Koh Tao – Real Estate Investment in Paradise
The appeal of Thailand – for travelers and tourists as well as for retirees, and therefor for property investors – can not be denied. Thailand is under priced, it is the “Land of the Smile” it is incredibly beautiful and it has a vastly increasing numbers of annual visitors. Thailand is slowly but steadily building up it’s infrastructure and it’s reputation for foreign investment. Now if you are thinking of investing in property in Thailand, there are certain things you should take in consideration.
Real Estate demand in Thailand
The demand for property in Thailand affects many sectors and this demand is slowly but steadily increasing.There is massive tourism demand for accommodation across Thailand and the demand is increasing annually and will be further be further on increasing potentially over the next decade. One can foresee that the huge commercial demand for property will be increasing accordingly.Now because in recent history and vast political changes, the level of investment in Thailand has been relatively low. Fact is, there is actually a massive under supply in many sectors representing instant investment appeal.
Now add to this the fact that the real estate industry in Thailand is now actively taking it upon itself to promote the delights and opportunities available in Thailand, so you could quite possibly have reached the perfect time to enter and invest in the property market in Thailand if you make very carefully researched purchases that you are willing to hold for the long term.
Investors should be aware that this is not a market for short term investment. The Thai government is not keen on short term speculation in any of its investment markets, this includes the real estate market. As a direct result of these politics, there are very strict restrictions in place, preventing a real estate investor from owning land in Thailand in general or from owning more than 49% of any property development. (Except condominiums – A condominium can be owned by a foreigner to 100% according to the condominium Law ) There are of course ways around these restriction such as the use of a well structured Thailand Special Purpose Company. And of course there is property leasing, where you can lease property for up to 90 years in Thailand.
Sure there are definable and definite risks and rewards for a real estate investor in Thailand, but where not?. It is just up to the every individual to decide which outweighs the other and make a decision accordingly. Ultimately there is much to gain from real estate in Thailand on the long run.
We recommend in any case, if you want to invest in realty or buy or lease real estate or property for your own private purpose in Thailand, to have a real estate agent in the country who speaks and writes the Thai language and is familiar with the property laws in Thailand.
For any questions about real estate investment, buying or leasing property on Koh Tao, please contact : firstname.lastname@example.org
Koh Tao, Thailand
How to learn Thai fast and easy
The Primary School Koh Tao in Mae Haad, have set up a, for Thailand unique, program to teach Thai Language Lessons (TLL) to foreigners who stay longterm on Koh Tao and dare to take the challange.
The Thai language classes will be held by the local teachers at regular school time, and the local school children will be the assistant teachers! The participants will basically attend to the regular classes that have “Thai Language” as subject. As a student of the TLL classes you will not only learn to understand Thai, but also to speak, read and write the Thai language.Besides the fact that you will learn much about Thai Culture in these language classes, there is always a good chance that you might find a ‘lesson buddy’, who can help you understand things better and make your Thai Language Lesson an even greater success.
For more information and details on the TLL classes on Koh Tao, Thailand please also refer to the Koh Tao Community Website
Enjoy Your Retirement in Thailand
A quite life on a white sandy beach in Thailand, a beach chair, a cocktail glass a good book and a cigar. This is the dream of so many Westerners who plan to escape the cold winter and the tremendous cost of living in their home country. Foreigners come to Thailand for many different reasons. Be it to finally retire from a stressful working life or just to relax for a couple of month per year to regain strength and energy. Thailand offers foreigners a vast amount of benefits such as world class health care, beautiful beaches, tasty food, friendly people, and most of all; inexpensive properties and real estate. Living and retiring in Thailand is supposed to be an enjoyable and relaxing experience and if you prepare and plan thoroughly in advance, you will be rewarded for your efforts with your dream coming true.
Choose the Right Partner or Real Estate Agent
Once you have made the decision to stay longer in Thailand or even retire in the country of the smile, the ability to acquire property becomes a major issue. You don’t want anything to go wrong here. And since you will be looking to acquire real estate in a foreign country you are in need of trustworthy local assistance. Your partner in Thailand should be able to communicate in Thai, in speaking and writing, and must be familiar with the geographical area where you desire to buy or lease your property.
Your partner or agent will save you valuable time in pre-selecting properties and showing you only the property that fits your price ideal and meets your desires. We recommend though, that before you pay any money or sign any deposit agreement or contract to or with anybody, you should sit down with a solicitor or lawyer and discuss the legal process of purchasing real estate or property in Thailand. You must understand the exact rules for foreigners to acquire realty in Thailand including as well all the possibilities you have to finance your purchase. Some banks in Thailand will offer you up to 70 % financing and the re-payment terms can be up to 20 years. Read more about property financing and investment in Thailand.
The Legal Structure to Purchase Property in Thailand
Property – We feel that the best way to purchase land and build your own dream villa in Thailand is to lease the property for 90 years. The leasing contract can be renewed after it’s termination for another 90 years to follow. The cost of the renewal after the first 90 years is only 15% of the original purchase price and honestly, who cares what will be in 180 years?
Condominium – A foreigner may own up to 100% of a condominium in his/her own name in Thailand. If though the project is over the 49% quota in the foreigner’s name, one needs to draft a lease contract for a transaction to be recognized as the legal owner.
Investigate the Land Titles before You buy
A thorough examination of the title deed recorded at the Land Department must be done for your safety. You need to have a verification of the Seller’s clear and legal title of the land that you are about to purchase before you enter any contractual agreement. The title search will trace the ownership of the land back to its first owner which is in almost any case the King of Thailand. Do Not take the word of anybody, telling you that the title deed has been checked somewhat before. You need to possess a full report and a printed copy of the title deed in English and Thai language.
Deposit and Payments
Once you have the title deed and feel satisfied with the real, you will be asked to make a deposit on your property purchase to show your good faith and continue the process. In return, the land owner will reserve the property for you and start the process by drafting the contracts for purchase. Please note that unless you specifically add a “get-out” clause into the deposit agreement, e.g. “subject to clear title” or “subject to agreement on the contract terms,” the deposited money is non-refundable.
90 years Leasing Contract
Here at Supisha Limited we usually make the following agreement that has satisfied many customers since it is fair and reasonable to all parties:
- Deposit 15% of lease value
- Two weeks after construction start 20% of lease value
- Two month into construction 20% of lease value
- Three month into construction 20% of lease value
- Four month into construction 15% of lease value
- After Inspection and Handover 10% rest payment of lease value
- Estimated construction time 3 – 6 month depending on building size and weather conditions
- Re-selling of the property within the 90 years, Fee: 15% of the purchase price
- Contract renewal fee after the first 90 years 15% of the purchase price for another 90 years
Please contact our office in Koh Tao if you need any further information or assistance to purchase real estate or property in Thailand. If you happen to be on Koh Tao, please visit our office in Sairee and we will be happy to assist you and show you around. Our new project at Lighthouse, in the north east of Koh Tao offers beautiful spots to build a Villa with a stunning view over the Gulf of Thailand. Have a look at the pictures of each plot, you are gonna love it.
Financing Real Estate and Condominium Property
Are you thinking of buying a luxurious villa in
Terms and Conditions for the Financing of Residential Property in Thailand with the purpose to finance the purchase of freehold real estate property in the Kingdom of Thailand.
Loan Quantum: Can be up to 70% of the purchase price
Maximum Loan Amount: USD 8,000,000 or equivalent amount
Minimum Loan Amount: USD 100, 000 or equivalent amount
The Draw-down quantum shall be the lower of:
1) Amount as per approved limit
2) Up to 70% of purchase price of property, when converted at our prevailing exchange rate upon drawdown
3) 90% of appraised value upon completion (For property under construction) or up to 70% of appraisal value (For completed property) by our appointed valuer
Security: Legal mortgage of property to be financed
Loan Tenure: Max 20 years
Currency: The loan shall be dominated in SGD, USD, EUR or JPY
Interest Rate (Subject to Changes at Bank’s Discretion)
Loan in SGD – Bangkok Bank’s Prime Lending Rate per Annum (currently 6%)
Loan in USD-USD Prime + 0.5 % per annum (currently 8.25% + 0.5 % = 8.75%)
Loan in EUR-EUR Prime +1% per annum (currently 7.25% + 1% = 8.25%)
Loan in JPY – JPY Prime + 1.25 per annum (currently 2.85% + 1.25 % =4.10%)
Repayment: Repayment of principal and interest is by monthly installment and to commence once month from date of disbursement of loan.
Drawdown: Loan shall be drawdown only upon payment by the borrower of the difference between the purchases price and the loan amount, subject to completion of loan documents and fulfillment of the conditions precedent
Prepayment: Prepayment of loan allowed subject to payment of 1.5% flat rate on the loan amount to be prepaid
Processing Fee: Processing Fee of USD 1,750 is payable in two stages;
a) USD 150 or its equivalent is payable upon submission of loan application. This sum of USD 150 is non-refundable
b) USD 1,600 or its equivalent is payable upon acceptance of our letter of offer
Additional non-refundable fee of USD 120 or its equivalent shall be imposed for re-process of application if there’s any amendment to the loan request after the approval of facility
All expenses such as legal/mortgage costs/valuation fee and fire insurance premium etc shall be payable by borrower
- Completed Mortgage Loan Application Form
- Copy of I.D. card (front and back)/passport (essential pages)
- Signed copy of Sales and Purchase Agreement or Reserve Agreement
- Band’s reference letter addressed to Bangkok Bank Public Co Ltd confirming banking relationship, conduct type of account and size of loan/deposit with the bank
- Last 6 months bank statements
- Credit Bureau Report from country of residence
- For Salaried Individuals; Employer’s letter addressed to Bangkok Bank Public co Ltd confirming position, Years of Service and remuneration/ Last 2 years’ income Tax return/ Last 6 months’ computerized pay-slip
- For self-employed Individuals; Last 2 years’ Balance Sheet Profit & Loss Statements/ Last 2 years’ Income Tax Return
- Other upon request
The above does not constitute an offer, an invitation to offer, a solicitation or recommendation to enter into or conclude any transaction and is issued for information and discussion purposes only. The terms are subject to changes without prior notice. Actual transactions are handled according to the actual circumstance of each case. Final terms may differ and loan approval is subject to evaluation of applicant’s financial standing, repayment ability and at the bank’s discretion.
The law about acquisition of land by foreigners in Thailand states that certain requirements have to be fulfilled and we have listed them below.
Acquisition of Land in the Kingdom of Thailand for Residential Purpose by Foreigners
A foreigner who is bringing money, not less than forty million Baht as specified in the Ministerial Regulation, into the Kingdom for investment may apply for acquisition of land for residential purpose. Not more than one rai in area. Provided also that permission has been obtained from the Minister. Under section 96/bis of the Land Code, the application for such an acquisition of land shall be in accordance with rules, procedures and conditions prescribed in the Ministerial Regulation as follows:
1. In the case of a foreigner, who brings money for investment and wishes to apply for permission to acquire land for residential purpose, shall lodge an application (Alien 4 Form) to the competent official under section 71 of the Land Code together with the following documents:
1.1 An alien identification card issued by the Police Station in whose jurisdiction the foreigner is domiciled or a certificate of residence issued by the Immigration Division, National Bureau of the Royal Thai Police Force or a passport indicating the nationality of the foreigner.
1.2 Evidences of an investment in the business or activity that falls under Ministerial Regulation prescribing rules, procedures and conditions concerning the acquisition of Land for residential purpose by aliens B.E. 2545.
1.2.1 Letter of investment confirmation from bond seller and bonds of Thai Government, bonds of Bangkok of Thailand, bonds of State Enterprise or bonds which the Ministry of Finance secures the capital or interest.
1.2.2 Letter from the Asset Management Company confirming that an alien has invested in property mutual fund, property mutual fund or mutual fund for resolving financial institution problems established under the law on Securities and Stock Exchange, and an evidence of investment in such fund.
1.2.3 Evidences concerning investment in share capital of a juristic person who is granted promotion of investment under the law on promotion of investment, certificate of registration as a juristic person, name list of the juristic person’s share holders, and a certificate indicating that such juristic person is granted promotion of investment from the Board of Investment.
1.2.4 Evidences of engagement in an activity that entitles for being granted promotion of investment under the law on promotion of investment according to the announcement made by the Board of Investment, certificate of registration as a juristic person, name list of the juristic person’s share holders, and the Board of Investment’s letter indicating that an activity being operated entitles for being granted promotion of investment.
The evidences mentioned in paragraph. 1.2.1 – 1.2.4 either the evidence in one paragraph, or one combined with the other(s) can be used but the total amount shall be not less than forty million Baht.
1.3 Evidences of bringing a foreign currency into the Kingdom or the withdrawal of the money from a foreign currency account or from a non-resident Baht account for investment.
Either one or more of the above mentioned evidences can be used but the total amount shall be not less than Baht forty million.
1.4 In the case of the land to be acquired is not located in Bangkok Metropolis, Pattaya City or Tessaban (Municipality); the letter of confirmation from the Provincial Office of Town and Country Planning is required certifying that the land to be acquired is located within a residential zone under the law on Town Planning.
1.5 Letter of Ministry of Defense or of the agency concerned confirming that such land is not located in a military safety zone under the law on Military Safety Zone.
1.6 The sketchy map showing the location of land seeking for permission.
1.7 In the case where an applicant has already had right on land by the time the application is being lodged, an applicant shall produce such land right document.
2. A person who is granted permission shall maintain the investment period not less than five years. He/she is required to produce the evidence of possession in the investment in 1.2 as the case may be as current, which shall be not less than Baht forty million, to the competent official according to section 71 once a year, on five consecutive years and each year shall be no later than the date making the acquisition registration of the aforementioned land.
3. A person who is granted permission shall utilized such land for a residential purpose of his/herself and the family in a way that is not contrary to the local custom or good living of the local community.
4. A person who is granted permission shall inform such land utilization for a residential purpose to the competent official of land office according to section 71 within sixty days as from the date of utilization.
5. A person who is granted permission shall facilitate the competent official supervising the use of such land to ensure that the utilization is in accordance with rules and conditions prescribed in the law once he/she receives the written notifications from the competent official under section 71.
6. If a person granted permission withdraws an investment in the business or activity before the due date of investment in 2, he/she shall inform in writing to the competent official according to section 71 within sixty days as from the date of making the withdrawal.
7. A person granted permission shall utilize such land for residential purpose within two years as from the date of the land acquisition registration.
8. If a person granted permission does not comply with the rules and conditions in 2-6, the Director General shall have the power to order such person to dispose of the land in a portion of his possession within the period of not less than one hundred eighty days and not more than one year. If the time limit elapses the Director General shall have the power to dispose of such land. Also, if the person does not comply with the condition in 7, the Director General shall have the power to dispose of such land.
9. Any foreign language document shall be translated into Thai language. The translation shall be certified according to the Ministerial Regulations (B.E. 2540) issued under the Purview of Administrative Procedure Act B.E. 2539. (Phraratchabunyat Vithipratibut Ratchakarn Thangpokkhrong B.E. 2539)
10. In case of a person bringing money into the Kingdom to the amount of Baht forty million for investment and has bought the land less than 1 rai, if later and within the period of investment, that person wishes to buy additional land, in this instance, the documents attached to the current investment can be used along with the application for acquisition of the additional land.
|LAND MEASUREMENT CONVERSION FOR THAILAND
|Land in Thailand is measured in rai, ngan and wah. Land prices are expressed in baht per rai or baht per wah for smaller plots. The tables below will help you convert measurements:|
|1 sq. wah = 4 sq. m.
1 acre = 2.471 rai or 43,560 sq. ft.
1 ngan = 100 wah or 400 sq. m.
1 hectare = 6.25 rai or 10,000 sq. m.
1 Rai = 4 Ngan or 1600 sq. m.