Planning a housing purchase in Pattaya, many people imagine only how they will unpack things and have a great time in their new paradise. However, buying a real estate includes a lot of important nuances which should be considered: local legislation, taxes and duties and the form of ownership of real estate. According to the Thai law, a foreigner has several options for the form of ownership of real estate, depending on the type of property. In our article we will tell about the forms of ownership in Thailand, their advantages and disadvantages.
In Thailand, there are two forms of ownership by which a foreigner can buy real estate: freehold and leasehold.
Freehold - this is an unconditional form of ownership, which means property rights for an unlimited period. This means that the owner can dispose of his property as he wants (to sell, give, rent, inherit, etc.) without any permission. A document (Chanot), which is issued in the Land Department of the Kingdom, confirms freehold ownership.
Leasehold is a form of ownership which has a time limit (term - 30 years). It also gives owners all rights to dispose of property, but for a limited time. The owner of the leasehold can extend the contract period 2 times, i.e. for another 60 years. The leasehold object can also be resold, donated, leased, inherited and used during the remaining years. Chanot is also the document which confirms the leasehold ownership and indicates the duration of the contract.
Leasehold reminds a long-term rent, but there is also a fundamental difference. The leasehold facility means that during the issued term the object is fully in your property and you can do whatever you want with it, including repair, redevelopment, sale, etc. Your ownership is guaranteed by the Thai law. The leasehold objects are very attractive for those who want to invest their money in real estate, because their market price, as a rule, is 5-10% lower than the freehold property.
The rates of taxes and fees which must be paid during the transaction also depend on the form of ownership: their amounts differ, but not significantly.
Let’s find out which forms of ownership are issued for different types of real estate objects.
Apartments (condos) in condominiums are perhaps the most popular type of housing among foreigners in Pattaya. According to Thai law, 51% of the living space of a condominium must belong to residents of the Kingdom and can only be sold to foreigners on a leasehold basis. The remaining share of apartments (49%) can be transferred to foreigners in freehold. Such restrictions are also called a quota, and when buying a condo, you should immediately ask whether the quota for housing is sold: Thai (leasehold) or foreign (freehold). Moreover, all services in the condominium (pool, fitness room, playground and others) are considered common property. Residents can use them in equal conditions, regardless of the form of ownership.
Townhouses and villas are often executed immediately under two contracts: the building itself (house) - in freehold, and land - in leasehold. The fact is that the land in Thailand cannot be sold to non-residents, so a leasehold is issued on it. But since the total rental period is 90 years, this nuance will not cause any problems.
You can contact the Real Estate Gallery to learn more about the process of buying property in Pattaya, as well as choose the most optimal option. Experienced specialists will answer all your questions and help to make the right choice. Right now you can book a free transfer to the Real Estate Gallery and get one step closer to your dream!
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