CREATIVITY AND CREATION MAKE DREAMS COME TRUE. WHAT IS YOUR DREAM?

In Thailand, foreigners are prohibited to own land. However, don’t fret. Your dream of owning Koh Samui land isn’t necessarily over!

There are multiple legal ways for you, a foreigner, to own property in Koh Samui. You can still buy a place to live or rent out but it’s not as direct as purchasing land in your locality.

Follow these methods to get your own gorgeous apartment or villa. There are ownership methods to buy property in Thailand as a foreigner outlined below.

Foreign buyers also have to familiarize themselves with Thai land measurement units like “rai”, “ngan”, and “talangwah”. 1wah is 4 square meters. 1ngan is 100 wah or 400 square meters 1 rai is 4 ngan or 400 wah or 1,600 square meters.

Setting up a Thai Limited Company ownership option is the most common land ownership option for foreign property buyers. Essentially, it has the company you’ve set up to buy the Thai property on your behalf.

The caveat here is that the company should have about 51 percent (or more) of its shareholders as Thai citizens. The rest of the 49 percent (or less) of shareholders can be foreigners.

You can avail of the 30 + 30 + 30 leasehold deal. You can lease land in Thailand for 30 years and own the structure built on it. After 30 years, you can renew the lease twice, allowing you a maximum of 90 years of leasehold ownership.

This is as opposed to freehold deals, which gives you absolute ownership of real property that you can own indefinitely. For foreigners, you can get freehold ownership of a condo title or by freehold acquisition from a company buying the property on your behalf.

You can also go the Marriage Property route. In other words, by getting a Thai citizen spouse, the two of you can share ownership of Thai property and land by marriage.

Some of the best and most popular locations tobuy villas from or even visit in Koh Samui include Chaweng Noi, Lamai, Choeng Mon, Bophut, Taling Ngam, and Maenam.

1. Chaweng Noi: It is the main tourist area known for its nightlife and sandy beaches. It’s also filled with beach bars galore along withproperties. Most tourists congregate here for shopping, fine dining, and regular parties.
2. Cheong Mon: It is the most upscale area of the island. This means on top of having a quality beach, Cheong Mon is also home to high-quality villas and developments as well as complete amenities.
3. Bophut: It is the best family area for those looking for apermanent residence. You can avail yourself of more affordable housing and apartments in the beach town while immersing yourself in local culture.
4. Taling Ngam: It is known for its untouched nature. In other words, you’ll be closest to Mother Nature as a Taling Ngam resident, with the place exuding a simpler provincial life rather than a touristy existence.
5. Maenam: Maenam is renowned for its affordable tours and vacations. If you’re a tourist who wishes to indulge in what tourists are usually after, you can book various tours and hikes beloved by many adventurous backpackers out there.

To set up your Thai limited company, you essentially need to prepare all the relevant paperwork prior to registration and have local Thai shareholders available.

Second, identify the directors, promoters, and shareholders. You need at least 3 promoters and shareholders and 1 director to register the company and set it up.

File a Memorandum of Association (MOA) to the Department of Business Development (DBD) in the Ministry of Commerce.

Convene a statutory meeting once the company’s share structure has been defined, the Board of Directors have been elected, an Auditor has been appointed, and the MOA has been approved.

Register the company. The Company Directors must submit an application to register the company within 3 months of the date of the Statutory Meeting complete with registration fees.

After registration, open a company bank account and put your capital there.

Register for corporate income tax and VAT. Register a social fund, apply for Visa, and apply for a work permit.

You should also have a minimum capital of ฿2 million per foreigner hired to get them a Non-Immigrant “B” Visa and a Work Permit to work in Thailand.

Your Thai limited company should have at least three shareholders and have majority Thai shareholders at that (51 percent or more).

Their participation is limited because the directors manage the company affairs. The liability of each of them is limited to the “par value” of their shares.

If you’re an individual property owner who wishes to lease or rent out your property for commercial use, a 12.5 percent Housing and Land Tax shall be collected from your yearly rental revenue.

Its value is in accordance with whichever is higher—the lease agreement or the yearly assessed value by local authorities. Local authorities can adjust the amount if the owner’s self-declared value is too low based on various factors.

Building and land tax exemptions are available for owner-occupied residences. However, if the owner has second or more properties under his name or bought on behalf of him (as a foreigner), these properties aren’t automatically exempt.

The owner is responsible for informing local authorities if the property is put into commercial use or leased out. He should thus pay rental tax earned before the end of February annually.

The Thailand tax burden is usually passed on to the tenant or lessee in the lease agreement.

Foreigners who can only lease the land can still be exempt from taxation as long as the house built on the leased land is under their ownership and serves as their residence (thus, it’s an owner-occupied house).

The property tax is the responsibility of the owner of the leasehold apartment or condominium when he rents out his units. Again, this tax burden is usually passed to the tenant or lessee.

If a Thai company owns the land, buildings, or developments of a property and they’re used as a rental property, holiday home, or director’s residence, the company is responsible for paying the land and housing tax even if the company doesn’t operate a business with it or gets any income out of it.

A foreigner living in a property bought on his behalf by the company can’t have that property regarded as “owner-occupied”, thus it’s not exempt from property tax.

It costs approximately £60, $70, €70, or ฿2,600 a day to live in Koh Samui as a vacationer or tourist. For higher-end deals, you need to loosen your purse strings more.

It also depends on where you wish to stay and what you want to eat or drink. If you’re capable of eating cheaply, most of your tourist budget will be taken by accommodation.

In regard to the cost of living in Koh Samui as a resident, you need to have at least a monthly net salary of ฿13,000 ($365) to survive. You should have upwards of ฿26,000 ($730) or more to also be able to afford rent.

The cheapest restaurant in Koh Samui costs ฿100 ($2), local transport costs ฿50 ($1), and utilities cost upwards of ฿3,600 ($100) monthly plus ฿500 ($14) mobile phone plans and ฿500 ($14) Internet.

Rent also costs about ฿16,000 ($450) per month for 1-bedroom apartments in the city center.

Yes. Koh Samui isn’t only a high-demand location among tourists. Its many developments, off-plan, and resale properties are also rising in value as we speak.

It even serves as a high-yield investment for those who could afford to buy and rent out their own property, thus generating a substantial amount of income from the influx of renting tourists from all over the world.

It’s not only a high-yield investment. You can also buy a Koh Samui property as your retirement home of sorts, thus allowing you to retire in peace and in the middle of Southeast Asian paradise.

Koh Samui is already complete with its own hospitals, groceries, shopping malls, cinemas, international schools, transportation options, walkable streets, and beaches at every turn. Your investment will pay dividends in every which way.

The best ways to finance a Koh Samui property purchase includes an outright cash purchase (if available) and mortgage loans.

• Cash Purchase: If you have readily available funds, paying in cash is the most desirable option for the seller and you as the buyer. It’s because it simplifies things and eliminates the long wait for loan interest payments.

Your negotiating power can also improve by going the cash purchase route. For example, you can ask for discounts or better deals by proposing you pay for the property in cash or in brief cash installments.

Make sure you have adequate reserves of cash aside from the value of the property in order to cover for contingencies such as property maintenance, taxes, government fees, and unforeseen expenses.

• Mortgage Loans: The most common financing form for purchasing property is the mortgage loan. These loans are given by financial institutions such as banks. The property itself should serve as the security for the loans.

Mortgage loans require you to have strong credit and high income that help the bank feel secure in giving out their loan and having it paid along with interest. This is on top of the purchased property possibly defaulting to the bank if you fail to pay for it.

Interest rates and requirements should vary based on the location of the property and the financial circumstances of the lender.

Both off-plan properties and resale properties have their own respective pros and cons inherent to their nature. Choose the one that makes the most financial sense to you as a buyer.

• Off-Plan Properties: An off-plan property usually involves an empty lot or piece of land. It’s a property before a structure is built on it. It’s usually marketed to real estate developers and early adopters of new developments.

Off-plan properties give you the best investment opportunities compared to completed resale properties. It’s because you’re building something from scratch in accordance with your plans and goals.

By making an off-plan property investment, you can lock in an early price and get capital appreciation on the value of the land. You can also enjoy higher rental yields, a structure built to your specifications, favorable interest rates and loan packages, and better payment structures.

• Resale Property: A resale property is a previously purchased property sold to someone else. It can be a residence as well as an existing villa, condominium, or apartment.

In a commercial context, resellers buy cheap properties from wholesalers or manufacturers to resell the property to make a profit. It also refers to individuals or companies selling existing properties with structures already built on the land.

On the other hand, there’s benefits to be had from a good resale property deal, whether you’re dealing with a ready-made mansion, a fixer-upper, or if your best course of action is to demolish everything but you still bought the land at a good price.

Essentially, if you look around for resale property, you’re sure to find one that closely fits your requirements, thus saving you from needing to build a structure from scratch.

If you look for off-plan property instead, you can build a brand-new property of your dreams instead of paying endlessly for repair costs for the foreseeable future.

Every property has its own respective cost. Small bungalows obviously don’t cost as much as sprawling beachfront villas. Here’s a breakdown of their costs in price range terms.

Small bungalows cost ฿2 to ฿3 million ($56K to $84K).Garden-view villas with pools cost ฿5 to ฿7 million ($140K to $196K).Sea-view villas with pools cost ฿10 to ฿12 million ($281K to $337K).Beachfront villas can go upwards of ฿30 to ฿40 million ($843K to $1M) because of high demand and rising beachfront prices.

You can also avail of condominium and apartment options on Northeast Koh Samui, with 30 sqm units starting at ฿1 million ($30,000). When buying land plots for sale, consult with a lawyer to check the zone designation of the land to know what can and cannot be built from there, so that’s extra lawyer fees right from the start.

If you’re a foreigner, you’ll also need to pay for fees and have enough capital to set up a Thailand limited company that will buy Thai freehold properties on your behalf—this on top of finding a majority of Thai citizen shareholders (51 percent and above).

As for government fees and taxes, they include the transfer registration fee of 2 percent (normally shared by the buyer and seller), withholding tax of 1 percent (normally paid by the seller), specific business tax of 3.3 percent (normally paid by the Seller), and stamp duty of 0.5 percent (normally paid by the seller).