Requirements for incoming foreign currency transfer to buy a condominium

[jojothai]

Back 15 to 20 years ago when i bought condominium units with farang ownership as a farang, I always had to show the source of funds transferred.

The rule I was told at the time was that the transfer had to state the property you were buying. Then I got a certificate from the bank that was needed for the transfer.
Its possible that it may have been relaxed in the last 15 years.
I believe the requirement came from the Condominium act of 1979, but i may also have been due to foreign currency controls.

I have looked at the condominium act 1979 and changes in 2008 and conclude that it may not be necessary if you are a resident permitted under immigration law. 
Refer Section 19 below. Would I qualify under item (1) below and then not need to satisfy item (5).
 

Section 19.    Alien person, or alien juristic person, may own condominium unit provided that such alien person or alien juristic person of the following qualifications:
(1)    Alien person permitted to resident in the Kingdom under Immigration Law.
(2)  ......     (3) ......       (4) ........
(5)    Alien or Alien Juristic Person who brought foreign currency into the Kingdom or withdrew the money from their bank account in baht currency of foreign residents, or withdrew their deposit bank account from foreign bank.

 

Section 19. ter dictates that :     The alien person or alien juristic person shall also be required to present the evidences to the registered official:

 

I am resident on a work permit and considering buying a condo again.

Want to find out if it is still necessary for me to declare the purpose and property details on a incoming foreign currency transfer. then get a bank certificate to present as evidence.

I have not searched all the posts here yet.
Grateful if somebody who knows can clarify / confirm recent experience.

[blackcab]

19 minutes ago, jojothai said:

I am resident on a work permit

 

Do you hold Permanent Residency with the appropriate Permanent Resident's book? You will know if you do, because applying is a costly, multi-year process.

 

This is what the law refers to.

 

If you are working and you have a Non Immigrant O or Non Immigrant B visa then you are not resident in the Kingdom as far as this law is concerned.

[scubascuba3]

I bought a condo recently and had to provide the letter from the bank, saying money was from abroad and Condo I was buying 

[OneMoreFarang]

2 hours ago, scubascuba3 said:

I bought a condo recently and had to provide the letter from the bank, saying money was from abroad and Condo I was buying 

Do you know what happens if you want to buy condo A, then you transfer your money to Thailand but for whatever reason you don't buy condo A. Can you then buy condo B with that money? Or is that additional hassle?

[scubascuba3]

8 minutes ago, OneMoreFarang said:

Do you know what happens if you want to buy condo A, then you transfer your money to Thailand but for whatever reason you don't buy condo A. Can you then buy condo B with that money? Or is that additional hassle?

Probably additional hassle explaining what happened to Bank and getting a new letter. Bangkok Bank included what condo I was buying. I guess you could transfer money and only getting letter just before going to land office

[jojothai]

18 hours ago, blackcab said:

 

Do you hold Permanent Residency with the appropriate Permanent Resident's book? You will know if you do, because applying is a costly, multi-year process.

 

This is what the law refers to.

 

If you are working and you have a Non Immigrant O or Non Immigrant B visa then you are not resident in the Kingdom as far as this law is concerned.

Thanks, that helps to clarify the condition no 1).
I dont have PR. Therefore assume I still need the bank certificate of transfer, as noted by scubascuba3

[jojothai]

16 hours ago, OneMoreFarang said:

Do you know what happens if you want to buy condo A, then you transfer your money to Thailand but for whatever reason you don't buy condo A. Can you then buy condo B with that money? Or is that additional hassle?

Yes, additional hassle for sure.
Knowing the way some of black and white rule brigade work here you may have to transfer it back out and in again. ????

[Delight]

 To answer the OP

 

The condo  Act 1979 and the revision 2008 are the same with respect to your forthcoming transaction

 

1) Select your purchase and negotiate a deal

 

2) Bring in the monies to suit the terms of the transaction

3) Prior to transfer at land office -obtain the FET

[dsj]

When I bought a Condo in 2009 and 2013, all I did was wire transfer funds to my Thai Bank account with the explanation of buying a condo, and I didn't even need to show a letter from the Bank at the land title office. The only thing is the money I transferred had to be equal or greater than the purchase price.

[newnative]

On 2/3/2021 at 7:11 PM, OneMoreFarang said:

Do you know what happens if you want to buy condo A, then you transfer your money to Thailand but for whatever reason you don't buy condo A. Can you then buy condo B with that money? Or is that additional hassle?

    When you transfer money from abroad it does not need to be for a specific condo--I've transferred money without having decided what condo to buy.  You do need to specify on the transfer that it is for a condo purchase.   Should not be a hassle to get the bank letter.   

[scubascuba3]

4 hours ago, dsj said:

When I bought a Condo in 2009 and 2013, all I did was wire transfer funds to my Thai Bank account with the explanation of buying a condo, and I didn't even need to show a letter from the Bank at the land title office. The only thing is the money I transferred had to be equal or greater than the purchase price.

and that was foreign quota? not company name?

[OneMoreFarang]

4 minutes ago, scubascuba3 said:

and that was foreign quota?

It seems you know what you are talking about.

What is this "foreign quota" about?

I read this on many property pages but without much explanation.

I know in a condominium foreigners can own less than 50%. But as as far as I understand it is not the case that some units are reserved for Thais and others for foreigners. I think foreigners can buy any unit as long as the total in the condominium is less than 50%. Correct?

Maybe you can explain what this foreign quota is about or maybe you have a link.

Thanks

[scubascuba3]

3 minutes ago, OneMoreFarang said:

It seems you know what you are talking about.

What is this "foreign quota" about?

I read this on many property pages but without much explanation.

I know in a condominium foreigners can own less than 50%. But as as far as I understand it is not the case that some units are reserved for Thais and others for foreigners. I think foreigners can buy any unit as long as the total in the condominium is less than 50%. Correct?

Maybe you can explain what this foreign quota is about or maybe you have a link.

Thanks

You should buy foreign quota (49% max) don't get talked into buying through a dodgy Thai company (Thai quota), foreign quota often sells for a higher price once the foreign quota (49%) is full. Recently I bought from a Thai company and as there was foreign quota left it was transferred to my name at the land office. Many people don't realise that..... you can buy Thai quota if there is sufficient foreign quota left. Clear as mud? 

[OneMoreFarang]

1 minute ago, scubascuba3 said:

You should buy foreign quota (49% max) don't get talked into buying through a dodgy Thai company (Thai quota), foreign quota often sells for a higher price once the foreign quota (49%) is full. Recently I bought from a Thai company and as there was foreign quota left it was transferred to my name at the land office. Many people don't realise that..... you can buy Thai quota if there is sufficient foreign quota left. Clear as mud? 

Sorry, yes, clear as mud.

 

If I buy then I want it definitely in my name, no company name.

I am sure there are many condominiums which have, let's say, 30% foreigners owning the units.

But there are still units to buy which show in the description foreign quota or Thai quota. So what does that mean?

If I like an apartment which is currently Thai quota, can I buy it in my name? Or does it have to be first "converted" to foreign quota, or how does that work?

I am only interested in "old" buildings, not one of those very expensive new developments.

[AlfHuy]

Kasik...  Pattaya.

Leave it there for a few months and your worth will go up like a rocket. Soon, you are able to buy 2 condos.

[scubascuba3]

55 minutes ago, OneMoreFarang said:

Sorry, yes, clear as mud.

 

If I buy then I want it definitely in my name, no company name.

I am sure there are many condominiums which have, let's say, 30% foreigners owning the units.

But there are still units to buy which show in the description foreign quota or Thai quota. So what does that mean?

If I like an apartment which is currently Thai quota, can I buy it in my name? Or does it have to be first "converted" to foreign quota, or how does that work?

I am only interested in "old" buildings, not one of those very expensive new developments.

In the 30% example it just means a foreign name person is selling one, Thai quota means Thai person but could be company also but they usually kick off once foreign quota is full. If you buy in your name it's simple, at land office the new name is you and the condo office records you as foreign quota. In the 30% example you can buy Thai or foreign quota, no advantage in buying foreign quota in this case as both will have your name and so foreign 

[Cricky]

I bought a condo 2005.
Transferred the funds from Australia and received my TorTor3.

I sold this condo recently and asked for a document saying I am eligible to buy another condo without transferring more money from Australia.
I was told I must bring in more money from abroad to get a new Tortor3.

 

Anyone been in this situation?
Is this true?

[dsj]

5 hours ago, scubascuba3 said:

and that was foreign quota? not company name?

Yes it was foreign quota, and in my name only.

[thedemon]

7 hours ago, OneMoreFarang said:

If I like an apartment which is currently Thai quota, can I buy it in my name? Or does it have to be first "converted" to foreign quota, or how does that work?

I am only interested in "old" buildings, not one of those very expensive new developments.

 

Yes you can as long as the 49% maximum has not been reached.

 

This only really an issue in Phuket and Pattaya. In Bangkok there are only a handful of buildings that have ever reached that threshold.

[thaibook]

If one has to show a letter from the bank with the amount transferred this presumably will show the price actually paid.  How can the land office then record a lower price for tax purposes or if they don't how can they nonetheless do so for the next transaction in the same building?  I have never know a purchase to record the actual price paid.  Usually cheques of the public agreed amounts are exchanged and then the baance is paid.

 

 

[scubascuba3]

1 hour ago, thaibook said:

If one has to show a letter from the bank with the amount transferred this presumably will show the price actually paid.  How can the land office then record a lower price for tax purposes or if they don't how can they nonetheless do so for the next transaction in the same building?  I have never know a purchase to record the actual price paid.  Usually cheques of the public agreed amounts are exchanged and then the baance is paid.

 

 

The letter will show the amount of the transfer, not purchase price. As for taxes, the valuation is based on Land office figures for all condos in the block, not what the purchase price was. For my recent purchase that figure was higher than the purchase price. Condo office should also have a copy 

[jojothai]

10 hours ago, thaibook said:

If one has to show a letter from the bank with the amount transferred this presumably will show the price actually paid.  How can the land office then record a lower price for tax purposes or if they don't how can they nonetheless do so for the next transaction in the same building?  I have never know a purchase to record the actual price paid.  Usually cheques of the public agreed amounts are exchanged and then the baance is paid.

 

 

If I recall correctly the purchase price is put on the transfer document at the land office and is used for the transfer tax.
However I believe that people make the amount declared lower to reduce the transfer tax.

I presume thats as low as the land office will allow, compared to their own valuation.

Somebody can clarify this if I am wrong, but that's what happened on purchase i made in the past.
So if that's the case, the land office don't get and record the actual price paid.

Edited February 7, 2021 by jojothai
add info

[thedemon]

2 hours ago, jojothai said:

If I recall correctly the purchase price is put on the transfer document at the land office and is used for the transfer tax.
However I believe that people make the amount declared lower to reduce the transfer tax.

I presume thats as low as the land office will allow, compared to their own valuation.

Somebody can clarify this if I am wrong, but that's what happened on purchase i made in the past.
So if that's the case, the land office don't get and record the actual price paid.

 

Yes that's correct. The declared transfer price can be higher than the land office valuation but not lower.

 

It is sometimes quite surprising how blatant the under-declaring can be. The land office seems to just turn a blind eye. I bought a condo with a bank mortgage so the bank's representative was present at transfer to hand over the cheque to the seller, have the mortgage registered and take possession of the title deed. But the seller still managed to under-declare the sales price right under the land officers noses even though it was obvious by the amount on the bank cheque.

 

That is probably one of the reasons that a position at the land department is often considered lucrative.

[OneMoreFarang]

1 hour ago, thedemon said:

 

Yes that's correct. The declared transfer price can be higher than the land office valuation but not lower.

 

It is sometimes quite surprising how blatant the under-declaring can be. The land office seems to just turn a blind eye. I bought a condo with a bank mortgage so the bank's representative was present at transfer to hand over the cheque to the seller, have the mortgage registered and take possession of the title deed. But the seller still managed to under-declare the sales price right under the land officers noses even though it was obvious by the amount on the bank cheque.

 

That is probably one of the reasons that a position at the land department is often considered lucrative.

What is the difference of the payment?

I.e. they real condo sales price is 10 million, it is declared as 5 million (or what would be "realistic"), how much money is saved by whom?

[scubascuba3]

Just now, OneMoreFarang said:

What is the difference of the payment?

I.e. they real condo sales price is 10 million, it is declared as 5 million (or what would be "realistic"), how much money is saved by whom?

Usually the transfer fees tax is shared 50/50, the level of tax depends how long the condo has been owned plus is owned by Thai company or not. As for the valuation shenanigans, I don't know 

[thedemon]

14 minutes ago, OneMoreFarang said:

What is the difference of the payment?

I.e. they real condo sales price is 10 million, it is declared as 5 million (or what would be "realistic"), how much money is saved by whom?

 

There is no hard and fast rule about that. It depends on how recently the land/condos in that area have been reappraised.

 

In the case of land I have seen situations where the appraised value is only 25% of market value. I don't have enough experience with condos to say what the difference might be but suspect it would be much less since condos don't tend to appreciate in value to the same extent that land sometimes does. 

 

The condos I bought were in an old building and the seller was transferring about 10 units all at the same time. I can't remember what the declared value was because the seller paid the transfer fees so it didn't affect me but because the building is old there is a better chance that the land department's value is lower than market price

[Delight]

On 2/5/2021 at 11:06 AM, OneMoreFarang said:

Sorry, yes, clear as mud.

 

If I buy then I want it definitely in my name, no company name.

I am sure there are many condominiums which have, let's say, 30% foreigners owning the units.

But there are still units to buy which show in the description foreign quota or Thai quota. So what does that mean?

If I like an apartment which is currently Thai quota, can I buy it in my name? Or does it have to be first "converted" to foreign quota, or how does that work?

I am only interested in "old" buildings, not one of those very expensive new developments.

By law every Condominium must have a Condominium Juristic Manager(JPM).

 

 

At the historical point when the building was converted from being just a building to a Condominium Juristic Person then all the apartments were in Thai names-i.e the name of the developer.

The developer in conjunction with the JPM will allocate  Foreign ownership -typically on a 'first come first served basis'

The transfer process takes place at the land office.

 

 

Foreign ownership  being 49% of total space for sale.

 

Some developers pre -designate certain apartments as being  in the 49%. Different prices are often quoted.

 

Given that a  Condo. is neatly in the  51/49 ratio-it could -in theory-stay that way forever.

In practice the  Thai owned will increase   and the foreign owned will decrease.

This is because  Thai widows (formerly wives ) inherit from foreign (now deceased) husbands.

So the actual  ownership ratio increases in favour of Thai .

However-

The 49% is still valid.

 

 

 

The condo that you have an interest in is-as you state- not in a foreign name.

It  is  possible  that spare allocation could be available in the foreign allocation 

You will have to approach the JPM.

In this regard-possibly- the older the condo the better. More Thai widows