Potential investors who are currently considering an overseas property purchase in Asia will probably have Thailand on their short list at the outset. Upon looking into it, they will find property investment in Thailand is currently a two-sided coin.
On the one hand Bangkok has recently been listed among the top 20 tourism destinations in the world, which should make a property investment there a good one. Dig a little deeper, however, and you find that capital appreciation, previously strong in Thailand (along with all factors to be considered before investing), has been detrimentally affected by the recent political turmoil, namely the September 2006 coup.
Nevertheless, Thailand is still among the best Asian countries for foreigners to invest in. There is no inheritance tax or gift tax. Capital gains tax is charged like income tax at the standard rate, and foreigners can own condominiums freehold. There are other ways for foreigners to buy in Thailand, but a condominium purchase is the easiest. Even with the political turmoil, rental yields are still around the 8% mark in top tourist destination - Bangkok.
Another rising star in Asia's tourism industry is the Thai island of Koh Samui, which has been largely unaffected by turmoil on the mainland, and where potential investors will find mostly resort property. As tourism expands on the island, and it begins to attract more of the high-end market as opposed to primarily back-packers, these resort villa properties can fetch yields of 10-12% quite easily, and capital appreciation is conservatively estimated at around the 15-20% mark.
Total transaction costs are a moderate 10-12.3% in Thailand, but there is a little complication over the computation of buying costs. Specific business tax and stamp duty are paid on whatever is higher - declared or assessed value. Both parties must have their own solicitor.
Overall, a Thailand property investment can be a very rewarding endeavour, especially if you are purchasing a holiday home with a view to renting it out when not in use.
Article comments
1 - G Reed
When will the Thais stop laughing? every time it is mentioned about sinking (drinking) funds (money taken by developers from clients in trust for long term building problems)?? Condo Act widely published as more protection for foreigners and Thais alike, but who is going to enforce it? Has anyone tried to find the Consumer Protection office Its there some where" but not as we know it" as they say? The banks (lawyers as well) say you can't set up an account for condo Committee unless it has a letter from committee and majority of it members as conformation, bull sh.. how come they allow developers to use there own accounts to accept client trust sinking and management money without a second thought? How come accountants don't alert authorities when they find sparse and irreconcilable book entries? How come firms of Lawyers don't expose their clients or even warn them about breaking the law? how come developers think "this is Thailand we can throw money at it and all will be sorted"? Besides GREED, LIES, BULLYING REAL ESTATE OPERATORS, DEVELOPERS (if their advertising tells lies they will be dealt with by the law) promises adverts? IT WOULD BE NEARLY IMPOSSIBLE TO FIND ON PIECE OF TRUTH in any of their media or web information and direct verbal promises by directors and their unreal Estate cohorts. So when will this piece of law actually be enforced? along with the condo Act sounds nice but when it gets down to the nitty gritty if enforced Pattaya would become a ghost town.. well if is not enforced it will become a ghost town lets see how many smiles there are when that eventually happens.... print this if you dare!!!! Or CARE