Are you planning to buy a condo in Bangkok and need some guidance with the legal regulations? Perhaps you’re unsure where the best areas to invest are or what unit size you can expect for your budget. If so, this definitive guide will help you through the process of buying a condo in Bangkok, one of the most popular cities for overseas property investors in Asia.
Being the most visited city globally, Bangkok has a perfect geographical location, an excellent health care system, many international schools, long-term visas, and cheap property compared to other Asian megacities. The city is also currently undergoing mass development, both in terms of property and infrastructure; thus, its urban landscape is continually changing. With all these factors considered, it’s no surprise that Bangkok condo sales has become very appealing for foreign buyers especially with the current investment visa opportunities.
Nevertheless, before you engage in the Bangkok real estate market, you must understand what you can expect from property agents and developers. Language barriers, unique property standards, and an overload of conflicting information can often leave first-time buyers feeling overwhelmed. This guide aims to simplify the entire process of buying condos in Bangkok, providing a straightforward and easy to follow checklist.
Bangkok’s Condo Market in 2021
Bangkok’s condo market has boomed over the last decade, and there have been dramatic price increases in some of the city’s central areas if you compare with prices from ten years ago. Buyers who invested early and targeted property along the BTS line, especially along Sukhumvit Road, have benefited substantially.
This results from the fact that land prices have also increased immensely in some central regions like Asoke. However, developers started to look for land plots close to the upcoming BTS lines in the city’s outskirts due to traffic congestion and overcrowding. Developing areas like Udom Suk and On Nut have great potential and are where developers have chosen to build many new projects.
As of now, in January 2021, there is an oversupply of condos on the market, and the Thai government has introduced new lending policies to act as a stimulus to aid the country’s stagnated economic growth. The new regulations mainly benefit first-time home buyers and are somewhat intended to scare off investors with a profit-seeking incentive.
For foreign buyers, this is good news if you plan to live in Thailand, as the choice is abundant, and there are great deals from developers looking to offload a backlog of units. This will suit those who plan to live and work or retire in Bangkok, as the surplus of condos means that developers and landlords now offer many promotions and discounted rates. Conversely, those looking to make a financial profit from investments may want to look elsewhere at the current time, as property prices are likely to continue on a downwards trajectory due to the lingering COVID-19 pandemic, the subdued economy, and the high level of household debts among Thai citizens.
If you would like to try before you buy, there is always the option to rent a condo in Bangkok, which allows you to enjoy all the pleasures the city has to offer, whilst deciding if this is somewhere you would like to live long term. With the current conditions in the market coupled with the overall uncertainty due to COVID-19, renting a condominium in Bangkok is an excellent option for prospective buyers, especially if you are unsure about which neighborhood to invest in.
Legal Conditions for Condo Ownership in Thailand
In compliance with Thai laws, there are several conditions for foreigners to own a condo in Thailand. First of all, to clear up any uncertainties, misconceptions, or doubts, foreigners cannot own land in Thailand, but they can own buildings and structures located on a plot of land, and they can also own Condominium Freehold Titles. For this guide, we will be focusing purely on condos but for more information about foreign property ownership laws and regulations in Thailand, read our guide to Buying a Property in Bangkok.
According to Thai legislation, “Condominium Freehold” is a special Legal Title within the Condominium Act B.E 1979 and its subsequent amendments. It states that foreigners are legally able to purchase a condo, with the condition that no more than 49% of the units in a Condominium Project belong to foreign nationals. Thai nationals or Thai entities must own 51% of any Condominium Project. Another condition states that the funds to buy a condo must come from overseas and in foreign currency.
Think of Condominium Freeholds as the division of a building into individual condominium units, whereby each condo benefits from proportional co-ownership of condo facilities like the pool, gym, car park, etc. Put in plain words, Condominium Freeholds are the simplest form of property ownership for foreign nationals in Thailand. With that said, let’s look at what you should add to your checklist if you’re serious about buying a condo in Thailand.
Bangkok is a vast city with many districts, containing hundreds of Condominium Projects. This means that you have a lot of scope regarding the type of property, the price, and the location, all key factors that you must decide upon before making any further considerations.
Once you have a price in mind and know what type of condo you want, such as a studio, two-bedroom, etc., you need to think about which part of Bangkok suits you. It’s essential to do some research and find out which neighborhood suits your needs best. Some of the areas we already mentioned above are very popular among foreign buyers, with Sukhumvit Road containing most of the hotspots in the condo market like Asoke, Phrom Phong, Thonglor, Phra Khanong, and On Nut.
Each of these areas has its charms and benefits. Asoke is one of the prime locations in Bangkok, but not the most expensive. For a newly built condo close to the BTS station, be prepared to pay THB 200,000 (USD 6,400) per square meter. In Phrom Phong and Thonglor, you’ll find many new luxury condominiums, so expect to pay anywhere between THB 230,000 – 330,000 (USD 7,400 – 10,600) per square meter for newly built condos.
In Phra Khanong and On Nut, condo prices are lower. Brand new condos close to the BTS usually start from around THB 140,000 – 220,000 (USD 4,500 – 7,100) per square meter. Obviously, you will find condo units in each area outside of the mentioned price ranges, but this is a useful guide for calculating the price-to-size ratio.
Some other popular locations with a wide selection of condos for sale include Silom-Sathorn (BTS Saladaeng/MRT Silom- BTS Sapan Thaksin) and Wireless-Ploenchit (BTS Ploenchit, BTS Chidlom, BTS Ratchadamri). Wherever you decide to stay, make sure you also consider how you will get around, as Bangkok is, of course, notorious for its traffic jams, so being close to the public transport system will be a crucial factor for most foreign buyers.
Condo Project Developers
The condo market in Bangkok, like most large cities, has become highly brand-driven, and the projects of some developers have become well known for quality and reliability. While it’s not essential to buy from one of the top-tier brands, it’s wise to consider reputable developers’ projects as they usually benefit from well-planned building management operations. Building management and maintenance is a crucial factor in ensuring that the condo holds its value.
Ready to Buy a Condo in Bangkok
Once you’ve done your research and you’ve finally picked the condo you’re happy with and would like to buy, the buying process can begin. It may seem daunting at first, but we’ve broken it down into easy to digest pieces, so you don’t miss anything with your transaction.
Make an Offer and Start Negotiations
When you decide you are ready to make an offer, it’s critical to carefully mention and agree upon the condo’s price and the distribution of the taxes and fees between parties. You should also check if the property is fully-furnished, partially-furnished, or non-furnished, and you should establish an approximate date for the transfer date.
Complete the Preliminary Checks
When you reach this stage, we recommend appointing a Lawyer, especially before making any deposits or signing any written agreements. You’ll want to make sure you have been given the following documents before proceeding any further:
- Chanote (Title Deed)
- Landlord ID or Passport
- Tabien Baan (House Registration Book)
- Property Agency Agreement (Showing that the agent has instructions to act on behalf of the landlord)
With these documents in hand, it will be possible to know if the seller and agent have the authority to sell the property and that it complies with the legal conditions we covered earlier.
Draw Up an Offer Letter
After everything is verified to avoid any potential disagreements at a later stage, it is vital to obtain a written “offer letter,” sometimes called a “letter of understanding.” This letter, signed by all parties; the seller, the buyer, and the agent (witness), outlines the purchase’s details. Key elements of the offer letter include:
- Confirmation from the seller that they are the owner and have full authorization to sell the condo
- The agreed sales price
- The deposit amount
- The distribution of the taxes and fees between parties
- The penalties for the seller and/or buyer in the case of an unsuccessful transfer
- Confirmation from the seller whether or not the condo comes with furnishings
- The mutually agreed transfer date
Payment of Sales Deposit
Once an offer letter is signed and confirmed by all parties, accompanied by certified copies of ID, it’s safe to pay a deposit to reserve the condo. You will need to pay a deposit between THB 50,000 to 5%, depending on the property type.
After the deposit is paid, the condo is officially taken off the market. At this stage, the agent or the lawyer will collect all the required documents and control the following:
- Compare the copy of Chanote (Title Deed) with original held at the Land office
- Ensure there is no mortgage or charge on the unit
- Recheck all details of the property, including size, Chanote number, and the registered owner
When the due diligence is complete, the Sales and Purchase Agreement’s signing can take place to buy a condo in Bangkok. The lawyer or real estate agent in Bangkok will calculate the exact government taxes and transfer fees due upon the transfer.
You must prepare specific documents for the day of transfer, so here is a checklist of necessary paperwork:
- Original passport
- Copy of marriage certificate (if applicable)
- Spouse consent form (if applicable)
- Name of buyer’s mother and father (for Land Department records)
- Cashier Cheques and Cash
- Foreign Exchange Transaction Form (FET)
- Debt Free Letter
To buy a condo in Bangkok a debt-free letter needs to be issued by the condominium’s juristic office manager confirming the absence of debts up to the date of transfer of the condominium title deed. Also, note that your spouse will need to be present on transfer day (if applicable). If that is not possible, you will need to arrange a power of attorney.
Obtaining a Foreign Exchange Transaction (FET) Form
Getting a Foreign Exchange Transaction (FET) form is an integral part of the purchase process for foreigners, as it is an essential step in complying with Thai Condominium Laws. To be permitted to buy a condominium in Bangkok, foreign buyers need to prove that the whole amount of the purchase price declared at the Land Department was transferred in a foreign currency (from overseas) into a local Thai Bank Account. As such, to comply with this regulation, foreign buyers must ensure the following:
- The name of the remitter account must be the same as the name of the buyer.
- The full address of the remitter and buyer must be filled-in on Transfer Form details.
- Purchase funds must be transferred in foreign currency and converted to Thai Baht by beneficiary Thai Bank.
- State the purpose of transfer on the transfer slip.
If you carefully follow all the stipulations above, you will be able to obtain an FET from your beneficiary bank.
Land Department Transfer
When all documentation is collected and the funds are in place, you can arrange an appointment at the Land Department to complete the transfer. Each district of Bangkok has its own Land Department Office, so the Condominium Project’s location will dictate which office you need to attend. The project agent or your lawyer can also check the exact Land Department for transfer of the unit.
If either you or the seller cannot be present on the day of the transfer, the absent party will need to arrange a power of attorney. In cases where the property was purchased using a mortgage, the bank and the seller would calculate the exact split. When buying a condo in Bangkok with a mortgage, a bank officer will need to be present on the transfer date to write-off the loan.
If all the documents are in order and the funds are confirmed as received, the Land Officer will complete the transfer. The seller’s name will be taken-off the Title Deed and replaced with the new buyer’s name.
Final Formalities of Buying a Condo in Bangkok
After buying a condo in Bangkok and the transfer is complete, the seller will hand over the Title Deed, Tabien Baan, and all items relating to the property like the welcome pack, keys, access cards, etc.
It is also crucial to sign the transfer of utility documents (electricity and water) to ensure a smooth transaction. Finally, it is also important to contact Building Management of the Condo and provide them with details of the new landlord for their records.
Hopefully, you will find your dream apartment for sale in Bangkok and have a smooth transition into your new home with this valuable insight. If you are interested to buy a condo in Bangkok, please get in touch us as we would love to help you out.