Buying a condo in Thailand is a great way to gain exposure to a housing market that has experienced rapid growth over the past decade.
Best of all, properties in Thailand are cheap (in comparison to Europe and the US) and if going the ‘off-plan’ route – you can typically pay the condo off in instalments.
The end-to-end process can often be completed in less than a fortnight, as the Thailand property scene is pretty-much burden-free for foreigners.
With that said, it can be a confusing and daunting process if this is your first time investing in the Thai real estate market.
As such, this guide will run you through the ins and outs of how to buy a condo in Thailand- off-plan.
Step 1: Understand the Benefits and Risks of Going Off-Plan
First and foremost, you need to decide whether you are comfortable buying a condo in Thailand that is ‘off-plan’.
For those unaware, an off-plan property is one that has not been built yet. You might be purchasing the condo before construction has even begun, right up to a few weeks before the expected completion date.
Now, buying a condo in Thailand that if off-plan comes with both its pros and cons, which I elaborate on in more detail below.
Discounted Purchase Price
The most favourable aspect of going the off-plan route is that you will benefit from a lower purchase price. This is usually around the 20% mark. In other words, you are buying the condo at a price 20% lower than a similar unit in the same location that is already built – at the current market value.
- For example, let’s suppose that you are buying a 1-bedroom off-plan condo unit in Bangkok.
- A condo of the same size in the same neighbourhood is currently worth $80,000
- Using the 20% discount theory, you will be buying the off-plan condo at $64,000
Of course, the specifics are not as simple as this, as many variables need to be taken into account. Nevertheless, one of the main attractions of buying off-plan is the discounted price you get.
An additional benefit of buying a condo in Thailand off-plan is that you can usually pay in instalments. The specifics will again vary from project to project, as the terms are set by the respective developer.
With that said, you will sometimes be allowed to spread your payments out over the entire course of the construction phase.
- For example, if you buy an off-plan condo in March 2021 and the expected completion date is March 2024, this would get you 3 years of (usually) interest-free credit.
- As such, if you were buying an off-plan condo at $64,000 – that’s 36 monthly payments of $1,777.
Crucially, this is super-attractive for those of you that want to gain exposure to the Thai property market, but you don’t quite have the financial resources to purchase the condo in one lump sum.
Higher Levels of Risk
There are also negatives when buying a condo in Thailand off-plan. At the forefront of this is the increased risk that you are taking. After all, you are investing money into a financial asset that is yet to be built.
With this in mind, there is always the risk that the developer behind the project runs into financial problems. This has happened many, many times over the course of time – not just in Thailand, but globally. This was especially the case in the midst of the 2007/08 financial crisis.
Taking all of this into account, going the off-plan route when buying a condo in Thailand does allow you to grab a discounted price, alongside the opportunity to pay in instalments. But, you must be fully aware of the increased risk that you will be taking.
This is why it is crucial to do your homework on the developer, which is something that a good agent can help with. If these risks make you feel uncomfortable, then you might be better suited to buying a property that is ready to move into.
Step 2: Speak With an Agent
I can’t stress the importance of finding a great agent to do your bidding for you, so to speak.
Make no mistake about – in just about every corner you turn in Thailand – at least in places like Bangkok and Pattaya, you will find a new development plot. As such, you have thousands of potential condos at your disposal.
As a newbie, this can be somewhat daunting. Now, I should note that in the vast majority of cases, new condo projects are assigned to a select number of real estate agencies. These agencies are then tasked with promoting the project online with the view of attracting potential buyers.
For example, if you search through one of the many Thailand property websites – which are predominately in English, the off-plan listings that you see are marketed by the agency, as opposed to the actual developer.
With this mind, your best port of call is to have a look at a few condos that you are interested in, make a short-list in order of preference, and then speak with the respective agent. They can normally give you a call via WhatsApp for ease.
The key point here is that within the first 30-seconds of speaking with somebody, your gut-feeling will likely tell you whether or nor the individual is someone you feel comfortable dealing with. In other words, is the end-to-end process with the agent going to be seamless, and do they have your best interests at heart?
Finding you a Deal
You might already know which condo you want to buy, so then it’s just a case of going through the formalities. However, the agent that you speak with will likely have a few condo projects that they are involved in, so it’s well worth explaining what your goals are.
For example, are you looking for a condo in Thailand to live in, or is it purely on an investment basis? Similarly, maybe you are looking to rent the condo out on completion, and flip it straight on?
By using a great agent here, they will be able to advise if there is potentially a better project in the market as per your requirements.
Buying a property in your home country can be stressful – so imaging what the process is like in Thailand? Sure, Thailand is one of the easiest countries to buy a property as a foreigner. But, you are entering a market that you likely do not understand.
Using an experienced agent will mean that you don’t need to worry about any of the legalities. The agent will deal with everything on your behalf, which is crucial. Furthermore, should you have any questions or concerns about your purchase, the agent will be your first port of call.
Agent Fees are Sometimes Waivered on Off-Plan Deals
If you buy a ready-made condo in Thailand, you will all-but-certainly need to pay your agent a buyer’s commission. That’s just the nature of the game. After all, real estate agents are in business to make money.
With that being said, when you buy a condo in Thailand that is off-plan, you can often avoid the need to pay a commission to your agent. This is because the agent will collect their commission from the respective developer. From your perspective as a buyer, that’s a win-win situation.
Step 3: Confirmation, Passport, Booking Fee
Once you have found an off-plan condo in Thailand that you want to buy, it’s then a case of confirming your interest. In order to do this, you will first need to provide a copy of your passport and a document that validates your residential address. You will normally supply this to the agent, who in turn, will forward it onto the developer.
Then, you will be asked to send over a ‘booking fee’, which is usually in the region of 100,000 Baht (about $3,300). This is essentially a payment to confirm your interest in the property. The agent will then give you details of which Thai bank account to send the funds to.
Now, to be absolutely sure that everything is above board, I would suggest getting in touch with the developer and ask them to also send you their bank account details. This simply ensures that the details provided by the agent are correct.
As soon as the booking fee payment is received by the developer, the condo will be assigned to you and taken off the market.
Step 4: Contracts and Deposit
The next step is to sign the contracts and pay a deposit. Regarding the former, this is usually 20-30% of the condo price, less the booking fee that you have already paid.
- Let’s say that the off-plan condo you are buying is worth $80,000
- You pay the equivalent of $3,000 as a booking fee
- The deposit fee is 20% of the condo price – so that’s $16,000
- However, you’ve already paid $3,000 – so the balance that would need paying is $13,000
As I cover shortly, the specific figure can and will vary depending on the terms outlined by the developer. Nevertheless, the above deposit is usually payable within 14-28 days after the developer receives the booking fee.
In the meantime, you will also need to sign a bunch of contracts. If you are able to visit Thailand to do this in-person – great. If not, the process can be facilitated remotely. It will, however, require original copies to be signed, meaning the use of a courier.
If you are planning to do it this way, the process is as follows:
- You need to print all of the documents that are sent to you by the agent via email
- You usually need to sign each page – check with the developer
- You also need to sign a copy of your passport – again, check with the developer
- Once everything has been signed (usually two copies of each document), you then need to send the documents to the developer via courier
- In turn, the developer will sign their part of each contract and courier the documents to you
Once again, this is a cumbersome process that an agent can help you with. For example, if you are not sure which pages to sign etc. then the agent can advise – usually through Whatsapp or email.
As a side tip, it’s best to use a reputable courier company like DHL, UPS, or TNT. In doing so, you can track the delivery in real-time. Plus, no matter where you are in the world, the documents usually arrive in less than 2-3 days.
Step 5: Instalments
As I discussed earlier, one of the main attractions of buying an off-plan condo in Thailand plan is that you can pay the property off in instalments.
Although the specific payment terms will vary from developer-to-developer and project-to-project, you will often find that a 20% deposit is required upfront. After that, you might find that you have the entire span of the construction period to meet your payments.
In other cases, you might be capped to a maximum term of 2 years, or even less. Just make sure that you have a firm grasp of what the developer expects from you before taking the financial plunge.
I should also note that some developers have a fixed payment plan in place, while others allow you to set your own payment timeframes – as long as the full amount is received by the deadline. For example, you might have 2 years to pay $50,000.
You might decide to do is over two instalments of $25,000 – or 20 instalments of $2,500 etc. Additionally, if the developer requires a certain amount within a specific timeframe (like 2 years), you might find that the final balance of 20% is only required once the keys are handed over.
As you can see, there are lots of variations in payment terms when you buy a condo in Thailand that is off-plan. In fact, even if the terms don’t work for you, your agent might be able to negotiate something that is more in line with your incoming cash flows. This needs to be done before the deal is confirmed, though.
To give you an idea of what a payment structure looks like, this is a deal that I came across a few days ago – converted into US dollars for ease:
- 1 bedroom condo in a 45-storey tower in Bangkok – expected completion date June 2024
- The total price is $85,000
- You pay a 20% deposit upfront – so that’s $17,000
- The developer requires the next 60% within 2 years – so that’s $51,000
- If you wanted to pay monthly, that’s 24 monthly payments of $2,125
- Then, in June 2024 when the condo is built and the keys are handed over, you will pay the final 20% balance – which is $17,000
Step 6: Completion
When you buy an off-plan condo in Thailand, you will always be provided with an ‘expected’ completion date. It doesn’t matter where you are in the world – expected completion dates can and will vary. For example, you might get lucky and the developer hits the target.
But, the likelihood is that it might be a few months after this date. This is just the nature of the construction game. As such, try to avoid getting frustrated if the project takes slightly longer to complete than you had hoped for.
The main thing is that the project is completed. And don’t forget, all being the well the value of the condo will continue to appreciate anyway – as it has hopefully done throughout the duration of the construction period.
Nevertheless, once the project is complete and the developer is ready to hand the keys over, you will then be required to pay a ‘transfer’ tax. In Thailand, this amounts to 2% of “appraised value of the property”.
With that said, going off-plan means that the developer will be required to pay half of this fee. This means that you are only required to pay 1%.
And that’s it – the process of buying a condo in Thailand off-plan really is a simple process. In fact, there is no requirement for you to even visit Thailand at all – as everything can be done remotely.
The most important thing is that you do some research on the agent in question. After all, they are the crucial bridge between you and the developer.
And of course – while there are many benefits of going the off-plan route – whether that’s being able to invest at a discount, pay in instalments, or pay just 1% in transfer tax, it would be foolish to brush aside the risks.
At the forefront of this is the unlikely – but not impossible, prospect that the developer runs into financial problems and thus – the condo project is not completed.
Can a foreigner buy a condo in Thailand?
Yes, anyone can buy a condo in Thailand. The main thing to mention is that of each condo complex, only 49% of units can be owned by foreigners. The rest must be in the name of a Thai citizen.
How much does a condo cost in Thailand?
How long is a piece of string? In other words, there are condos on the market for the equivalent of $40,000 - right up to 6-figures. This is no different from any other housing market around the world.
Can you buy a condo in Thailand in instalments?
Yes - but only if you are buying the condo 'off-plan'. In some cases, you can pay a 20% deposit upfront, and the balance over the course of the construction period.
Should I buy a condo in Thailand on my own, or use an agent?
Without a doubt, you are strongly advised to utilize the services of an agent. In doing so, the agent will take care of the entire end-to-end process for you - from singing the contracts to handing over the keys.
What is the transfer tax when you buy a condo in Thailand?
The transfer tax is collected by the government once the keys are handed over. This is 2% of the appraised value of the property. If going the 'off-plan' route, this is split between you and the developer.