Registration and conveyance in Thailand.

Some of these transfers and registration have complicated rules, and become even more complex when foreigners are involved. For example, if a foreigner owns a condominium and wishes to give it to a friend who is a foreigner, he cannot simply execute a deed of donation to transfer the ownership. The law states that there is no automatic transfer of ownership, there must be a sale.

Consequently, the following proof needs to be provided:

The transfer agreement is thus of high importance. It will for example show who is paying for the taxes and government fees. If such clause is missing when you are buying a new condo, both the seller and the buyer will be responsible to pay for such equally. The seller alone will need to pay the income tax, specific business tax and stamp duty.

When transferring a condominium there will be a transfer tax at a rate of 2% of the government appraised value. If the owner selling the condo resided in said condo for less than five years, there will be a specific business tax at a rate of 3.3% of the government appraised value or the actual sale price, whichever is higher. If the owner resided in the condo for more than five years, then the specific business tax will not be applicable, and instead a stamp duty of 0.5% will be applicable, it is based on the appraisal or sale value, whichever is higher. There will be a withholding tax charged at the time of transfer as well; if the seller is a corporation then this is a simple tax of 1% of the government assessed price. If the seller is an individual then the withholding tax will be a little more complicated, there are discounts for the amount of time that the seller lived in the property, and then the tax is charged at a progressive rate based on the sale or appraisal value, whichever is higher.

You first need a building permit from the local Or Bor Tor (the local government, also called the Tambon Administrative Organization or TAO). The building permit is evidence that you own the house, as well as the approval allowing you to build the house. The building permit is what is submitted to the land office when the house is transferred. The building permit may be put in the builder’s name if there is a builder involved, but you should change this to your name before the issuance of the house registration book (tabien baan). The building permit is proof that you own the land, this is especially important when there is a separate lease (and owner) for the land and house.

There is a lot of research you will want to do before commencing construction (or possibly before even commencing the procedure for a permit). First, you want to make sure that the note on the land is a good title; you do not want to build and have someone claim that you built on their land. Additionally, there can be servitudes on your land, and you want to make sure you will not violate those. You want to make sure you have a long-term interest in the land and that the land is free from any encumbrances that could threaten your full ownership or use of what you will construct. If you are not the owner of the land (and your are building because you have an interest like a lease or other) you will want to make sure that that the seller does not have any issues that would threaten your use of the construction, for example you will want to make sure the seller doesn’t have any issues like a bankruptcy proceeding against him.

There are many laws connected to zoning, and you will want to make sure you don’t violate any of those. There is the Building Control Act and the City Planning Act that has regulations on construction, zoning and permissible uses of land. There are environmental and other laws to look into as well (such as the Forest Act), and you will want to make sure what you build will not violate any of these acts. It is important that you look into all this information before you spend time and money constructing anything on the land. Note if the building is built illegally or violates building regulations, there can be heavy fines, or in the worst case imprisonment. There could also be issues having to rectify issues arising from not building according to regulations, or in the worst case complete demolition of the construction performed. This is why it is imperative that you speak with our lawyers so that we can verify that there will be no issues.