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Ownership Explained - The Basics
Foreign nationals who purchase real estate in Thailand can hold property through a variety of ownership structures.
The three most common forms of ownership used by foreigners to hold real estate are leasehold, freehold through a condo title, and freehold through acquisition by a Thai company.
Freehold means that a property can be owned outright in your name forever. Individual units in a condominium building may be owned freehold by foreign nationals.
Leasehold means that the building or land is held on a lease from the land or building owner. The longest registered lease permitted by Thai law is 30 years which will be registered at the Land Department. It is common to contractually agree options to renew the lease for additional extensions beyond the initial 30 year period.
A Thai Company is an indirect means of foreign ownership typically for land and villas but commonly for condominiums as well. There are strict rules in setting up and/or maintaining a Thai Company when foreign nationals are involved.
Which structure primarily depends on the ‘type’ of property (condominium or house/villa) you are interested in purchasing.
Condominium Ownership
In this example, 49 of the total units in this building (or 49% of the total salable area) can be owned outright by non-thai nationals in their name. The ownership titles of these 49 units is referred to as Freehold or Foreign Quota.
This leaves 51 units remaining in the building (or 51% of the total salable). The freehold rights to these units are reserved for Thai nationals in what is commonly referred to as the Thai quota.
It is entirely possible for the Thai quota to exceed over 51% of the total ownership of a buildings salable area but the condominium act states that foreign quota can never exceed 49%.
Villa or House Ownership (Landed Property)
The building (the bricks and mortar) can be owned by a non-Thai national outright in their name in what is called the house registry which secures ownership indefinitely of the structure.
In Thailand non-Thai nationals cannot own land outright in their name. Land can be controlled through either a Thai Company or a long-term registered lease. The longest registered lease term by Thai law is 30 years and most developers will offer 3 terms for a total of 90 years.
These two methods are the most common vehicles for securing land interest in Thailand.
Land titles
“Chanote” or “Nor Sor See” = Freehold Title Deed
“Nor Sor Sam Gor” = Confirmed Certificate of Land use
“Nor Sor Sam” = Certificate of Land Use
Chanote or Nor Sor See
This is a freehold title deed that is based on a survey by the land office (land department) to define which geographical boundary the land title covers. The land boundaries are marked by registered concrete plot markers. As such, the land title will contain an exact description of size and will also contain a history of all registered transactions concerning previous ownership of the land.
The “Nor Sor Sam Gor” or Certified Certificate of Use
This gives the person named the right to use the land, confirming the local authority have approved it. The document also confirms the geometrical survey by the Land Department for the issuance of the Chanote Title Deed have been met and the owner is entitled to apply for an upgrade to receive their official Chanote document.
The Nor Sor Sam or Certificate of Use
The main difference between the Nor Sor Sam and Nor Sor Sam Gor is there are no markers or boundaries confirmed as a survey has not been conducted by the Land Department. Thavorn Pattaya Property advises anyone considering the purchase of Nor Sor Sam to conduct an official land survey to ensure no conflicts exist with surrounding land plots and to identify the exact boundaries of the plot in order to best protect your investment.
Important Points to know
All land title documents will be duplicated, usually one is kept by the land department and the other is kept by the actual owner of the land. Any mortgages, long term leases, rights of superficies and charges will be registered on the back page of the land title deed with the exception of the physical building or structure.
Maintenance fees (CAM Fees)
The maintenance fees covers general up-keep and repair of the shared or common areas such as swimming pool, gym, reception, gardens, elevators, security staff, walkways and other communal shared areas. It also covers bills for common areas and window cleaning fees.
These typically range from 20 to 70 THB per square, although can go higher for bigger projects with a wider and more luxurious selection of facilities or required upkeep.
The maintenance fee typically does not cover cleaning or major repairs insides your actual property. In some cases it does cover basic repairs, but you will need to check with the management company and the agreement.
Selling Fees / Commission
This is typically paid at the time of transfer when you have secured and received the full payment on your property. In some cases, Thavorn Pattaya Property will hold the buyers deposit and we will deduct any outstanding commission from this amount or alternatively a cheque will be required to pay us at the land office at the time of successful completion and transfer.
Transferring funds into Thailand (FET - TT3)
The FET (foreign exchange transfer form) also known as TT3 is the official form required to transfer over 20,000 USD into Thailand in any currency in order to purchase a property. The proper issuing of this document is required in the future event of selling the property as it will facilitate you transferring the funds out of Thailand. For all other payment methods, you will be required to obtain a payment slip to be used as supporting documentation when you eventually transfer money back to your home country.
If over 20,000 USD into a developers bank, they can get the TT3 form for you.
If under 20,000 USD into the developer banks then the developer will get a payment slip from the bank instead of the TT3/FET form.
If over 20,000 USD into your account in Thailand and then to the developer - you will need to get the TT3 from your bank
For all other methods of payment, you will be required to get a payment slip from the bank you use as a supporting document (instead of the FET/TT3 form)
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