Bank Transfer For Property Purchase

[jdrake72]

I have a doubt regarding the bank transfer for condo purchase.

Do I need to tell my Thai bank BEFORE the transfer that I will transfer an ammount of money for a property purchase ?

Or I can transfer the money from Europe now and than when I will be back in Thailand and close the deal, tell the bank that transfer was for the purchase of a condo ?

What happen if the transfer is not exact (for the reason of exchange rate or little change in the price) ?

Thanks

[tangoll]

When you do the transfer at your European bank, you should state on the transfer instructions to the receiving/beneficiary bank (in Thailand) that the purpose of transfer is for purchase of a condominium. That should be sufficient for you to get the Foreign Exchange Transaction Form from the Thai bank. The amount transferred must be greater than the equivalent of US$20,000 to get the FETF. Otherwise the bank will issue a letter in lieu of the FETF. Transfer only foreign currency.

It's very rare that the amount in baht on a single FETF is equal exactly to the amount that is declared as the transfer price at the Land Department Office. The total amount on the FETF(s) that you submit with the purchase must be equal to or greater than the amount declared as the transfer price. So you need to plan the number and amount of the transfers to obtain the FETF's so that the total amount on all the FETF's exceed the transfer price. Once a single FETF has been submitted to the Land Department office, it's gone and cannot be re-used, nor can any excess amount on the FETF's be used again.

Hope this helps.

[ballbreaker]

I am not sure how to word this but is the FETF only required if you should at sometime wish to sale said condo and send funds out of Thailand.

If you have no intention of ever wanting to send money out of Thailand should you sale condo then is the FETF required?

[tangoll]

The main purpose of the FETF is to show to the Land Department office at the time of the transfer of ownership of your purchased condo, that foreign funds had been imported into Thailand for the purchase. Even if you have no intention of ever selling the condo, the FETF(s) are required at the time of transfer of ownership upon purchase. Once the originals of FETF(s) have been submitted to the Land Dept office, they are used and gone.

If ever you sell that condo, and wish to export the sales proceeds out of Thailand, I have been advised by Bangkok Bank that one of several documents needed for the export are the copies of the FETF(s) used at the time of purchase. But I have not had an actual experience with exporting funds out of Thailand, and I'm not sure exactly how the bank would view or use the copies of the FETF(s) because the transfer price at time of sale (on which the taxes/fees are computed) is most likely different from the transfer price at time of purchase (the price which the FETF(s) cover). And if in the future you export more funds, how will the bank know which FETF's have been shown to them before on a prior application for export?

I will soon be doing an actual application for export of funds from Bangkok Bank and if anyone wishes to know how it went, I can later relate the experience here.

[jdrake72]

The main purpose of the FETF is to show to the Land Department office at the time of the transfer of ownership of your purchased condo, that foreign funds had been imported into Thailand for the purchase. Even if you have no intention of ever selling the condo, the FETF(s) are required at the time of transfer of ownership upon purchase. Once the originals of FETF(s) have been submitted to the Land Dept office, they are used and gone.

If ever you sell that condo, and wish to export the sales proceeds out of Thailand, I have been advised by Bangkok Bank that one of several documents needed for the export are the copies of the FETF(s) used at the time of purchase. But I have not had an actual experience with exporting funds out of Thailand, and I'm not sure exactly how the bank would view or use the copies of the FETF(s) because the transfer price at time of sale (on which the taxes/fees are computed) is most likely different from the transfer price at time of purchase (the price which the FETF(s) cover). And if in the future you export more funds, how will the bank know which FETF's have been shown to them before on a prior application for export?

I will soon be doing an actual application for export of funds from Bangkok Bank and if anyone wishes to know how it went, I can later relate the experience here.

thanks tangoll.

So If I understood correctly, my transfer can be higher (but not lower) than the ammount of purchase.

Is that possible for instance if teh condo is worth 2 million baht, have 3 million transfered and get a FETF from my thai bank of 2 million and keep the other million for other expenses or whatever ?

Is that also possible to have an unique transfer for a purchase of 2 condos ?

For example two condos of 2 million bahe each, 1 transfer of 5 million and two FETFs of 2 million eeach, plus 1 million for other expenses (attorney, furniture,...) ?

[tangoll]

jdrake, the answers to your questions: an FETF is issued by your receiving Thai bank, and usually, the Thai bank will issue one FETF for one transfer, worth X foreign currency translated at Y rate equal to Z Thai baht. The total of all the FETF's (Z1, Z2, etc) that you submit to the Land Dept office for each condo purchase must be greater than the declared price to the LD office. This is the paperwork. Whether your Thai bank will issue two FETF's for a single transfer is a question you should ask your Thai bank, but to save yourself trying to ask and explain this to the bank, just work on the assumption that the Thai bank will issue a single FETF for a single transfer.

How you actually use the cash proceeds (the Z bahts) is up to you. So it is best to plan your transfers to get the number of FETF's in the correct amounts that you need for your purchases.

"Is that possible for instance if teh condo is worth 2 million baht, have 3 million transfered and get a FETF from my thai bank of 2 million and keep the other million for other expenses or whatever ?" Yes, of course. You will get one FETF showing 3 million and that FETF can be used to submit to the LD office for a purchase of a condo of 2 million. If you had paid your seller 2 million for the condo, you will still have the one million baht remaining for other purposes. Note though that the FETF for 3 million once submitted to the LD office for the 2 million condo purchase, is gone, and the excess value of the FETF of one million is no longer available to you to use for another purchase of a condo. You still hold the cash of one million; it's just the paperwork value of the FETF is no longer available to use.

"Is that also possible to have an unique transfer for a purchase of 2 condos ?

For example two condos of 2 million bahe each, 1 transfer of 5 million and two FETFs of 2 million eeach, plus 1 million for other expenses (attorney, furniture,...) ?" For this, you need to ask your Thai bank whether issuing 2 or 3 FETF's for a single transfer is possible. It would be easier for you to split up your total amount into 2 or 3 transfers and obtain a single FETF for each split transfer. Note also that even if you get an FETF for a single transfer, you don't have to submit that FETF to the LD office if you are already holding other FETF's from other transfers for a purchase of a condo. You can save that FETF for a future purchase, or never use it at all.

[stgrhe]

I have Bangkok Bank and my branch in Khon Kaen does issue one FETF for each transaction only. However, they do only issue the certificates within a period of three months from the respective transaction date. Furthermore, the oddly enough also issue FETF's for transactions less than an amount that corresponds to USD 20,000.

G.

[currypuff]

Does the Thai bank charge any fee to issue the FETF? If so, how much is it?

[stgrhe]

Bangkok Bank does not charge for this service, at least not my branch in KK.

G.

[tangoll]

Bangkok Bank Head Office branch on Silom Road Bangkok does not charge for issuing the FETF. I was not aware that there is a time limit to when Bangkok Bank will issue the FETF, but in any case it makes sense to obtain the FETF soon after the transfer of foreign funds has been received at the local bank. There also appears to be no expiration date for when the FETF must be used by.

Good to know that only one FETF will be issued for each transfer. The FETF issuing section at the Bangkok Bank office was where I was advised that they only issue FETF's for amounts larger than the equivalent of US$20,000 per transfer.

[PattayaParent]

I have a doubt regarding the bank transfer for condo purchase.

Do I need to tell my Thai bank BEFORE the transfer that I will transfer an ammount of money for a property purchase ?

Or I can transfer the money from Europe now and than when I will be back in Thailand and close the deal, tell the bank that transfer was for the purchase of a condo ?

What happen if the transfer is not exact (for the reason of exchange rate or little change in the price) ?

Thanks

My ex-bank wanted to see the purchase agreement for the condo before they would let me have the money so probably best wait until you get here to transfer the funds.

Also it's likely that the price you're paying will be less than what gets declared to the Land Office for tax. You only need the FET to cover the amount that's declared, not the full purchase price.