Frequently Asked Questions:
1. What are the standard lease terms?
2. What deposit is normally required?
3. What is the difference between a Condominium and Apartment complex?
4. What is “Booking Fee”?
5. What if i have to break the contract?
6. Can i use my deposit as my last month’s rent?
7. Where do i pay my bills?
8. What documents do you need to move in?
9. Do i have to pay the Agent?
10. Are pets allowed in condominiums/apartments?
11. Which measurements we use?
12. What kind of taxes do i have to pay when i rent out my property?
13. What is a Foreign Quota?
14. What is a freehold property?
15. What is a lease hold property?
16. How can a Foreigner own a House and Land in Thailand?
17. How can a Foreigner own a Condominium in Thailand?
18. How to Sale or Purchase a condo in 6 steps
1. What are the standard lease terms?
In Bangkok the normal lease term for an apartment, condominium, house and townhouse is 1 year. Some landlords also accept leases for less than a year, but most of them require a 1 year lease. If you do require a shorter term accommodation, serviced apartments are the ideal solutions!
2. What deposit is normally required?
The normal standard is that you pay 2 months deposit and 1 month rent in advance on the day that you move in. You may have heard of deals where they paid 1 month deposit, but this is very rare.
3. What is the difference between a Condominium and Apartment complex?
An apartment complex is owned by one person/family and a condominium is owned by many different owners.
4. What is “Booking Fee”?
Booking fee/Holding fee is a fee that is paid when you want to book/reserve an apartment. It’s part of the deposit and is usually not refundable (When you don’t want to rent the apartment anymore, you will lose your paid booking fee)
5. What if i have to break the contract?
Generally, if you have to break the contract before the lease ends up (before 1st year) you will lose your full deposit and you have to clear your outstanding utilities bills. We can negotiate with the landlord if your work circumstances are uncertain, to put a diplomatic clause in the contract. This means: If you have to leave the country before the end of the contract due to work circumstances, the landlord will return the full deposit back to you.
6. Can i use my deposit as my last month’s rent?
The answer is No. The deposit is there for damages and unpaid bills (phone and utilities).If you do not pay your bills, the landlord is responsible to pay the bills and will deduct these expenses from the total deposit. If they allow you to use the deposit as last month’s rent, they wouldn’t have a protection to clear all bills.
7. Where do i pay my bills?
You can pay your electricity, water and telephone bills at the 7-eleven supermarket. They will charge you a small fee for their service. Please pay before due date.
8. What documents do you need to move in?
A copy of your passport and a copy of your work permit (If any).Landlord may also ask for a proof of income.
9. Do i have to pay the Agent?
No, In Thailand the real-estate agent gets his commission from the landlord.
10. Are pets allowed in condominiums/apartments?
Most apartments and condominiums do NOT allow pets (Building restrictions), but some apartments accept small pets. We showed in our listings whether the building allows pets or not .Mostly owners of a house or townhouse allow pets.
11. Which measurements we use?
In Thailand we have different kind of measurements, so we measure land in Rai, Wah or Ngan.
- 1 Rai = 4 Ngan (1600 Sq.m.)
- 1 Ngan = 100 Wah ( 400 Sq.m.)
- 1 Wah = 4 Sq.m.
- 1 Acre = 2.5 Rai
- 1 Hectare = 6.25 Rai
Condominiums, apartments and houses we measure in Square meters (m2) or Square feet.
12. What kind of taxes do i have to pay when i rent out my property?
There are 2 different cases; either you rent out your property to an individual or to a company. Most landlords prefer to rent out to an individual rather than companies. The difference is when you rent out to a company, the tenant has to deduct withholding tax and pay to the government and an individual just pay the rent.
- Condo/house 5% withholding
- Furniture 5% withholding
- Management/service 5% withholding
Every landlord have to pay housing tax (12.5 % per year on the annual rental revenue)This explains why landlords prefer to rent out their property to individuals rather than companies, since they don’t want to lose 12.5 % of their revenue.
To reduce the landlord’s household tax (based on property rental) the contract is broken up in three parts (Mostly 2 parts).
- Condo/House rental
- Furniture rental
- Management/service
It means that 49% of the total units in a condominium building can owned by a foreigner and their ID can be put in the corresponding title deed of the condominium.
14. What is a freehold property?
If you purchase a freehold property, you will own the property, the land it is built on, and you will have the right to live there for as long as you want. You can make moderations to the property within restrictions of the law and planning restrictions. You may need permission to make structural changes. Freehold foreigners can buy and own freehold condominiums. They also have the right to sell or lease the property and to develop the property within the guidelines under Thai Law.
15. What is a lease hold property?
Leasehold means that the buyer is leasing the property from the landowner for a pre-determined of time (Normally valid up to 30 years).You won’t actually own the property, or the grounds it is situated on. At the end of the lease term and both parties agreed to renew the lease, you must register the renewal at the Land department (Pay government fees etc).This gives the lessee “ownership” of the land. The downside is that the Lesser may not wish to renew or the law may change. All your invested money will be lost.
16. How can a Foreigner own a House and Land in Thailand?
A foreigner who invests with a Thai registered Company can purchase land and house with an unlimited size and amount of investment. The foreigner will buy in company registered name.
17. How can a Foreigner own a Condominium in Thailand?
A foreigner can own freehold a condominium in Thailand, because a condominium’s title deed (Called: Chanote), doesn’t have any land registered to or associated with the condominium. A foreigner also may own a condominium with a leasehold agreement. In this case the property remains in the THAI owner’s, but you can use all the benefits.
18. How to Sale or Purchase a condo in 6 steps.
1) When you find the condominium you wish to purchase it is recommended that your broker make a due diligence of the property which includes:
* Check the copy of the title deed given by the seller against the original (Kept at the land department office)
*Check if the seller is the owner of the unit
* There is no mortgage or other charge registered on the unit
*Check with the court if there are no legal proceedings against the seller that could affect the outcome of the sell.
* The previous transactions in the building which will give you the information at what price the seller purchased its unit approximately.
* Check with the juristic person of the condominium the percentage of foreign owners in the building (Foreign Quota), if you are a foreigner.
* The buyer should also request to see a copy of the Tabien Baan and to check whether the seller registered the condominium unit as its personal registered address. If it is the case the seller will have to move its registered address out of the condominium unit.
2) Sale & Purchase agreement.
The second step is to make up a Sale and Purchase agreement. Herein is written the sale and purchase price, the amount of the deposit (Between 5-20%) and costs of transfer including taxes, between buyer and seller.
* Usually taxes and costs of transfers are shared (50/50) between the seller and the buyer but depending of the outcome of the negotiations the seller or the buyer may be liable for 100% of all costs and taxes.
* Individual Sellers do not in general offer any warrantee on the condominium unit. If the condominium unit is older than two years the guarantee of the developer will have already expired.
3) Transfer of the Funds.
To purchase the condominium the foreign buyer will have to prove that the total purchase amount, declared at the land department, is to be paid out of foreign currency transferred to Thailand by the foreign buyer.
* The fund must be transferred from an account under the name of the foreign buyer or to an account in Thailand with the name of the foreign buyer (Mention: to purchase a condominium).
4) Documents for Transaction
*The buyer has to provide a copy of his passport (Including the page with visa stamp)
* Copies of the buyer certificate of marriage and of the passport of the spouse. (Marriage certificates in English language do not need to be translated, other languages need to be translated and the translation certified)
* If the seller does not have a lawyer, the buyer Broker/Agent should remain the seller to obtain the letter from the juristic person attesting the foreign ownership ratio and that the common area fee for the units has been fully paid. Without this document the transaction may not proceed. If the seller is late with the payment of its CAM Fees the seller must clear the debt before the sale being able to proceed.
* The seller shall request his/her bank to issue the Foreign Currency Exchange forms that will serve to prove that the sale and purchase price is paid out of foreign currency transferred to Thailand
* If the unit is mortgaged the seller must contact the bank that hold the mortgage and request the bank to calculate the final amount due to clear the mortgage and send to an officer at the land department on the date of the transaction to clear the mortgage prior to the transfer.
5) Prepare the Payment
* The Buyer and/or the Seller will pre-calculate the amount of taxes to be paid at the land department office on the date of the transfer of ownership.
* The Buyer will prepare cashier check equivalent to the amount of the net purchase price.(Taxes and expenses not included)( If the unit is mortgaged and it is necessary to pay the bank the buyer shall prepare a cashier check equivalent to the amount of the debt to be settle to the bank)
* Once received the cashier check the buyer will send the copies of the check to the seller and/or his bank to give them the opportunity to verify with the issuing bank that the check are indeed real.
* The Seller and/or the Buyer must prepare in cash the amount necessary to paid the taxes and government fees due on the date of the transfer.
6) Transfer at Land department
*The Buyer, Seller and the Bank (if the unit is mortgaged) or their authorized representative must all attend the Land Department on the agreed date of the transfer. If one party is missing or not represented the transaction cannot go ahead.
* The buyer representative will shows the original cashier check to the seller and or the bank representative (to release the mortgage on the unit)
* The seller and the buyer (Or representatives) will sign the sale and purchase form prepared by the land officer and the documents required for the transfer of the unit (Original duplicate of the title deed).
*The Land Officer will change the original duplicate of the title deed and will give it to the buyer (or representative) mentioning the name of the buyer as the new owner of the unit. Both parties (See agreement) will pay the taxes and costs due for the transaction to the Land Officer.
Note: It’s the seller’s duty to prepare the documents for the transfer of the electricity and water meters to the buyer. The buyer will have to refund to the seller the deposit paid by the seller to the electricity authority if this matter was not included in the sale and purchase price.