How To Buy Property in Koh Samui, Thailand
How To Buy Property in Koh Samui, Thailand?
Thailand is becoming one of the top travel destinations in the world…
With an eclectic mix of remote tropical islands, vibrant bustling cities, tantalising food & exotic fruits, entertainment options and wonderful welcoming people.
Koh Samui Fun Facts!
Koh Samui is otherwise known as ‘Coconut island’ – with its coconut infringed coastline.
This emerald gem in the South Gulf of Thailand is the second biggest island in the country and rapidly becoming one of the most sought after destinations with holiday makers and investors alike.
Koh Samui is surrounded by abundant lush greenery and stunning natural beauty, with a relatively short stormy season compared to other islands, leaving about 10 months of ideal climate for sightseeing, sun-bathing, adventure-seeking or whatever your heart desires!
The island also has one of the most charming International Airport in Thailand; providing an array of direct flights to Bangkok, Hong Kong, China, Singapore and others, making it highly convenient to travel to this peaceful heavenly paradise.
If you’ve never visited the island before, beware… you may fall under the hypnotic spell of Samui’s Secrets.
The increasing popularity of the island as a top tourist destination has given rise to a great number of foreigners looking to buy property in Koh Samui.
In order to protect the island’s natural beauty and beaches, much of the land on Koh Samui is protected by the government, thus meaning that construction is often prohibited.
The demand and desire for property ownership on this idyllic island is rapidly rising, whether it be for a lifestyle investment, a holiday retreat or for a permanent residence. New luxury villas are now a hot property!
Thailand property ownership laws are naturally designed to curb potential over-development, as such one must be flexible, patient and prudent in buying a property.
So before you part with your hard-earned cash and collect the keys for your new Koh Samui property, you will want to research & plan in order to make the most informed and secure property purchase.
Thailand Property Ownership Explained
In Thailand, to own land directly in a foreigner’s name, is prohibited. But wait – your dream of owning a property on Koh Samui is still possible!
Buying a property in Koh Samui, involves a careful understanding and choice of property ownership options, whether it be leasehold or freehold. This is the first ‘T-junction’ decision you will have to make early on in the buying process.
Leasehold Ownership is the most common, cheapest & convenient option for foreigners to own property in Thailand.
A foreigner can legally lease land for a maximum tenure of 30 years. This 30 year lease can further be renewed or extended depending upon the contract between the buyer and seller.
Another option is foreign freehold ownership. As a foreigner you can legally purchase the freehold of a condominium unit, providing it falls within the 49% quota of the total units in a condominium project.
Foreign condominium ownership maybe one of the safest and easiest ways to directly own a freehold title deed (known in Thai as ‘Chanote’).
But what if you need a larger detached property with multiple bedrooms and a garden?
Freehold Ownership of land or houses can also be owned directly in a Thai person or partner’s name, or via a Thai limited company.
Foreigners can set-up Limited Thai companies, partnering with local Thai citizens, and with the right company structure they can be the owner of the company, and in turn have control over the land and property itself.
Further security provisions can be put in place to protect the foreign company owner, for example; placing the building in the foreigner’s personal name and also forming a ‘lease-back’ on the land from the company to the foreign owner.
This prevents the sale of the land whilst a loan/lease is still valid.
Working with Koh Samui Real Estate Agents
As with many things in Thailand, there is a multitude Real Estate Agents in Koh Samui, but finding a reliable one is not always easy.
Many real estate agencies operate purely online, with no office and sometimes with no registration. This can be risky, incase problems do arise within a purchase and it becomes hard to track down the firm or the individuals.
Hence, it is recommended to choose an established property agency, preferably with a local office and team of experienced professionals, to maximize your chances of finding the perfect property and minimize any problems arising in the future.
Generally properties in Koh Samui are often negotiable in price, with larger discounts more common on older ‘resale’ properties, whereas smaller discounts of around 1-5% are common on new projects.
However a skilled agent should know how to negotiate smoothly on your behalf to get you the best price possible on the market.
They should also provide preliminary property checks, such as checking access roads, title of ownership and what is included or excluded in the offer.
However fundamentally the details of these legal checks should be performed by an independent lawyer, prior to signing final contracts.
So choose your agent as carefully as you would choose your property or lawyer! An experienced and Koh Samui Real Estate Agency should help you navigate your property purchase, as smoothly as possible.
How to choose the right Koh Samui Property?
With such a wide selection of properties available in the Koh Samui Property market, it might seem confusing when making a decision on which property to select.
Before you engage with services of a local Real Estate Agency or legal firm, make sure you do your own research. Drive around and get to know the lay of the land.
– Which areas seem the safest for families?
– Which areas are most popular for rentals or private living?
Remember, these are personal preferences, so travel around the island and do your own research.
After choosing a Real Estate agent, it is recommended to visit the properties if possible and at different times of day or night.
Ask as many questions to yourself and to your agent as possible:
– What are the cost of maintenance fees? Are there any ‘caps’ on its increasing cost?
– What are the sinking fund costs? Are there rules on ‘top-up’ of sinking fund costs in future?
– Are there local amenities, such as schools, shops, hospitals & banks close by?
– Is the property quiet at night-time? Is there a noisy restaurant or cockerel next-door?
Try not to feel pressured by any agent, developer or owner, even if it is the last property left in the project – take your time, ask questions, conduct revisits, talk to other owners, until you feel completely satisfied to make a deposit on the property.
A correctly drafted reservation agreement should cover you against a refund of a deposit paid, if legal due diligence checks do not pass.
Be sure your deposit is ideally held by the lawyer or agency – preferably not directly to an owner or to a developer, until your lawyer has completed the checks.
After legal checks are complete and you are ready to move forward with the purchase of your dream Koh Samui Property, a carefully worded Sales & Purchase Agreement should be drafted by your lawyer.
This contract should cover everything including: the names of both the parties, property address, price and Chanote number of the land, associated costs, payment structure etc.
When dealing with local Thai owners it is advised to leave this to a professional, as they can easily misunderstand or become offended due to different cultural idiosyncrasies.
After all contracts have been signed and payments have been made you are finally ready for the transfer of ownership and to collect the keys to your new dream home!
Final Thoughts
Whilst it is not always as easy to purchase property in Thailand as it may be in your own country, with the right strategy, support and informed choices it can be both emotionally and financially rewarding.
After all your hard-work, it’s time sit back and savour the moment with a cocktail by the pool, in your own piece of paradise.