into account when buying is the transfer fee:

• Transfer fee of 0.01% - 2% of the property value

Financing a property purchase in Thailand

There are a few common ways to finance a property purchase in Thailand:

• Buy in cash using savings

• Get a mortgage in Thailand through a bank or broker

• Get a mortgage or loan in the UK

• Refinance your UK property and use the cash to buy in Thailand

Unfortunately getting a mortgage in Thailand as a foreigner can be a little tricky. It’s possible to do it but the options may be limited - we’ll look at Thailand mortgage options in a little more detail next. All of the financing routes have their own ups and downs, though - get professional advice to help you decide which option might suit you if you’re unsure.

Getting a Thai mortgage

Up until fairly recently it was very rare for Thai banks to offer mortgages to foreigners. These days it’s possible to get a mortgage in Thailand as a foreigner, but in practice can be tricky as rules and eligibility requirements tend to be fairly strict.

It’s worth shopping around, and possibly working through a specialist mortgage broker, to find the right mortgage product for you. UOB and ICBC are 2 popular banks which offer foreigner friendly mortgages - and a good place to start on your hunt. It’s worth noting that if you have a Thai spouse you might have more luck making a joint mortgage application or having the Thai national be listed as a guarantor on the application.

Paying property tax in Thailand

In 2020 Thailand introduced a new Land and Building Tax which is presently in a transition phase. During this time home owners may need to pay a reduced rate of tax to help them adjust to the changes which are being made. The final amount of tax paid depends on the type of property and its value.

Aside from this there are not normally any ongoing property taxes to pay when you own a property in Thailand. The only exception would nomally be if you let out your property - in this case you're likely to be taxed on the rental income at around 12.5%.

How easy is buying property in Thailand for foreigners?

Buying property in Thailand doesn’t need to be too hard, if you have reputable local help and a good solicitor. However, there are risks involved, particularly because the industry is not regulated as tightly as in the UK. This means that fraudsters and scammers can be more active - and may target foreign buyers who are new to the process and the local Thai market.

Here are a few pitfalls you’ll want to avoid when buying a property in Thailand as a foreigner.

• Buying into a dodgy development - make sure you trust the developer if you’re buying new or off plan. Some foreigners have lost out because of poorly managed developments

• Problems with the title search. Before you hand over a penny your solicitor needs to do a full title search to check the property has been developed, and is being sold, legally

• Skipping due diligence checks - again this comes down to having a good legal team on hand. Make sure your solicitor is thorough in checking everything about the property stacks up

• Handing over your deposit too early - have an exit clause in your purchase agreement in case problems show up in the title or building survey. This should allow you to retrieve your deposit if you have to pull out of the sale through no fault of your own

• Make sure you know all service charges and other ongoing costs and have factored them into your budget

How to find a Thai property

Ultimately it’s strongly advisable to have a local, trustworthy estate agent to help you find your perfect property in Thailand. It’s possible to go it alone, but without knowing the area and the process of buying real estate in Thailand well there’s a high chance the experience will be stressful. Get caught up in a dodgy deal and it could be expensive too.

Estate agents work locally, so even if you choose an agency which covers all of Thailand, you should be able to get matched with an individual agent who knows the area you want to buy in well.

For most people, finding a property to buy in Thailand will start with browsing the internet looking at umbrella websites which pull together lots of property listings and are easily searchable. That’s a great way to build a picture of what’s available in your preferred area and at your budget. Once you’ve narrowed down what you want it’s time to get an agent involved - get first hand recommendations if you can to make sure you’re working with the best.

Thai property websites

Here are a few popular Thai property websites to get your search started:

• Thailand-property.com

• DDProperty

• Dot property

• Siam real estate

Conclusion

So many people visit Thailand and fall in love with the lifestyle, it’s no surprise that many want to take it one step further and buy a property there. Thai property is relatively inexpensive in many areas, making it possible to buy a home to live in, a place for holidays, or as an investment. However, because the industry isn’t regulated as tightly as it is in the UK there are some risks involved. It’s important therefore to have a good local agent and solicitor who can guide you through the purchase process and make sure you don’t lose out.

Use this guide to buying property in Thailand as a foreigner as a starting point to your research - and good luck finding your dream home in Thailand!