Buying in Thailand
Thailand is a magical country with friendly smiling people and fragrant and exciting food. In recent years it has developed from a back-packer’s paradise into a top-class tourist destination with and excellent facilities to support the glorious sun-drenched tropical beaches excellent diving and now golf resorts.
Mainstream DevelopmentFor a long time Thailand has been the home of ex-pats prepared to live life slightly on the edge, a sort of long-distance Marbella. But massive improvements on infrastructure born of the Thai ‘tiger economy’ of the Nineties make it a country that is now attracting more formal property investment from Northern Europeans, and the British are catching on fast.
Restrictions on OwnershipThere are complications with owning property in Thailand, although they are not insurmountable. It is not possible for foreigners to buy land freehold, they can only buy the buildings on a land that is held on a lease. That lease, however, can be a thirty year renewable lease that can be held for a maximum 90 years, and it can also be sold along with the property. Another way round this is to set up a Thai company, and although foreigners can not own more than 49% of the company, the share structure can be set up so that your 49% have 5:1 voting rights, effectively giving you control of the company.
A further restriction, more relevant to apartment blocks, is that foreigners cannot own more than 49% of a building. So if you are looking at an apartment in a resort, and other foreigners already own half the other apartments, you will not be able to buy. Timeshare arrangements are now being seen as a way round this and although it’s perfectly legal, the complaints about aggressive selling tactics and inflated claims that were the scourge of this industry in Europe are now being seen in Thailand.
Legal Help MandatoryWith all these complications, and the fact that the Thai language has its own alphabet making documents incomprehensible to the untrained, it is vital to get a bilingual Thai lawyer, preferably one not chosen by the seller of the property, involved in the transaction. In the past, property and business transactions involving ex-pats and Thai nationals, particularly those based on personal relationships that subsequently unravelled, have gone sour when the ex-pat subsequently discovers they do not have the ownership rights that they had been led to believe that they had, so it protection in law is vital.
Long-Term or Holiday?As with most developing foreign property locations, investment is polarised into either long-term city-based buy-to-let apartments or seaside resort developments. If the first case, the ‘tiger economy’ stumbled somewhat just after the millennium but economic development is now more restrained but sustainable, and it is now the largest growth market in South-east Asia. Bangkok, the capital is the obvious destination for this market and condo-style apartments are available at a far lower price than established European markets. As Bangkok is often chosen as a base for South East Asia outposts of multinational corporations, there are professional tenants available, and Thailand’s close trade links with China mean that growth is expected to continue.
Resort MarketThe resort-based market is of more interest to the buyers looking for a holiday home that will also be a valuable asset rather than the out-and-out investors. As well as the established tourist resorts islands of Phuket on the west coast and Koh Samui on the east, Pattaya, much closer to Bangkok is seeing a lot of development and growth.
Phuket probably has the best rental market and there are many management agencies that will take care of your property, with detached villas available from around £160,000. Koh Samui is just beginning to take off with a three bed villas starting at £110,000. Pattaya is on the coast of the Gulf of Thailand to the east of Bankgkok and is a lot closer to the new airport there. The island of Koh Chang, further towards Cambodia, is tipped to become a major destination as building begins on low-rise villa developments from around £67,000.
Hua Hin EmergesA further option is Hua Hin, on the east coast of the Gulf but down toward the southern tip of Thailand. This is the fastest growing city in Thailand, has long been the major business and travel junction between Thailand and Malaysia, and will soon gain an express highway that will dramatically drop the transfer times from Bangkok airport. Previously a resort that only the Thai’s really knew about, Hua Hin is increasing in popularity with foreign buyers, with new-build villas starting at £80,000.Take Care, Then Smile!
As with any emerging property market, careful research will be needed to safeguard your investment. But as long as that care is taken, a home in the land of smiles can be yours for remarkably little.