Can a Foreigner Buy a Condo for Investment in Thailand?

The simple answer is, yes, as per Thailand’s Condominium Act 1979. Since the implementation of this act, foreign nationals have been permitted by law to purchase condominiums within the kingdom, albeit within certain legal parameters. The owner of the condo is permitted to let out the property to a third party.

Many foreign investors choose to make a property investment in Thailand as their retirement home. However, a larger number makes invests in their own holiday home to make money through capital gain and rental yield. Historically this has been very profitable.

Are You Restricted Geographically When Buying a Condo?

Quite simply, no. During the early years of heavy foreign investment, it was almost as if the foreign investors self-imposed a geographical restriction on themselves. Few, if any, investors looked further than Bangkok and Pattaya.

The clamor for investment in these cities drove the property developers into a non-stop marathon of build, build, build. The result of this is easy to see; the skyline of concrete has changed forever, and has left the cities with an over-supply of condos. We now see that capital growth and rental yields are falling.

Are There Alternative Locations Where I Can Invest in a Condo?

Many foreign investors have identified this negativity and have begun to look at previously ignored locations in which to make an investment. Hua Hin is one such area that is gaining more interest from foreign investors. Our research shows that the Hua Hin region is already showing capital growth and rental yields that are exceeding that of many major city condo developments.

The Necessity of Foreign Investment

Thailand benefits economically from foreign investment, in the same way that any other country does. Within the Thai economy, year-on-year there has been a growing reliance on foreign investment. Within the major cities, foreign investment has helped to raise the standard of living for indigenous Thais. This reliance is going to continue; one of the main pointers to this is the country’s population.

A Population Problem

For a number of years Thailand’s indigenous population growth has been in decline. For 2019 the growth is expected to be a mere 18%. The projections for 2020 predict the growth in indigenous population to be zero. Thereafter, the ongoing trend will then be for a gradual decline in the population.

These trends indicate that Thailand is going to have an ever-increasing skills shortage, as well as an aging population. Thus, the kingdom’s reliance on being able to attract personnel from abroad to fill the skills gap will become ever more essential.

One method the country has been active in, is in making it comparatively straight forward for you to invest in property. With an increasing skills shortage, it is very unlikely that this situation is going to change.

Economic and Political Ebbs and Flows

Since the implementation of the Condominium Act 1979, foreign ownership of property in Thailand has grown at an incredible rate. However, there have been times when investment has slowed, as would be expected with the economic ebbs and flows of any nation. Just like any other country, Thailand is not immune from the basic economic vagaries that apply to any country anywhere in the world.

The most significant period of slowing down in the investment market was during the Asian economic crisis which began in 1997. Thailand bounced out of the economic doldrums with remarkable alacrity and veracity with its economy earning the title of “Teflon.”

The International Monetary Fund continues to report on a healthy outlook for the Thai economy with steady growth. This is good news for property developers and for investors in the condo buy-to-let market.

It is fair to say that Thailand has had its share of almost perpetual political ups and downs, and a good degree of uncertainty on its infantile journey to full-on democracy. However, this has not stopped the Thai economy from being robust and consistent. Nor has it curbed the thirst of foreigners wishing to invest in Thailand.

You Have Numerous Visa Options as an Investor

To enter the country all foreign visitors require a visa, however, there are 55 countries which do not need to apply for a visa prior to travel. Nationals from these countries will have their passports stamped with a tourist visa on arrival, valid for 30 days. 

A foreigner can buy a condo in Thailand whilst visiting the country on a tourist, marriage, or retirement visa, or whilst working in the country with a work permit. Whatever visa you have to accommodate your stay in the kingdom, do not let it lapse. Over the last few years the Thai authorities have become a lot harsher in the way they deal with visitors that fail to maintain their visa status. 

Is a Condo Investment Visa an Option for Me?

For foreign buyers planning to invest 10 million baht or more, there is the option to apply for a one-year condominium investment visa. This particular visa can be renewed every year. In qualifying for the investment visa, the purchase being made can be multi-faceted. The 10 million baht investment can be made up of the purchase of more than one condominium and can include deposit payments.

However, the foreign investor will need to be in the kingdom on a non-immigrant visa in order to apply, not a 30-day tourist visa. Buyers should be aware that if they choose a condominium investment visa they will not be permitted to work in the kingdom.

What Do I Do Next?

Since 1979, the vast majority of condo purchases by foreign nationals in Thailand have been for the purpose of investment. The buyer’s objective has always been capital gain and rental yield, from either short or long term lets. For a non-national acquiring a buy-to-let condo in Thailand the laws are very clear, and pretty straight forward. Obviously, a fair amount of paperwork needs to be obtained and submitted to various offices throughout the buying process.

As with all legal matters, it is essential that you show due diligence. Due diligence from the outset can save time, money, and can reduce the possibility of things going wrong during the buying process. It is vital that you employ the services of a lawyer.

Shop around to find a lawyer who you feel confident with. A lawyer that you can communicate with in a common language. English is the predominant common language for foreign-speaking lawyers in Thailand. Talk to other investors and question them as to whether they were satisfied with their lawyer. Check their rates and look for referrals.

You Are Subject to Some Legal Restrictions

So, you have decided on your condo buy to let purchase. You have exercised your prudence in employing a lawyer to act on your behalf. Even though you have employed a lawyer, there are just three straightforward aspects of the law that we feel you should be aware of. These are very clear and explicit, and are laid down in Thailand’s Condominium Act (1979) as amended in 2008. They are:

1. Funds covering the entire cost of purchasing the condo must be transferred into Thailand from a foreign country, and in the currency of that country. Failure to comply with this element of the law will result in the foreign purchaser being unable to register the condo in their own name.

2. In any development, foreign ownership is restricted to 49% of the total number of condos. This will only be of significance to an investor that is looking to make a large investment by purchasing multiple condominiums within the same development.

3. The completed development is required to be managed, and governed in accordance with the regulations laid down in the Condominium Act.

Obviously, there is much more to the legislation than we have listed here. But having enlisted the professional help of a lawyer, you have very little to worry about.

If you want to see the details of the Condominium Act (1979) as amended 2008 in full, it can be found on the Thai government websites.

How Much Can I Invest?

Within the law there is no minimum or maximum amount of financial investment that a foreign purchaser may make. On completion of a purchase the buyer is in possession of the deeds in the normal way. As a foreign investor, the holder of the deeds is fully entitled to use them as collateral to secure loans and financing for further investment.

We are aware of some foreign investors that have used this process to gain financial backing to buy further condos. Although you are perfectly entitled to do this, we wouldn’t recommend it unless you have sound business acumen within the Thai property market.

What Limits Are There on My Investments?

Although there is no upper limit to how much a foreigner can invest in property, there is one restriction. For any foreigner considering making a considerably large financial investment there is the 49% ownership restriction.

It is not uncommon for investors that are buying to let, to acquire multiple units within the same condo development. This is perfectly legal. However, in any single development, foreign ownership cannot exceed 49% of the total available units.

The purchaser will be required to hold a bank account in their own name, not a joint account with a Thai national. The foreign buyer cannot use existing funds in Thai baht, or foreign currency they may have in the kingdom, prior to purchasing a property. The total funds covering the purchase of a condo must be seen to be transferred into a Thai bank account in the currency of the foreign buyer’s home country.

A Cautionary Note for You on Currency Exchange Rates

In recent years, the Thai economy has been expanding, and the economic forecast is that it will continue to do so. As a result of this economic expansion, the Thai baht has steadily strengthened against all major currencies. Of course, this is not good news for Thai exports, but the government has a policy of allowing the baht to float freely on the money markets. There are no indications of any fiscal plans to influence the market in order to weaken the Baht.

What the IMF Says

A report by The International Monetary Fund forecasts that the baht could hit the range of 30 – 30.50 to the US Dollar by the beginning of next year. The outlook is similar for the Pound Sterling with the exchange rate expected to fall to 36 pounds to the baht by the end of 2019. The exchange rate for the yen is expected to show a similar percentage rate decline. The euro fairs a little better, but the trend is still downwards.

These exchange rates will effectively make the purchase of a property more expensive. So, if you are thinking of investing in the buy-to-let market in Thailand, it would be prudent to act sooner rather than later. Putting off your decision for as little as a year is likely to cost you money.

Do I Need to Remain in Thailand Throughout the Buying Process?

The buyer is not required to be in the country throughout the buying process. It is, in fact, possible to buy a property without even entering the country, although we would not recommend this. But with a lawyer there should be no problem with the buyer traveling back and forth from their home country during the process. This is useful for those foreign investors who have additional commitments in their home country.

In our experience, most investors experience an enjoyable holiday in Thailand, traveling to various locations and viewing a wide range of condos. Then, after making their decision on their condo purchase and paying a deposit, they return to their home country. At the appropriate time they travel back to Thailand to make the final payment of funds, finalize the property transfer, and take possession of the deeds.

How Long Does the Process Take?

If an investor buys a property off plan, then from paying a deposit to finalizing the purchase depends on the build time of the project. A large development can take up to three years to complete. On completion of the build the property transfer should take place within two weeks. Some speculative investors will pay a deposit early to get a good discount and re-sell the property at a profit once the building has been completed.

When an investor decides to purchase a condo after the building has been fully completed, the whole process may take longer. In these circumstances it is possible that the whole process can take from two to six weeks.

So, Wrapping It All up for You

Thailand encourages foreign investment; it is good for their economy. The country recognizes that it has a skills gap which will continue to increase. Accommodating foreign investment is one way in which they can help to fill that gap. Your foreign investment in property brings into the country valuable foreign currency, and helps to provide homes for foreign workers—which the country is in need of.

Legislation has made it relatively easy for foreigners to buy condos. The same cannot be said for them to own houses in their sole name. In some ways this has been to the detriment of many locations around the country, the cities particularly.

To accommodate the influx of foreign workers, retirees and investors, the emphasis of property development has had be on high rise condominium buildings. In many ways this has been to the detriment of cities such as Bangkok and Pattaya.

With more and more people working remotely from home, the necessity to be in a set location is of less importance. This has enabled people to look outside the cities to find a location in which to live, and this improves their quality of life.

You Have Alternative Location Options

More holiday makers are beginning to tire of the concrete and neon of the cities. The region around Hua Hin is seeing greater numbers of tourists and retirees. With the accommodating laws on foreigners buying condos, Hua Hin is starting to see new, quality condo developments aimed at foreigners entering the buy-to-rent market.

Shrewd investors are starting to take up the chance of early off-plan purchases with big discounts. Researching this area, we have identified one particular investment opportunity which outshines the rest.

In the idyllic setting of Pranburi, just a few minutes south of Hua Hin, in 2019 the Grand Marina development project got under way. We have identified this as probably the best buy-to-let investment currently available.

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