Thailand’s land laws are undeniably restrictive to foreign ownership except for condominium properties. The Condominium Act of Thailand allows foreigners to purchase a condominium property within the prescribed limitations. But even as purchasing a condo is the easiest way for a foreigner to own a property in Thailand, if they are not careful, they might fall into traps which they failed to see as coming.
Below are some of the pitfalls and traps condo buyers might fall into unknowingly:
- Failure to consider taxes due for the condo. Sometimes, the excitement that goes with a condo purchase can make a buyer forget to check the taxes due. In some cases, buyers fail to include this amount in their budget. The condo taxes are estimated to total over 6% of the purchase price and this should be prepaid when the property is transferred and the ownership is registered at the land office.
- Failing to take the cost of maintenance and allocate a sinking fund when determining the budget for the condo purchase.
- Failing to do due diligence on the condo property to ensure that the seller has the right to sell the condo. A title search is an extremely important task that every buyer should do.
- Failing to make sure that all the required permits and licenses are complied with according to government regulations. This is to avoid any problem in the long run and may result in delays, project cancellation or substandard work.
- Failing to negotiate with the seller about who will be responsible for the taxes and make sure that such are manifested in the contract or agreement. If the provisions of the sale agreement do not specify the responsibility of tax payment, it is likely that the buyer will have to shoulder the tax due for the condo.
- Failing to make sure that the sales contract is properly vetted and reviewed by a licensed lawyer in Thailand to make sure that your interests as a buyer are protected. By asking someone who is knowledgeable in this type of transaction, you are giving yourself the opportunity to be clear and specific on the terms you can compromise with the seller like payment of the taxes.
- Failing to double check the surrounding real estate lots. Before signing the sale agreement, it is important that the buyer double checks the surrounding properties to make sure that there are no obstructed views, or there are no restrictions on the zoning specifications for the condominium location.
By keeping these pitfalls in mind, a buyer will be able to avoid falling into these traps.