First Time Buyer in Phuket
My wife and I are here on holiday and we have fallen in love
with the place; in fact we have been coming back to Phuket almost every
year since we first came here in 1989. Over dinner last night we started
to mull over the possibility of buying ourselves a place to use on our
future visits. As overseas subscribers to the "Phuket Gazette"
we have read several of your article sand felt you might be the right
person to ask what are the laws to limiting foreign ownership of property,
what is available and how might we go about such an investment?
Yes, there are laws to limit foreign purchase of freehold land, but beyond that you are free to purchase (as a non Thai, in your own name) any building or improvement on a piece of land, and have long term secure registered fully transferable (salable) lease rights over that land. Furthermore, subsequent to an amendment to the Condominium law four years ago up to 40% of the units in a condominium may be purchased directly by foreign nationals.
Purchasing a condominium is the easiest, simplest transaction, provided that an allocation remains within the 40% allowance and the funds for the purchase have been remitted from abroad and correctly recorded as such by a Thai bank. In popular buildings, you will often find that more than 40% of the units have been "sold" to foreign buyers, who have taken the unit through either some form of lease or nominee corporate structure. The foreign freehold is definitely the preferred structure for purchase of a Condo; if you do choose another structure of "ownership", have it checked carefully (since most are likely to have tax or other implications that are not immediately apparent) and certainly look for a price that is less than the freehold equivalent.
However if what you want is a house, dont be deterred by the fact that you cant acquire freehold land. You may own the building freehold and together with a well constructed leasehold and a purchase option for
the land (that could be invoked in the event the laws of foreign ownership changed - or you sold the property on to a Thai) it is quite possible to have effective ownership, yet still remain within the laws of Thailand. Please note however that such a structure is complex and needs to be set up properly - it is recommended that you seek the advice of an independent lawyer or property consultant, who speaks your language and can tailor make the agreement to your particular needs.
In Phuket you will find a huge range of sizes, prices and qualities of properties. Land price will almost certainly be the most significant part of a properties cost. Beach front or ocean view properties command significant premiums (expect to pay over 10,000,000 Baht for a quality beach front house), but continue to be one of the best investments, and they are readily salable, even during periods of market weakness, should the need arise. The cheapest properties to be found on the island (small two bedrooms homes can be found for under 1,000,000 Baht) will be found in the housing estates in the east/central part of the island. The low prices are achieved through very small plot sizes and very basic construction and finishes. The choice between these extremes is wide and varied so it pays to look closely at a range of properties and consider your own needs carefully before making a purchase decision
For the infrequent visitor a condominium (or at least a house or apartment unit in a managed estate) has the advantage of security and the assurance that your property will be cared for (and if you require, let out) while you are away. If you, plan to visit more frequently, then a house and land (usually cheaper than the equivalent condominium) may be the more practical solution and offer a greater privacy.
Over the last four months the local resort property market, after five years of very slow activity and soft prices, has been showing a significant increase in transaction volume. So, if after looking at the options currently available, you find something that appeals, you can be reasonably comfortable that that you will be buying close to the bottom of a market cycle