Buy a condo from a local

[Tayida]

1) How it works if i want buy a condo from a Thai person?

2) What about taxes?

Thank you.

[Peterw42]

Foreigners can only buy 49% of any condo block, "the foreign quota". If a condo is already owned by a Thai person, its in the 51% thai owned half of the block. It would depend if there is foreign quota available (less than 49% already foreign owned) if you could purchase it as a foreign quota condo. If quota available in the block, its a straight forward normal sale.

 

Transfer fees and taxes are around 2-5% (depending on seller circumstances) and usually shared 50/50, buyer seller.

[The Hammer2021]

It works just the  same as if you were  burying off a foreigner

[tomazbodner]

Depends where you're buying. There's not much of a difference from buying as a Thai, but here's the procedure:

- the juristic office will need to provide 2 letters, one is that the unit is free of debt and the other will be the list of all foreign owners with percentage of residential space they occupy (it's a table with owner name, nationality, size of unit in m2, and % of total space). With your unit included, the % must not exceed 49% of total residential space.

- if you have PR you don't need this, but if you don't, you will need to transfer funds from abroad and get a slip from bank to attest to that

- you would sign a contract and pay down-payment, probably stating in contract that the rest would be paid in 30 days or alike

- If seller has a bank loan, you will need to get information on how much bank loan is outstanding. You would make cashier's cheque for outstanding loan to the bank's name, and the rest for the seller (and if any agent is involved, separate agent cashier's cheque)

- On the day of transfer at the land department for the area, seller (and bank, if any involved) would meet up with all this paperwork, and inspected by the officer, and then type up official transfer document and update chanote. At that time you would pay taxes (2%, usually split 50/50), and if seller had property less than a year, a business tax (usually that's seller's responsibility). Pay that cash as there's fee to cash cashier's cheque.

- You would get chanote and the transfer paper

- The unit is now yours, and you'll need to go to EGAT office to change the name on the electricity meter to your name, and pay meter deposit

- You would then inform the juristic office of condo that you are now owner of unit and present the paperwork so they register you in their system for the maintenance fees, voting rights, parking / entrance cards, condo apps etc. and remove the previous owner.

 

If you have PR you do not need to get funds from abroad. Else it's the same procedure. You can also get bank loan to buy unit, in which case it's just like taking normal loan, but the difference would be at land department, you will only get copy of chanote, while the original will be kept with the bank until loan is paid off.

 

Once all this is done, you can go to khet and put your name in yellow book (no PR) or blue book (PR) and get your pink ID card.

Edited May 10, 2022 by tomazbodner
clarification for first sentence: only areas extremely popular with foreigners would have challenge with exceeding 49% foreign quota

[Delight]

Given that the foreign allocation is used up -and you do not wish to buy it in a Thai name -then the only option that I can think of is to put it into  Thai company.

Pros

Very cheap when selling-no transfer fees.

Much simpler and much lower cost should you wish to bequeath the apartment to a foreigner

Cons

The company has to be audited ever year . About 10,000 Baht

 

Will the government outlaw the practice?

 

I attach a document giving more detail of the procedure

property via company - no third parties.docx

[scubascuba3]

17 minutes ago, Delight said:

Given that the foreign allocation is used up -and you do not wish to buy it in a Thai name -then the only option that I can think of is to put it into  Thai company.

Pros

Very cheap when selling-no transfer fees.

Much simpler and much lower cost should you wish to bequeath the apartment to a foreigner

Cons

The company has to be audited ever year . About 10,000 Baht

 

Will the government outlaw the practice?

 

I attach a document giving more detail of the procedure

property via company - no third parties.docx 11.25 kB · 0 downloads

Quite a big con if you sell the property out of the company, the cost is written down every year so when you sell there's much greater profit which you pay tax on

[Yellowtail]

On 5/12/2022 at 11:30 AM, scubascuba3 said:

Quite a big con if you sell the property out of the company, the cost is written down every year so when you sell there's much greater profit which you pay tax on

How does a company profit by selling an asset for the same or less than the book value? 

[scubascuba3]

3 hours ago, Yellowtail said:

How does a company profit by selling an asset for the same or less than the book value? 

what's your definition of book value?

[Peterw42]

3 hours ago, Yellowtail said:

How does a company profit by selling an asset for the same or less than the book value? 

Because there is depreciation applied each year of ownership.

Look up thai withholding tax, its a complex formula that involves years owned, depreciation etc.

[Yellowtail]

8 minutes ago, scubascuba3 said:

what's your definition of book value?

The value of the asset as listed in the company's book. 

 

For example, is a company buys an asset, it is listed with the rest assets at the full cost. The next year, the value would change to the cost minus one year's depreciation, and the year of depreciation could be deducted as an operation cost. 

[scubascuba3]

3 minutes ago, Yellowtail said:

The value of the asset as listed in the company's book. 

 

For example, is a company buys an asset, it is listed with the rest assets at the full cost. The next year, the value would change to the cost minus one year's depreciation, and the year of depreciation could be deducted as an operation cost. 

Right so the cost would reduce each year, it's likely the sales proceed would be greater but if not you lose either way