Buying a condo from a friend

[supersomchai]

I plan to buy a condo  very soon from a long term friend in pattaya.As a non resident I would normally have to transfer the money from my UK bank to my bank in Thailand and show the receipt to the land office when I complete the sale...this is correct ??

Is it possible to legally conduct the sale with my friend just by him transferring the property into my name(the condo is in a falang name not thai or company name) with no money transaction ?So from a legal point of view he gave it to me ?Can we do this at the land office?

[Peterw42]

Yes, you would need to show the money came from outside Thailand. The land office will want the transfer tax if the property changes hands. Otherwise everyone would be giving each other properties, exchanging money and not paying transfer tax.

The land office dont hold or handover the money, thats between buyer and seller, they just want a percentage.

In the past it was often the case that buyer and seller told the land office a low selling price and reduced tax. The land office has put a stop to outrageous low valuations, it can be a little lower, i think they tell you a figure and you are around that figure. Also your friend may need proof of sale amount from land office to export that amount of money from Thailand.

[supersomchai]

So it would be ok for my friend to transfer the condo into my name provided the transfer tax is paid.As no sale occured only a transfer of the property from him to me, i wouldnt have to provide a receipt from my bank showing any money transfer from uk to thailand?

 

[Peterw42]

2 minutes ago, supersomchai said:

So it would be ok for my friend to transfer the condo into my name provided the transfer tax is paid.As no sale occured only a transfer of the property from him to me, i wouldnt have to provide a receipt from my bank showing any money transfer from uk to thailand?

 

You cant buy a  foreign title condo unless you show the land office a foreign transfer receipt or a letter from the bank, money came from outside thailand.. They wont transfer it into your name. Transfer or transfer tax means as far as the land office is concerned a sale has taken place. You usually go to the land office with a cashiers cheque for the sale amount (i think they may even photocopy it) and after the land office does their paperwork you hand over the cheque to the seller. If you want to put the cheque back in your pocket, i suppose you could. 

[blackcab]

Forget the word Transfer. There is no Transfer, only a Sale.

 

You have to state the amount the property was sold for. There is a minimum amount the Land Office will accept, called the assessed value.

 

The seller and/or the buyer have to pay taxes and fees to the Land Office based on the sales price or the assessed value, whichever is higher.

 

To buy the condo, you have to have proof you imported foreign currency into Thailand for the whole of the declared selling price.

[supersomchai]

Ok thanks for your quick reply i guess ill just have to transfer the money bank to bank and accept the terrible exchange rates 

[Peterw42]

11 minutes ago, blackcab said:

The seller and/or the buyer have to pay taxes and fees to the Land Office based on the sales price or the assessed value, whichever is higher.

 

Quick question, I am aware of assessed value whichever is higher etc, how does that work in a falling market if properties start selling under the appraised value ?

[blackcab]

2 minutes ago, Peterw42 said:

 

Quick question, I am aware of assessed value whichever is higher etc, how does that work in a falling market if properties start selling under the appraised value ?

 

How does what work?

[Peterw42]

1 minute ago, blackcab said:

 

How does what work?

 

It must be starting to happen, I brought recently and the price was the same as appraised value (it really was, not made up) 

[blackcab]

1 minute ago, Peterw42 said:

 

It must be starting to happen, I brought recently and the price was the same as appraised value (it really was, not made up) 

 

Have you been enjoying a glass of wine or two? You asked how something works, you didn't clarify what you meant and now you're wandering off somewhere, leaving us all behind.

[supersomchai]

How do they work out the appraised value....you tell them the size location of the condo and they give you an estimated price??

[Peterw42]

3 minutes ago, blackcab said:

 

Have you been enjoying a glass of wine or two? You asked how something works, you didn't clarify what you meant and now you're wandering off somewhere, leaving us all behind.

 

 How does land office appraisal work in a falling market if properties start selling under the appraised value ? Land office appraisal is 1 million baht, the market crashes and same condo sells for 500,000, would they still insist on transfer tax on 1 million ?

[Peterw42]

8 minutes ago, supersomchai said:

How do they work out the appraised value....you tell them the size location of the condo and they give you an estimated price??

Take the chanote (title deed) or a copy, to the land office and they look it up.

[blackcab]

4 minutes ago, Peterw42 said:

 

 How does land office appraisal work in a falling market if properties start selling under the appraised value ? Land office appraisal is 1 million baht, the market crashes and same condo sells for 500,000, would they still insist on transfer tax on 1 million ?

 

Sure would. The thing is that the assessed value of a lot of places is low. If the whole country started selling property below the assessed values then a bit of transfer tax would be the least of people's problems.

 

To give you an idea, the company I work for recently purchased some land for about 65k per square wah. The assessed value was 28k per square wah.

[blackcab]

10 minutes ago, supersomchai said:

How do they work out the appraised value....you tell them the size location of the condo and they give you an estimated price??

 

All land and property has a value stored in their database. It's not a secret. If you can provide them with the location, they will give you the numbers. There may be a very small fee for this.

 

There is no estimation. The appraised price they give you is fixed.

[Peterw42]

1 minute ago, blackcab said:

 

Sure would. The thing is that the assessed value of a lot of places is low. If the whole country started selling property below the assessed values then a bit of transfer tax would be the least of people's problems.

 

To give you an idea, the company I work for recently purchased some land for about 65k per square wah. The assessed value was 28k per square wah.

Ok that makes sense. But as I said before (when I wandered off), the last condo I brought, the real sale price was the same as the Appraised value.

[trogers]

1 minute ago, Peterw42 said:

Ok that makes sense. But as I said before (when I wandered off), the last condo I brought, the real sale price was the same as the Appraised value.

 

Because you got 50% off the price list...?

[blackcab]

2 minutes ago, Peterw42 said:

Ok that makes sense. But as I said before (when I wandered off), the last condo I brought, the real sale price was the same as the Appraised value.

 

Land tends to increase in value.

 

Can the same be said for the majority of condos?

 

[supersomchai]

This probably sounds mad but i have to send the deposit tomorrow and i gave my thai wife power of attoney to accept sign /witness the deposit transfer ,its only 100,000 baht would the land office accept a western union receipt as part proof of the money transfer from the uk to thailand?

and the rest i transfer later bank to bank and show the land office both receipts?

 

[Peterw42]

2 minutes ago, blackcab said:

 

Land tends to increase in value.

 

Can the same be said for the majority of condos?

 

 

Based on a sale being the same as the appraisal, I would have to say no. Its either the bottom of the market, buy buy buy, or the beginning of the Apocalypse 

[blackcab]

9 minutes ago, supersomchai said:

This probably sounds mad but i have to send the deposit tomorrow and i gave my thai wife power of attoney to accept sign /witness the deposit transfer ,its only 100,000 baht would the land office accept a western union receipt as part proof of the money transfer from the uk to thailand?

and the rest i transfer later bank to bank and show the land office both receipts?

 

 

Why are you paying a deposit? Do you think the condo will sell itself super fast?

 

It's more sensible to simply turn up at the land office with the paperwork and process the sale on the spot.

 

The worst thing you can do is rush, rush, rush. Whenever that happens it's often not to your advantage.

[supersomchai]

I already agreed to pay a deposit on the condo ...if i dont it looks like iam backing out of the sale.Is sending the deposit western union ok ? Or should i do it by bank transfer ?

[blackcab]

I have no experience with Western Union. You actually need to prove the foreign currency entered Thailand and was converted into Baht here.

 

Unless anyone else has experience I would suggest bank transfer is going to be better and cheaper.

 

If you want to rush into the deal then send 100k by WU. You can always send the full purchase price by bank transfer then hold back the extra 100k in cash and use it for whatever.

 

Are you getting a sales contract in return for your 100k?

Edited November 17, 2016 by blackcab

[supersomchai]

Thanks again for your reply i should be getting a sales contract for the deposit where both parties are covered if the other drops out.

[trogers]

9 hours ago, supersomchai said:

I already agreed to pay a deposit on the condo ...if i dont it looks like iam backing out of the sale.Is sending the deposit western union ok ? Or should i do it by bank transfer ?

 

The Bt100,000 is no big deal. You can transfer the full amount for the condo later and get the FET, and the surplus of Bt100,000 be used for buying household and deco items...

[trogers]

9 hours ago, blackcab said:

 

Land tends to increase in value.

 

Can the same be said for the majority of condos?

 

 

Any developed property would face competition and has to be maintained.

 

Only those in desirable locations and have little competition would see reasonable increase in value. So, you can rule much of those shoebox units out...

[dotpoom]

11 hours ago, Peterw42 said:

You cant buy a  foreign title condo unless you show the land office a foreign transfer receipt or a letter from the bank, money came from outside thailand.. They wont transfer it into your name. Transfer or transfer tax means as far as the land office is concerned a sale has taken place. You usually go to the land office with a cashiers cheque for the sale amount (i think they may even photocopy it) and after the land office does their paperwork you hand over the cheque to the seller. If you want to put the cheque back in your pocket, i suppose you could. 

I think what you say is more more accurate than Peter above but it's not necessary to bring a cheque to the land office, the bank's letter covers all that.

[dotpoom]

12 hours ago, Peterw42 said:

Yes, you would need to show the money came from outside Thailand. The land office will want the transfer tax if the property changes hands. Otherwise everyone would be giving each other properties, exchanging money and not paying transfer tax.

The land office dont hold or handover the money, thats between buyer and seller, they just want a percentage.

In the past it was often the case that buyer and seller told the land office a low selling price and reduced tax. The land office has put a stop to outrageous low valuations, it can be a little lower, i think they tell you a figure and you are around that figure. Also your friend may need proof of sale amount from land office to export that amount of money from Thailand.

I don't think that's correct. I bought my wife (long time partner) a condo in her name and then two weeks later decided to change it over to my name....I still had to "buy" it from her. I knew this already so made the necessary arrangements with my bank. The Land Office knew I had bought it for her with my money and my signature was even on her purchase contract as a witness, and they remembered us. They did however give me a "reduced" rate of tax for the deal. Normally if you re-sell a property within a year of purchasing it you would be liable for a sort of 'business tax". I was going to call it a "capitol gains tax" but there was no gain in our transaction. The funny thing was, the Land Office valued the condo for me at 100,000 more than my wife paid for it two weeks earlier, a price which they had accepted. When I queried this I was told that every condo in my building were valued at that price?? Of course I should then have followed with ..."so how come my wife bought it for ........." but didn't bother as my wife (Thai) had bought it from another Thai lady....and I was "The Farang"....long enough here not to bother going through the motions just to get the blank stares.

    So even though I got a reduced rate of tax, I probably paid a few baht extra on the higher valuation.

  

    

    

[cheeryble]

On November 17, 2016 at 9:16 PM, supersomchai said:

Ok thanks for your quick reply i guess ill just have to transfer the money bank to bank and accept the terrible exchange rates 

 

I've found the exchange costs here to be far lower than where i came from, bank charges in general seem very fair.

Edited December 5, 2016 by cheeryble

[cheeryble]

On November 18, 2016 at 7:53 AM, trogers said:

 

Any developed property would face competition and has to be maintained.

 

Only those in desirable locations and have little competition would see reasonable increase in value. So, you can rule much of those shoebox units out...

 

Absolutely 

Location and maintenance.

The older condos generally have the prime positions, most new condos are crammed between other buildings, or even with quite expensive ones may only look out on central areas surrounded by other units. Not my choice.