Sino ThaiBefore you buy any property, it is important to understand that when buying, you will spend more money than stated in the price of the property. Why this is so, and what costs arise when purchasing property in Phuket, we will tell in this article.
The most popular place in Thailand, stunning beaches and warm climate, tourism and beautiful nature – Phuket attracts investors and just people who want to move to live in the tropics. To date, many are seriously considering the issue of investment, moving, or buying property for rent. But before taking any steps, it is important to research the market, set a budget, and understand the associated costs.
The value of the property itself.
It is logical that the largest expense item will always be the price of real estate. It varies depending on the location of the object, the type of property, as well as the quality and size of it. Remember that you should not start negotiations on the purchase and sale if you are not sure that you can afford to buy this property.
Registration fee.
In fact, the buyer must pay a registration fee, the amount of which depends on the type of property being purchased – an apartment or a villa and the form of ownership – leasehold (long-term ownership) or freehold (full ownership).
In some cases, the fees are tied to the contract value of the object (value under the contract of sale), and in others to the estimated value. The estimated value can be obtained from the Land Department immediately before the transaction, but it is always lower than the contract value.
When buying an apartment in full ownership (Freehold), the buyer pays only a fee for the transfer of ownership (Transfer Fee), which is 2% of the appraised value of the apartment.
When buying an apartment in long-term ownership (Leasehold), the buyer pays a fee for registration of a lease agreement in the amount of 1% and a stamp duty (Stump Duty) in the amount of 0.1% of the contract value.
When buying a villa by a foreign individual, the building is registered in full ownership (Freehold), and the land in long-term ownership (Leasehold). In this case, the buyer will pay a transfer fee from the building, which is 2% of the appraised value of the house. And for the registration of a long-term lease agreement for land, it will be necessary to pay 1.1% of the contract value.
Lawyer expenses.
In order not to get confused by all these taxes, you will need a lawyer who will properly arrange everything and advise you on all the nuances of the transaction. We strongly recommend hiring a reliable local lawyer. The fee for the services of such a specialist in Phuket varies depending on the complexity of the transaction, and is about 1-2% of the purchase price.
Checking the object.
Before making a deal, a full check of the property you are purchasing is required. This is done to avoid problems with the land on which the object stands, and with the property itself. Such a check includes a name search, a survey of the building, and a survey of the owners. The costs of such verification vary depending on its complexity.
Service payment.
If your property is in a condominium or residential complex, you will be required to pay a maintenance fee. Prices vary depending on the services and amenities provided, and average around 30-50 baht per square meter per month. You can obtain this information from your real estate agent before making a purchase decision.
Property ownership tax
Since 2020, there has been a tax on property ownership in Thailand, which is 0.03% of the cost, provided that the object is more expensive than 10,000,000 baht. That is, if your property is worth 10 million baht, then the property tax will be only 3,000 baht.
Buying a property in Thailand is a great investment, especially if you understand and account for all the associated costs. By planning your spending, you will avoid surprises and surprises, and you can make sure in advance whether your purchase is a reliable investment.
Please note that the numbers in this article are quite approximate, in order to find out the exact amount of additional costs when buying, you need to contact a realtor and a lawyer. If you are our client, then our agency will take care of all these actions for free.