Phuket Real Estate / Property Guide
This is a quick overview of buying and owning that dream home on the paradise island of Phuket. I would like to point out that the following is my understanding of current Thai Property Law and would strongly advise before taking any serious steps to purchase property here you should always consult a qualified lawyer to obtain legal advice.
After taken all the usual and sensible precautions (done some due diligence, had a lawyer prepare you a solid lease agreement) property is as secure as anywhere else in the world.
The basic principles of purchase are:-
Foreigners CANNOT purchase land freehold.
Foreigners CAN purchase Apartments Leasehold
Foreigners CAN purchase Condominiums Freehold, subject to certain criteria.
Current Thai Law prohibits a non Thai from purchasing the freehold title, as a foreigner legally you can only purchase land Leasehold with a term of 30 years which can be extended.
What will it Cost
Land prices vary greatly on the island because of the diverse differences the most expensive will be beach land which can range from 10 to 30 million Baht per rai, inland land stabilizes a little more but depending on sea view, golf course view or in the back of beyond ranges from 250,000 to 10 million per rai.
Labour and local building material costs are low, but imported materials would cost more than many would expect.
You may own property on the land freehold, so if you are building from new or getting an existing property, obtain local qualified legal advice, to ensure property titles are thoroughly checked our prior to purchase. Complete searches on land adjacent or near your home or building plot, you do not want that beautiful sea view obscured in future years.
When buying an apartment you cannot as a foreigner own it freehold only able to purchase it on a leasehold basis and the lease can under current Thai law be for a maximum period of 30 years. There are many apartments offered with 30+30+30 year terms, where the leaseholder writes into the contract a guaranteed renewal at a nominal rate.
A foreigner can purchase a condominium with freehold title, subject to no more than 49% of the properties in the development being foreign owned. Note, I believe that this rule is currently being considered by the Thai Government with suggestions to extend this to 100%.
I have travelled the world fairly extensively and cannot think of anywhere else I would rather live or long time holiday in. The people, the culture, the climate, the low cost of living make this for me paradise on earth. Buying property here at present is a little more complex than back home but owning a little bit of paradise makes it all worthwhile. Property prices have risen exceedingly fast over the past few years and this trend looks sustainable for the coming years, yet you can still find very low cost properties, buying in strategic area’s can offer very good investment returns whilst you are enjoying everyday in the Land of Smiles.
Chanote or true title deeds are accurately surveyed, plotted in relation to national survey grid and also marked by unique numbered market posts set in the ground.
Nor Sor Sam or Nor Sor Sam Kor (N.S.3.) in general are less accurately surveyed than Chanote titles. They are, however, to all practical purposes land Title deeds in as much as clear records of ownership are maintained, and that they may be sold, leased, used as mortgage collateral etc.
As regards all other titles, it is neither possible to register a sale or lease over these land rights, nor will a bank accept them as collateral-and most importantly you cannot apply for (or obtain) approval to build on such land.
Measurement of Land
|= 4 Ngan (or 1600 sq m)
= 100 Wah (or 400 sq m)
= 4 sq m
= 2.5 Rai (approx.)
= 6.25 Rai (appox.)
Metric measures are usually used in the construction and measurement of buildings. Land price are usually expressed in Baht per Rai or (for smaller plots) Baht per Wah.
Zoning Restrictions in Phuket. From a single residence construction perspective, the only zones you will find significantly restrictive are land less than 50 metres from the sea shore (where single storey and maximum 25% ground coverage apply) and hillside land (where you may not exceed 8 metres building height)
Property tax (or rates), so long as a property is being used for private residential purposes, do not apply. However, upon ownership transfer, there are costs. These fall info four potential categories
Transfer Fees 2%
Stamp Duty 0.5%
Business Tax 3.3%
Income Tax (the Thai equivalent to capital gains tax-a variable rate).
Most of the fees are calculated relative to the government’s tax assessment value of the property and this value is well below market value.
For residential sales, expect the total fees and taxes to work out to be approximately 2-3% of the property market value and typically these will be spilt in some degree between the buyer and seller.