About Woodrow Morris Alexander Estate Agents

Stephen D Morris started out as a property professional in 1989 in North West London. After a long career involving working in Central London’s “ West End” and for some of England’s largest real estate firms Stephen opened Woodrow Morris Estate Agents in the summer of 1999. Using all the skills learned in dealing with London’s prestigious property markets Woodrow Morris soon became a success and still is one of the market leaders and most successful agents in the area. After spending several months a year in Thailand for well over a decade Stephen relocated to Phuket and using the same skills learned over a long career will extend the Woodrow Morris brand in the form of Woodrow Morris & Alexander in Phuket.

Buying a Property in Phuket, Thailand – What you should know !

There is so much information, mis-information and rumour surrounding whether people who are not Thai citizens can or cannot buy property in Thailand. However the fact is that many non-Thais have lived in the most wonderful houses and apartments and have done so for many years. Woodrow Morris & Alexander are not lawyers, although we are happy to refer you to a qualified lawyer, we are experts in Real Estate, both in Phuket, Thailand and abroad.

Under the strictest interpretation of a Thai Law, a person who is not Thai cannot own Thai Land. However there are exceptions to this rule and methods by which control of the land can be arranged, and this is the most important factor.

Generally speaking there are three main ways that properties are acquired in Phuket and Thailand in general.

Foreign Freehold

For the buyer that wants a simple way to directly own a property in their own name, this is the method for you. Under Thai Law (The Condominium Act 1979), it is possible for a Non-Thai to buy a property in their own name, without the need for a lease, it is the buyer’s property forever. It is necessary for one hundred percent of the purchase funds to come on from overseas in foreign currency. There will also need to be a Foreign Exchange Transaction Form (FETF) from the Thai bank in order to provide evidence of this to the Land Department. The Condominium needs to be certificated by the developer and this should be made available to the buyer.

Leasehold

Anyone who has rented an apartment or house will be familiar with the idea of signing a contract or lease for a period, maybe six months, a year or maybe a bit longer. During this period the tenant had to pay rent and any bills. Taking a property on a long lease is virtually the same arrangement but the lease is not one year or two years, but far longer. In the UK for example leases tend to be around 99 years and some longer. In Phuket and Thailand in general although there is a restriction of the length of each lease period, there is no reason why the “Landlord” (owner of the land usually) cannot offer sucessive lease periods. For example it is quite common to issue a lease of 30 years, with two further periods of 30 years making a total of 90 years. In this case the period of ownership becomes certainly more than an average lifetime. This lease can be sold on to another buyer if you wish to dispose of the property. Also if you, as the buyer, acquire and control a Thai company (referred to below), the company can buy the property, and then lease it back to you. So in affect you become your own Landlord.

Acquisition of a Thai Company

An extremely common method of foreign ownership of property in Phuket and Thailand in general. We can outline the basic principle and then let your Lawyer run though how this is done in more specifics. However simply put a Thai Company is, under Thai Law, what is called a Thai entity or in legal terms the same as a Thai person and thus to buy land. Anyone that controls this company controls the land, simple.

Finance

Many developers that have built brand new developments in Phuket and other parts of Thailand offer finance, either from their own resources or a bank that they have an agreement with. Although for an individual non-Thai, even if he or she lives in Thailand, it is very difficult to arrange a “mortgage” or loan on a property. It is not impossible but in most cases properties purchases are financed either with the buyers own money, or the result of raising a loan in their own country.

Different Type of Thai land titles

This is extremely important. There are many types of Title that relate to what can be done with land (can it be built on for example), and the price varies enormously around Phuket and other parts of The Kingdom. However in our opinion there are only three types of title that should be considered that allow secure ownership of the land.

NS3G

This is a title plotted with boundary points on the map of the land area and set using an aerial survey with a scale of 1:5000. It is an accurately surveyed title as each plot is crossed referenced to a master survey of the land area and a corresponding aerial photograph. Therefore, it is possible to verify the boundaries of the land.

Chanote

This is the similar to the NS3G but is plotted using GPS (Global Positioning System, used in car Sat-Nav systems) to accurately plot and survey the boundaries of the land. This is the most secure type of land title.

Foreign Freehold Title

This only applies to apartments with Condominium developments that have been given a Government Certificate confirming that this has been accepted as a condominium that can offer this type of title. Many Non-Thais prefer this method of ownership as the property can be held in any name without the need for a lease or acquisition of a Thai company.

Thai Measurements of Land

This is often confusing as there are many unique Thai units of expressing land size in Phuket and Thailand as a whole, but here are the most common :-

1 Wah = 2 m
1 Talang Wah = 4 sqm
1 Rai = 1600 sqm
1 Rai = 400 Talang Wah
1 Rai = 0.40 Acre (approx.)
1 Rai = 0.16 Hectare
1 Ngan = 100 Talang Wah

Metric to Thai

1 m = 0.5 Wah
1 sqm = 0.25 Talang Wah
1 Acre = 2.53 Rai
1 Hectare = 6.25 Rai

Taxes & Transfer Fees

There are four main possible taxes or fees that may need to be paid. Which of these depends on the details of the transaction, the seller and the duration of the seller’s ownership? Most of the fees are calculated based upon a government scale or “tax assessment value” of the property and fortunately this is usually well below the market value.

Transfer Fee

This is based on the appraised value of the property and is normally divided equally between the buyer and seller, although this needs to be agreed by both parties and I would suggest that this is made part of the initial sale price negotiation.

Lease Registration Fee

As above and I would suggest that this is made part of the initial sale price negotiation. It is based on the total rent payable over the lease term, and is normally shared equally between the lessor and lessee

Specific Business Tax

Specific Business Tax (SBT) is payable by companies and individuals who have owned the property for less than five years.

An individual would generally be exempt from this if they can show that they have used the property as their main residence for at least one year.

Stamp Duty

Stamp Duty is paid if SBT is not chargeable. It is based on the official appraised value or the contracted price, whichever is highest.

Withholding Tax (WHT)

This only applies of the seller is a company and is 1% of the official appraised value or the contracted price, whichever is higher. However if the seller is an individual, the WHT is based on the sellers tax rate.

Property Taxes

* Everything refereed to here is for information purposes only. Woodrow Morris & Alexander Co. Ltd are not lawyers and what is written here should not be considered as legal advice. Woodrow Morris & Alexander Co Ltd recommend in the strongest terms that a lawyer is consulted before any monies are spent by any buyer that wishes to acquire a property, both in Thailand, the United Kingdom, and the World in general.

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