Here’s a lowdown for those making property purchases on two of Thailand’s most popular islands.
by Katherine Walsh.
Just spent a few weeks in “the land of smiles” and fallen under Thailand’s welcoming spell or lived here for years and are looking for the right property to buy but are not sure where to start? Buying property in Thailand can feel daunting as there are many legalities pertaining to the ownership rights of foreigners purchasing property, but the reality is that the process is far easier than many are led to fear. It is indeed true that it is imperative for buyers to ensure they have adequate information about the laws on property acquirements in the kingdom in order to be protected from the common difficulties that are easy to encounter, but an educated buyer should find it simple to avoid any major complications.
Foreign investors looking to spend their hard-earned cash on property on one of the Thai islands will need to begin by getting legal advice from a reliable source. Getting carried away and making a hasty purchase, and being ignorant to the Thai laws that govern the sector will – unfortunately – often see money flushed down the endless pit of non-recoup. Getting a good lawyer is the first step and conducting some personal research is also highly recommended.
Simply put, under Thai law, foreign parties are not permitted to own land, however; they do have the right to ownership of buildings that are separate from the land – such as condominiums. Two of the most popular ways to purchase land as a foreigner (i.e. to be permitted to buy a villa or house as opposed to a condo) is to take out a long term leasehold or to register a Limited Liability company, both of which any good lawyer will be able to advise would-be buyers about in-depth.
However, if creating a Thai company or buying a condominium isn’t appealing as an investment opportunity, leasing a property on a 30-year lease is the next option but note: it is vital for a successor clause to be added. Alternatively, only companies (not people) should enter the lease and this will help buyers to avoid the lease being scrutinized in the event of a person dying.
Foreign nationals are entitled to own the following:
- A building that is individual from the land
- A property that is registered as a condominium
- A leasehold of up to 30 years
Foreign nationals are not entitled to own the following:
- Over 49% of the Thai company that can own the freehold land that a building is built on
- Freehold land
Investors seeking high-end, westernized amenities such as glitzy shopping malls and wild party venues mixed with the beauty of idyllic beaches and lush interior jungle will find Phuket hugely appealing. While anyone seeking a slightly quieter location may prefer Koh Samui, famous for its mountainous backdrops and modern amenities.
Phuket Overview: Arguably the most famous of Thailand’s islands, with its eclectic mix of modernity and natural beauty all rolled into one island. Phuket is home to some of the country’s most luxurious properties, with many villas perched high on the cliffs with views overlooking the ocean.
Hotspots: Areas like Patong, Kata and Karon are popular with anyone looking for a lively, tourist-friendly location, while Chalong, Rawai, Nai Harn, Surin, and Kamala are popular due to their out-of-the-main-tourist-path appeal and beach accessibility.
When to Buy: Some of the best value for money deals crop up during the quieter, rainy season that runs from May to November in Phuket.
Who: Russian investors play a pivotal role in buying property in Phuket, along with Chinese, Americans, and Europeans – especially Scandinavians.
Koh Samui Overview: Koh Samui is Phuket’s biggest rival in terms of island hierarchy. It is home to long stretches of beautiful coastline, modern road systems and bustling town centers, and many of the most sought-after properties are found either on the beaches or in the mountainous jungle with unbeatable vistas.
Hotspots: Chaweng and Lamai are Samui’s main hubs, making them perfect for investors wanting to be close to the action. While Bophut, Maenam, Choeng Mon, Lipa Noi, Nathon and Hua Thanon are ideal for those seeking nature and seclusion.
When to Buy: October to December typically welcome great deals in the property market.
Who: Similar to Phuket – Russians, Chinese and Europeans invest in Koh Samui property with many English, German and Italians taking an interest.
Any investment carries an element of risk, however, Thailand allows investors to safely build on leased land. Show caution when selecting an investment opportunity but bear in mind that the kingdom is now developed enough that adopting the right strategy will ensure an investment is safeguarded. The key? To hire a lawyer, know the Thai law and understand property ownership rights.