Bangkok Apartments | Bangkok Condos | Bangkok Serviced Apartments

Just the thought of Bangkok would often give people the chills and the thrills of its majestic tourist spots. It wasn’t named as Thailand’s “City of Lights” for nothing. In fact it is also referred to as the “Venice of the East” during the time when its primary means of transportation was by boat. Bangkok definitely is a palette of different colors—from its authentic Asian cuisine, its floating markets where rowboats carry an assortment of fruits and vegetables, the famous “Reclining Buddha”, the monks walking barefoot in the streets begging for alms, to the ever growing economy that is not only Thailand’s commercial capital but also as the key center of Asian business.

Bangkok is definitely a place to be. Recently, it has been reported that there was a large influx of foreign immigrants, long-term residents, and expatriates from all over the world that have chosen Bangkok as their home or business location. As consequence, real estate has also become a rising industry as the population is in need of a home. The most practical choice, even elsewhere in the world, is getting a condominium.

It is only right that you take time in considering important factors before buying a condominium so you will get your money’s worth and the location that fits your needs. After all, getting a condo unit is a rather simple process in Thailand once you equip yourself with the proper documents. There may be some challenges in certain aspects of the transactions particularly when the terms and conditions of the Sale and Purchase Contract are still being drafted and negotiated for. A foreign buyer could easily solve this issue though by hiring professional advice from a lawyer who is experienced with handling property transfer and property contract drafting. Before closing any contract, one should make sure that the contract contains the number of the unit being purchased to avoid future conflict or confusion.

This is only the tip of the iceberg so read on to learn more on how to pick the best condominium unit just for you.

Choosing a Condominium

• Setting up a Business. In Thailand, applying for a license to run a business requires a registered office address. It is recommended that you inquire first if the condominium allows the use of the address for business purposes. Otherwise, it is not a good option because most condominiums have a regulation that allows the use of the address for residential purposes only.
• Reliable Developer. One the most important factors to consider is checking the background of the developer. There have been cases that deposits were already paid but the condominium remains inhabitable, incomplete, or simply the developer failed and was not able to start the project. Protecting yourself from scams should be at the top of your list as there is no existing legislation for escrow accounts in Thailand. Taking legal action is only futile because there is no way that your deposit can still be retrieved. It is best then for you to buy a pre-owned unit or to simply buy a unit from a building that is already built.
• Location. Like in any other place, location is always a big factor to be taken into account in real estate. If you want to live in the condominium it is must that you think of accessibility of the place to your office or if you have children, consider its distance from a good school. You may also find it convenient being in a building near the main road especially if you have to commute by means of public transportation or a cab. Its distance from the shopping centers might be a another aspect that you’d like to explore or if you are up for good views you might want to consider if the building is not obstructed by some construction or unwanted neighborhood.

Inspecting the Unit

• Traffic. Check the traffic condition of the area where you plan to acquire a condominium unit. The best way to do this is by observing the situation during rush hour.
• Fire Safety. First off, make sure that the floors are sealed off to prevent fire from rising to other floors. You may know this by identifying the type of material used to divide each floor. Then, inspect the jockey pumps to make sure that there is enough pressure in the sprinkler system. Visiting the mechanic plant room would actually be worthwhile. Also determine if the alarm system is functioning and if the fire exits aren’t blocked by any type of materials.
• Floods and Leaks. Check for any signs of leaks in the ceilings or the windows. This would be easy enough since you would only see if there are discolored areas or surfaces that show water passage. One good way of knowing if the area is flood prone is by checking for sandbags and tidemarks on the outside walls.
• Parking. Determine if there is fixed parking space for your or not when you have a car or if you are planning to get one. You don’t want to get into trouble in safeguarding your car.
• Legal. It is best that you secure a copy of the Condominium Juristic Person (CJP) accounts and verify the credential of its management. Know the CJP charges and the number of accounts receivable.
• Demographics. Inquire about the ratio of foreign owners to its local counterparts. Remember that not more than 49% of the total unit space (sealable area apart from the common areas of the condominium) can be owned by foreigners.

Preparing the Required Documents

• Buyer

• Seller/Broker

• Buying on behalf of a company

It is a different case altogether if you are buying a condominium on behalf of a company as required documentations become more extensive and the process becomes more complicated.

Transferring ownership rights
The process of registering a condo transfer may take about three hours. Normally, the sales agent or the broker will carry out the transfer in the name of the buyer if the condo is newly built. If not, then the buyer needs to attend personally to ensure that the transfer goes smoothly.

Here is a checklist that you can follow on the transfer date:

• The buyer should present cash and/or a cashier’s check made payable to the seller to cover the purchase price, official price and taxes (if applicable).
• The Land Office will then issue an amendment of the title deed and once the transfer is complete, return the owner-amended title deed and along with it should be the receipts for government fees and taxes and an official version of the Sale and Purchase Contract.
• The foreign purchaser’s name, in correct spelling, should be reflected in the title deed before the payment is handed to the seller.

Transferring the Funds
There is no limit as to what currency you are using when you purchase a property. The currency though must be transferred to Thailand as a foreign currency by a handling bank in Thai Baht along with a proof that the funds have been remitted from overseas in foreign currency. It is only then that the Land Department will allow the transfer of ownership to the foreign buyer so long as the amount is equal to or slightly higher that the declared purchase price.

Below is an example of document attached to a Telex-Transfer (T/T). It may contain the purchaser’s name. It could also bear the receiver or the sender’s name in it.

Example: Mr. Jay Richards would like to inform you of his intent to buy a condominium in Thailand. This is a declaration that he is transferring funds from an overseas bank to a bank in Thailand. Please issue a document, under his name, that will prove that he is the sender of this said amount.

The buyer may also appoint a third party to purchase the property for him if the buyer identifies the third party as legal entity to receive the transferred funds.

Obtaining a Foreign Exchange Transaction Form (FET Form)
As already mentioned in the above text, the funds to buy a property should be transferred into the country as foreign currency by accomplishing an FET Form. This is accordance to the Condominium Act B.E. 2522 of 1979.
The EFT will contain the following information:

• The amount transferred (in foreign amount)
• The amount transferred (Baht equivalent)
• The sender’s name
• The receiver’s name
• The purpose of the transfer

FETs in general can only be issued if the amount be transferred is more than $20,000. A credit note or an advice from the bank will be needed otherwise. When the money is transferred, the buyer should include an instruction or a notice that the amount is for the purpose of purchasing a condominium. For foreigners with permanent residence, this whole process could totally be skipped as they are allowed to purchase in Thai Baht so there is no need for the FET.

FET is needed for a transfer so that the Bank of Thailand can control the flow of foreign currency and at the same time account the source and purpose of every single Baht. Since the Department of Land is bound by this rule, any foreign buyers must transfer money from abroad if they wish to acquire a condominium unit.

Another reason is the tax exemption of non-residents who’d sell the property out of the country. The tax-free amount is based on the initial transferred amount. Without this exemption, the normal tax rate is around 30%.

Getting a condominium for non-resident workers
Workers that are not citizens of Thailand are allowed to purchase a condominium in Thai Baht after a bank issues a document to guarantee that the money was indeed withdrawn from a non-residential account.

A mortgage loan may be granted by some Thailand banks to non-residents who have appropriate working permits or long-term contracts. Automatically, non-residents who do not work in Thailand are ineligible.

However though, there is a rule that for purchases equal to or beyond 5,000,000 baht, an FET must still be acquired by the working non-resident. The money must be transferred from overseas in any foreign currency. The 5 million baht will be deposited to the non-resident’s bank account until such time that the ownership transfer is complete. Depending on the purchaser’s agreement, the full amount may then be transferred back or may be used to pay the outstanding balance of the transaction.

Calculating the taxes and expenses
Upon the transfer, all taxes and expenses should also be assumed automatically unless specified otherwise.

2% transfer fee of the registered value of the property price will apply. In the case that the seller is an individual and not a company, the tax will be calculated in a progressive rate of the registered value. However, if the seller is a limited company, 1% of the registered value or appraised value (whichever is higher) of the property price will apply.

If exempt for business tax, 0.5% will apply as stamp duty of the registered value. For entities that business tax is applicable, 3.3% of the registered or appraised value will apply. Business tax shall be payable if the seller sells the property within five years of the purchase registration date. The rule though does not apply if the owner is named as the owner of the condo in the household registration document and sells the condo after one year of the registration date.
It is the purchaser’s responsibility to shoulder the electric bill deposit, water bill deposit, sinking fund (if applicable) and other utilities and amenities.

The taxes and transfer fees are normally paid in cash and could use a cashier’s check only in the instance that the transaction involves large amount of money. The checks should be made payable to the Ministry of Finance.
Repatriating Funds to Foreign Country is closely monitored and may require a long series of paperwork and permits to adhere to the strict Money Laundering Regulations of Thailand.

Now you have a clearer overview of how real estate works in Thailand. Some may be intimidated by the digits and the terminologies but with professional help and reference guides like this one, you’d surely have a high time getting you dream Bangkok home!