Found A Condo - Agreed On Price - Now What?

[YanTree]

Hi,

I have found a condo I would like to purchase. I have agreed upon the price with the seller and done my due diligence. Though I have no idea how to go about completing the sale in a safe and legal fashion. Looking for some advice.

Question 1: I have been having wire transfers sent into Thailand over the last six months to HSBC (Rama IV). Is this acceptable to meet the requirement that the funds come from outside of Thailand? I earn no money here (ED Visa) and I have been moving money in slowly both to live on and to buy a condo when I found one I wanted. Will the fact that some of the money has been in Thailand for awhile create a problem? (I have wired approximately 60% of the condo price in the last two weeks).

Question 2: What are the steps to complete the transaction from beginning to end? i.e. How does payment work? And the transfer of title? Is there an Escrow to use or ...? etc.

Question 3: What are the relevant fee's I will have to pay and when and where do I pay them? I've heard something about an approaching deadline - does that affect me, or only the seller?

Question 4: Are there yearly property taxes on condo's in Thailand?

Question 5: Does anybody know if buying a condo for less than 10,000,000 Baht will count toward the 10,000,000 Baht required for an investment visa? For example if I buy a 5,000,000 Baht condo now, and another 5,000,000 Baht condo in six months - would I then qualify for the investment visa? Or does it have to be one condo or otherwise all invested at one time? Anybody know if HSBC is a 51% Thai Owned bank?

Question 6: Anything else I should know? Would it be wise to hire an attorney or other agent to assist? If so, can anybody recommend a good firm or agency? Are there steps I need to take to be able to take the money out of Thailand if and when I sell?

Thanks in advance, even if you can only answer one or two of these!

Edited February 23, 2010 by YanTree

[geoffphuket]

To answer 1)

The land office will want a document from your bank showing the money was transferred from abroad solely for the purpose of purchasing a cond' (Thor tor 3 if my memory severs me correct). There is a time limit on how long the money has been on deposit.

geoffphuket

[rodentwarrior]

If you are buying a condo here, and you haven't instructed a solicitor to help you deal with this - then you really are a mug!

[YanTree]

If you are buying a condo here, and you haven't instructed a solicitor to help you deal with this - then you really are a mug!

Bit premature to be making that statement I think. I am posting here, in part, to determine if I need one. Evidently you are saying that I do...so I shall research finding one.

[JohnC]

To put your situation into it's proper perspective and without making derogative remarks, yes you really should consult a lawyer, why?

They need to check ownership of the condo, not unknown in Thailand for a "renter" to sell a condo then disappear yes even farangs do this !

They need to check there are no outstanding debts on the condo, maintenance fees, utilities, secured loans etc as once you purchase the debts become yours.

They will register with the land office and ensure all the correct paperwork re funds are presented then sometime in the future you should be able to sell and return your investment back home (less tax) without too much hassle.

The lawyer can hold the funds in escrow until the deeds are signed over then release to the seller.

In addition a good lawyer will look after your interest and not the sellers and I know some on here will laugh and say "good lawyer in Thailand" not possible but yes it is, ask around, personal recommendation better than some obscure reference on a forum.

[YanTree]

Ok thanks guys. With the couple of posts here and reading this forum a bit I've got most of my questions answered - the others my lawyer will be able to help me with. Still got two questions though if anybody knows the answer:

Will buying a condo for less than 10mm Baht count toward the 10mm Baht required for an investment visa? For example if I buy a 5mm Baht condo now, and another 5mm Baht condo in six months - would I then qualify for the investment visa? Or does it have to be one condo or otherwise all invested at one time?

What is the maximum amount of time you can have money 'in country' in USD in HSBC and be able to use it to buy a condo?

[hhgz]

"Will buying a condo for less than 10mm Baht count toward the 10mm Baht required for an investment visa?"

Nope.

"What is the maximum amount of time you can have money 'in country' in USD in HSBC and be able to use it to buy a condo?"

There is no maximum.

[trajan]

Question 3: What are the relevant fee's I will have to pay and when and where do I pay them? I've heard something about an approaching deadline - does that affect me, or only the seller?

yeah, the March 28th deadline is fast coming up (before March 28th a substantial discount on the govt transfer fee and specific business tax applies)...I read in the Bangkok Post this morning that the Cabinet of Ministers decided not to extend this discount....here is a description of fees and taxes payable at the Land Office when you actually close....I have done this already (once with a broker and once with my company's lawyer) and actually seen the discount in action, which is a nice savings

A. VALUES

there are two values to keep in mind when selling/buying a condo...the official govt assessed value (OGAV) and the seller's and buyer's declared sale and purchase price (DSPP).

usually people declare a DSPP higher than the OGAV when selling & buying a condo, but that's not always the case...

B. GOVERNMENT FEES & TAXES applied at closing at the Land Office when selling & buying a condo (currently temporarily reduced until March 28, 2010)

1. Government Transfer Fee of 0.01% of the OGAV (after March 28, the normal 2% would apply)

2. Specific Business Tax (SBT) of 0.11% of the higher of the OGAV or the DSPP (after March 28, the normal 3.3% would apply).

[NOTE: if an individual owner/seller owned the condo for more than 5 yrs or 1 year (in the case of seller being registered in the tabien baan/household registry book for that condo) then SBT would not apply, BUT in that case stamp duty would apply.]

3. Stamp duty/tax (IF SBT is not paid). Stamp duty of 0.5% of the higher of the OGAV or the DSPP

4. Thai Income Tax (for an individual seller, income tax is payable according to a calculation based on OGAV and length of time of owning the condo, not on declared sales profits/capital gains)

5. if applicable, real estate broker commissions (commonly about 3% on actual sales/purchase price) but, in my experience negotiable with the broker prior to finding a buyer.

[YanTree]

"Will buying a condo for less than 10mm Baht count toward the 10mm Baht required for an investment visa?"

Nope.

Just found some other posts on TV that contradict that. They said you could buy 1x10mm condo or 10x1mm condo or 1x4mm condo + 6mm in bonds or other qualifying investments etc.

I don't see why they would put a time frame on when you invest the money so long as you could prove it all came from overseas. I'm sure most people that buy 10 condo's don't buy them all at once.

[trajan]

Question 4: Are there yearly property taxes on condo's in Thailand?

No, but there is a draft law under debate about imposing annual property taxes (and eliminating the house and land tax, which most people seem to evade)

BUT, dont forget, you are going to have to pay the monthly (or quarterly or annual) condo juristic person common area maintenence fees...I pay by the year on my condos (just to avoid delaing with monthly invoices)......

[caf]

To answer 1)

The land office will want a document from your bank showing the money was transferred from abroad solely for the purpose of purchasing a cond' (Thor tor 3 if my memory severs me correct). There is a time limit on how long the money has been on deposit.

geoffphuket

six months i believe

[chiang mai]

Here's my ten cents/pence:

Do use a lawyer and build a contract, let him/her draft it and then you can add your own common sense items which often get overlooked.

Have the owner complete an inventory of all items in the condo that form part of the sale, agree that inventory and then make it an attachment to and a part of the contract.

For me personally I use a clause in the contract that affords penalties if either the buyer or the seller backs out and changes their mind at the last minute, doing so commits the seller and shows good faith on the part of the buyer.

Make sure that your funds transfer issues are in order wi the bank before completing the contract, a letter from your bank showing that funds have been transferred from overseas will suffice.

Agree the percentage split of taxes and fees, up to you what you can negotiate but do so within the context of any real estate agent commission fees that might be payable - basically, if you as the buyer are paying some of the estate agent fees I wouldn't also be paying transfer costs.

Make sure you have a letter from the condominium juristic person stating that all bills have been paid, up until the date of transfer and make receipt of that letter a condition in the contract.

Edited February 23, 2010 by chiang mai

[YanTree]

you are going to have to pay the monthly (or quarterly or annual) condo juristic person common area maintenence fees...I pay by the year on my condos (just to avoid delaing with monthly invoices)......

Ya I expected this but just found out how much they are. Basically equates to a months rent. Assuming I can average 10 months a year of occupancy (probably on the optimistic side) that lops 10% off of my return. Pretty substantial.

Though I'll be living in it for the foreseeable future so I look at it more like saving 11 months of rent that I'm now paying - which on its own is a pretty good ROI, 7% or so.

Thanks for all the info everybody.

[YanTree]

Any other ongoing costs I'm missing other than the odd repairs? Insurance or anything like that?

[donx]

"Will buying a condo for less than 10mm Baht count toward the 10mm Baht required for an investment visa?"

Nope.

Just found some other posts on TV that contradict that. They said you could buy 1x10mm condo or 10x1mm condo or 1x4mm condo + 6mm in bonds or other qualifying investments etc.

I don't see why they would put a time frame on when you invest the money so long as you could prove it all came from overseas. I'm sure most people that buy 10 condo's don't buy them all at once.

YanTree,

Forgive hhgz for his terse response. That's his normal style in this forum. He his, however, giving you the correct answer. The reason is because Thailand got rid of the investment visa. I think that happened in 2006 or 2007. You should be able to confirm this information by going to the ThaiVisa.com website itself and looking at all the currently available types of visas. I believe you will find that the investment visa is no longer available.

Check the dates of the posts on TV that contradict what hhgz said. I doubt they are recent posts.

[YanTree]

"Will buying a condo for less than 10mm Baht count toward the 10mm Baht required for an investment visa?"

Nope.

Just found some other posts on TV that contradict that. They said you could buy 1x10mm condo or 10x1mm condo or 1x4mm condo + 6mm in bonds or other qualifying investments etc.

I don't see why they would put a time frame on when you invest the money so long as you could prove it all came from overseas. I'm sure most people that buy 10 condo's don't buy them all at once.

YanTree,

Forgive hhgz for his terse response. That's his normal style in this forum. He his, however, giving you the correct answer. The reason is because Thailand got rid of the investment visa. I think that happened in 2006 or 2007. You should be able to confirm this information by going to the ThaiVisa.com website itself and looking at all the currently available types of visas. I believe you will find that the investment visa is no longer available.

Check the dates of the posts on TV that contradict what hhgz said. I doubt they are recent posts.

The investment visa is back - I know that as fact. And the minimum is 10,000,000 baht.

I don't have a problem with a short reply - he answered the questions. He was just mistake about one (I think/hope).

[mark5335]

YanTree,

Can you confirm your source of information for the Investment Visa. I bought a 12MB condo direct from a developer using funds from offshore 2 years ago. At that time, I was advised that the Investment Visa had been suspended.

Thanks, Mark

[PattayaParent]

"Will buying a condo for less than 10mm Baht count toward the 10mm Baht required for an investment visa?"

Nope.

Just found some other posts on TV that contradict that. They said you could buy 1x10mm condo or 10x1mm condo or 1x4mm condo + 6mm in bonds or other qualifying investments etc.

I don't see why they would put a time frame on when you invest the money so long as you could prove it all came from overseas. I'm sure most people that buy 10 condo's don't buy them all at once.

You USED to be able to hold the 10 mill or part thereof in assest like a condo but now there's no such thing as an investment visa for 10 mill, they scrapped it about 3 years ago.

But I beleive there's an investment visa for 40 mill? which also enables you to buy land.

[YanTree]

YanTree,

Can you confirm your source of information for the Investment Visa. I bought a 12MB condo direct from a developer using funds from offshore 2 years ago. At that time, I was advised that the Investment Visa had been suspended.

Thanks, Mark

Re-instated October of 2008 - just search 'investment visa' in the ThaiVisa search box, got this from the 2nd thread down.

From Police Order 777/2551:

2.5 In the case of an investment:

Permission will be granted for a period of not more than 1 year at a time.

B. In case of an investment of not less than 10 million baht.

(1) The alien has obtained a temporary visa (NON-IM)

(2) Proof of money transfer to Thailand of not less than 10 million baht.

(3) Proof of investment to purchase or rent for a period not less than 3 years of unit in a condominium from an agency or government agency concerned at a price of not less than 10 million baht.

(4) Proof of investment in the form of a fixed deposit of not less than 10 million baht with a bank registered in Thailand with Thai shareholders comprising more than 50% of its shareholders.

(5) Proof of investment to purchase government or state enterprise bonds with a value of not less than 10 million baht or

(6) Proof of combined investments as set out in clauses (3),(4) Or (5) having a total value of not less than 10 million baht.

You USED to be able to hold the 10 mill or part thereof in assest like a condo but now there's no such thing as an investment visa for 10 mill, they scrapped it about 3 years ago.

Ya, and then they brought it back over a year ago. See above.

Edited February 24, 2010 by YanTree

[Kered]

Check with HSBC but as far as I am aware there is no limit to the time that you hold USD, when you buy the condo HSBC wiull issue the paper work for the land office when you convert the USD to THB.

Ok thanks guys. With the couple of posts here and reading this forum a bit I've got most of my questions answered - the others my lawyer will be able to help me with. Still got two questions though if anybody knows the answer:

Will buying a condo for less than 10mm Baht count toward the 10mm Baht required for an investment visa? For example if I buy a 5mm Baht condo now, and another 5mm Baht condo in six months - would I then qualify for the investment visa? Or does it have to be one condo or otherwise all invested at one time?

What is the maximum amount of time you can have money 'in country' in USD in HSBC and be able to use it to buy a condo?

[YanTree]

Check with HSBC but as far as I am aware there is no limit to the time that you hold USD, when you buy the condo HSBC wiull issue the paper work for the land office when you convert the USD to THB.

That would be awesome, thanks.

My lawyer told me today to get some paperwork from them, going to head down there Monday unless Bangkok is burning down lol

[torrenova]

Yes the investment visa is back. It is 10m. You can split it over the applicable asset classes. You will need a FET (Foreign Exchange Transaction) form from your bank showing inward funds in a currency other than THB. If you are screwed on that one, there are apparently other ways of fixing this.

As all remittances to Thailand need a reason on the SWIFT form, if you have put on maintenance, then you may have a problem. If you have put condo purchase, then you should be ok. etc.

[donx]

The investment visa is back - I know that as fact. And the minimum is 10,000,000 baht.

I don't have a problem with a short reply - he answered the questions. He was just mistake about one (I think/hope).

Well thank you for that bit of information. I'm surprized this new investment visa hasn't been discussed at all in any of the threads I've been reading. I have to admit that I don't read many threads in the actual Visa forum. I read mostly in here and in the Southern Thailand forums.

If I remember correctly, the old investment visa only required an investment of something like 4 or 5 million baht. I'm probably wrong about that one as well. In any case, it doesn't really matter much to me anyway since I don't reside in Thailand and I'm almost elligible for a retirement visa.

Thank you for letting me know about it nonetheless.

[PattayaParent]

^yes good news that it's back. It hasn't been widely publicised but then I no longer have an interest in it as I am eligible for the retirement visa now.