Importance of Property Title Transfer in Thailand
When it comes to buying a property in Thailand, the most important thing to consider is that the land has a proper and legally issued title deed. This is the official document administrated by the Land Department which states and proves a person’s legal right to own or possess a piece of land, its survey status, rights, obligations, or mortgages on the property as well as the right to dispose or encumber the land.
There are a number of different types of land title deeds in Thailand including the freehold ‘Chanote’, which is the highest possible land title deed that offers full private ownership. ‘Chanote’ land titles are the most preferred and are often used as a benchmark to measure against when it comes to real estate investment in Thailand.
The ‘Nor Sor 3 Gor’ (NS3G) is the next level of land title deed that is available to purchase and is also a very viable choice for buyers who wish to own land in Thailand. NS3G land titles are not as ‘freehold’ as the ‘Chanote’ or ‘Nor Sor 3 Gor’ and require further investigation to confirm the land boundaries with neighbouring plots.
During the transfer process, there are a number of taxes that will need to be paid to ensure the smooth and timely completion. These include:
A Transfer Fee: 2% of the registered value; this is paid at the Land Office on the day of the transfer. Specific Business Tax: 3.3% of the appraised value or selling price (whichever is higher).
Stamp Duty: 0.5% of the appraised value; this is paid at the Land Office. The final cost can vary based on the complexity of the property and the amount of paperwork that is required.
If the buyer is a foreigner, he must have an official power of attorney that has been approved by the Thai Land Department. Other forms of power of attorney are not acceptable and will likely result in a lengthy delay in the transaction.
The power of attorney should be signed by both the owner and the person transferring the title deed and it must be in Thai script. The official power of attorney can be obtained by contacting a local legal firm or the Thai Land Department.
There is also a special type of power of attorney called an ‘Official Power of Attorney’ which is only valid for use with the Land Department and requires a great deal of detail about the property being transferred as well as the people involved in the transaction. This is a very important document and one that should be carefully crafted by a professional in order to ensure the smoothest and most effective transaction possible.
Once all the above is done, the new owner can now register their name on the property title deed. This will officially change the property’s ownership to them and they will receive a receipt for the transaction.
Buying a Condominium in Thailand
The laws in Thailand restrict non-citizens of Thailand from owning land. However, visitors and business people who wish to own a home can buy a condominium or similar smaller properties. According to Thai law, foreign nationals cannot hold more than 49% of shares in any Thai company that owns freehold land. This is also a way to prevent foreigners from owning the land through a company or other business. Thailand is a tropical paradise full of beaches and rain forests. Living here is like being on vacation all year! Speak to a property lawyer in Samui first before signing any property or rental agreements when in Thailand.