Thailand Real Estate: Pattaya, Rayong, Hua Hin Property — Condo, Houses, Homes For Sale
It is very easy to buy a flat or a condominium on a pre-owned market in Pattaya and in the whole Thailand. The preparation of the documents lasts approximately a week while the registration of the ownership takes a couple of hours. Many foreigners buy condominiums in Thailand because it is easy to legalize all the documents. Let`s concentrate on the process of buying a flat in Thailand in details.
1. Choosing an apartment.
It is better to consult a professional real estate agent in order to choose an apartment in Pattaya because the market is really huge. The real estate agency will help you to find the most suitable flat for you, will check ownership documents which are possessed by the seller, will find out the exact tax sum for condo registration, will provide a full legal backing until the moment of getting the keys and moving in. The commission for real estate agent is always paid by the seller. The buyer doesn`t pay any additional sums to the agent. There were a lot of examples when people tried to deal without an agent in order not to pay extra money. But this is a wrong way because the buyer spends too much time and energy. Moreover, you risk to pay even more because you are not experienced in local laws and business system while a solid real estate agency provides basic service for free. All the procedures are performed in Thai language and this condition also requires a professional help of the agent. So, you are welcome to ask our agency for help and advice and in this case you will be sure that your purchase is legal. The professional level of our agency can be proved by six years of our work on Thailand market and our image.
2. How to sign a purchase agreement.
When you choose a flat you have to sign a purchase agreement with the property owner. You should note that there is not any set samples of the contract, so the text of the document can vary in different companies. The contracts which are provided by our agency are standard and we have already served more than 500 clients who bought an apartment on the pre-owned market. Basically, this agreement is introductory as it determines the rights and responsibilities of the parties until the ownership registration. After the documents are ready you will get the "Chanoot" (the document which registers the flat ownership) in Land Office. Also you will be provided with an official act proving the purchase which has the price of the flat, your name and the seller`s name. In this case the introductory agreement must have all the details of the details: how the taxes are paid, in what form the flat is sold, what are the payments deadlines, how much is the deposit. The sum of the deposit usually varies from 5% to 10% of an apartment price. The agreements which are conducted by our agency include penalties for both parties. If the seller didn`t manage to perform re-legalization of his or her flat during the set period, the seller is obliged to return the deposit and pay extra 30% -100% from the amount of the deposit. If you haven`t paid for the flat during the set period, the deposit will be given to the seller.
If a person is a foreigner, the purchase agreement can be composed in English. If both people are the Thailand citizens, the agreement is performed in Thai language only. The contracts which are written in other languages are not recognized and can`t be introduced to the court.
3. Required documents for the registration of the apartment.
The first owner of the flat has to register the ownership for the buyer. In order to do this it is necessary to show 2 documents in the Land Office (State Registration Institution). The seller should posses a paper from the condominium administration, and you should have the certificate from the bank which has an office in Thailand. The certificate from the office is known as Foreign Exchange Transaction Form (or FET) and it confirms that the money for the purchasing of the flat were imported from the other country. The FET is necessary to register the condominium under the ownership of the foreigner. If the property is bought by the company registered in Thailand, FET is not required. The FET certificate can be taken in any bank on basis of the international money transaction or travellers cheques exchange. As a rule, we open an account in a Thailand bank for our clients for free. It is quite difficult to open an account without an agent, as many banks require work permit or a long-term visa which can`t be a touristic one. When you buy an a condo it is not necessary to open an account but this is a very convenient option. Firstly, you can always withdraw some cash, credit account and use the debit card of the Thai bank on vacation in Thailand and in any other country.
4. The transfer of the ownership.
In order to transfer the ownership from the seller to the buyer who is a foreigner you should provide a pack of the following papers to the Land Office:
The last document ( the paper requesting the transfer of the ownership) is prepared and filled in by our specialist for you. Of course, we won`t take any charge for this service. The only thing you will have to do is to sign this request. We want to pay your attention that it is not necessary to invite the licensed lawyer whose service costs a lot.
At the next stage the Land Office officers check several points. They analyze authenticity and adequacy of the documents, are there any encumbrance on the sold apartment, is it possible to transfer the ownership right to the foreigner. After checking the papers they will fill in a standard contract which has an affirmed format and text. This contract should be signed by both parties. Before the contract signing you have to pay all the necessary levies, fees and taxes. All the payments can be done in the Land Office counter. It is important to notice that when you sign the contract in the Land Office you confirm that all the payments are fully provided and you accept the apartment and its readiness. So, the full payment is usually conducted in this institution. Generally you can use a banking account or cash in Thai baht, but the second variant is quite rarely used. When you have the original document "chanot", which is the certificate declaring the ownership, you posses the flat legally.
5. What are real estate taxes like in Thailand and how much are there the additional expenses during the purchase?
Unlike most of the countries Thailand doesn`t have any taxes for the ownership of the apartment and generally for any form of property or housing. So, if you simply buy a condominium you will have to pay taxes only twice. The first time you should pay the charge comes when you buy the property and the second moment to cover the levy is when you sell it. The scheme of payments for the taxes when you purchase an apartment is set in the introductory agreement which is signed in cooperation with the real estate agency.
Recently the majority of sellers offer the buyers to pay 100% of the whole tax sum, seldom the duties are covered by both parties proportionally. The calculation of the sum which should be paid to the state for the registration of the flat is performed in the Land Office. This procedure is realized at the moment of the consummation of the deal. This sum includes several tariffs and loyalties but you have no need to concentrate on the meaning of each item in details because it will be hard to figure out for you because you don`t know Thailand laws. Moreover, the Land Office specialist take into consideration a lot of different aspect, for example, it is important to have information about the previous buyer. When did the first owner purchase the flat? How much time was it possessed ? What is the current rate of seller`s income tax? What is the assessed value of the flat?
The assessed value of the flat is important to be stressed out. Usually it is a bit lower than the price of the flat on the market. Meanwhile, you can intentionally write in the purchase agreement a lower price of the apartment in order to pay less taxes. In this case the sum of the taxes will be calculated on the basis of the assessed value of the property. Besides this, the sum which is provided in the FET certificate given by a Thailand bank can`t be lower than the assessed value of the apartment. If it is so, you registration will be denied.
Surely, we check that the prices are correspondent when we consummate a deal in our office. We find out the sum of the tax before the parties sign the contract. In this case both seller and buyer are aware of their obligatory spending in advance. Basically this sum range from 4,5 % to 7 % depending on the price of the purchased condo.
Some extra payments are of small account. Sometimes the seller asks to return him some money he paid for keeping the condominium up. This payment is known as "maintenance fee". For example, if the seller paid for the flat for the whole future year in January and you bought the flat in March, you will have to return him the sum for the rest 9 months. Moreover, it will be necessary to pay several thousands of THB for resetting of the light and water calculator into your name.
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