How to buy a property in Koh Samui, Thailand?
Thailand is becoming one of the top tourist destinations in the world …
With an eclectic mix of remote tropical islands, vibrant and bustling cities, tempting food and exotic fruits, entertainment options, and wonderful, welcoming people.
Koh Samui Fun Facts!
Koh Samui is also known as ‘Coconut Island’, with its coastline infested by coconuts.
This emerald gem in the southern Gulf of Thailand is the second largest island in the country and is fast becoming one of the most sought after destinations by tourists and investors.
Koh Samui is surrounded by abundant lush vegetation and breathtaking natural beauty, with a relatively short storm season compared to other islands, leaving about 10 months of ideal weather for sightseeing, sunbathing, adventure seeking, or whatever you want. .
The island also has one of the loveliest international airports in Thailand; providing a variety of direct flights to Bangkok, Hong Kong, China, Singapore and others, making it very convenient to travel to this peaceful heavenly paradise.
If you’ve never visited the island before, be careful … you may fall under the hypnotic spell of Samui’s secrets.
The island’s growing popularity as a premier tourist destination has resulted in large numbers of foreigners looking to purchase property on Koh Samui.
To protect the island’s natural beauty and beaches, much of the land on Koh Samui is protected by the government, which means that construction is often prohibited.
The demand and desire to own a property on this idyllic island is increasing rapidly, whether it is for a lifestyle investment, a vacation retreat, or a permanent residence. The new luxury villas are now a trendy property!
Thailand’s property laws are naturally designed to curb the potential for overdevelopment, so one must be flexible, patient, and prudent when purchasing property.
So, before you part with your hard-earned cash and collect the keys to your new Koh Samui property, you’ll want to do your research and planning for a more informed and secure property purchase.
Thailand Property Explanation
In Thailand, it is prohibited to own land directly in the name of a foreigner. But wait, your dream of owning a property on Koh Samui is still possible!
Buying property on Koh Samui involves a careful understanding and choice of property ownership options, whether it be leased or freehold. This is the first ‘T-junction’ decision you will have to make early in the buying process.
Rental property is the most common, cheapest and most convenient option for foreigners to own property in Thailand.
A foreigner can legally lease the land for a maximum period of 30 years. This 30-year lease can be renewed or extended depending on the contract between the buyer and the seller.
Another option is foreign freehold ownership. As a foreigner, you can legally purchase freehold ownership of a condominium unit, as long as it is within the 49% quota of the total units in a condominium project.
Foreign condo ownership is perhaps one of the safest and easiest ways to directly own a property title (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 held directly in the name of a Thai person or partner, or through a Thai limited partnership.
Foreigners can establish limited Thai partnerships, partnering with local Thai citizens, and with the right business structure they can own the business and in turn have control over the land and property itself.
More security provisions can be put in place to protect the owner of the foreign company, for example; place the building in the foreigner’s personal name and also form a ‘leaseback’ of the company’s land to the foreign owner.
This prevents the sale of the land while a loan / lease is still valid.
Working with Koh Samui real estate agents
As with many things in Thailand, there are a multitude of real estate agents on Koh Samui, but finding a reliable one is not always easy.
Many real estate agencies operate exclusively online, without an office, and sometimes without registration. This can be risky, in case problems arise within a purchase and it is difficult to locate the company or people.
Therefore, it is recommended to choose an established real estate agency, preferably with a local office and a team of experienced professionals, to maximize your chances of finding the perfect property and to minimize any problems that arise in the future.
In general, properties on Koh Samui are usually negotiable in price, with larger discounts more common on older ‘resale’ properties, while smaller discounts of around 1 to 5% are common on newer projects.
However, a qualified agent must know how to negotiate smoothly on your behalf to obtain the best possible price in the market.
They must also provide preliminary property verifications, such as verification of access roads, property title, and what is included or excluded in the offer.
However, fundamentally, the details of these legal controls must be carried out by an independent lawyer, before signing the final contracts.
Choose your agent as carefully as you would choose your property or your attorney! An experienced Koh Samui real estate agency should help you navigate your property purchase, as smoothly as possible.
How to choose the right property in Koh Samui?
With such a wide selection of properties available on the Koh Samui property market, it can seem confusing when making a decision on which property to select.
Before hiring the services of a local real estate agency or law firm, be sure to do your own research. Drive and know the terrain.
– What areas seem the safest for families?
– What areas are the most popular for rentals or privacy?
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 the day or night.
Ask yourself and your agent as many questions as possible:
– What are the costs of maintenance fees? Are there ‘limits’ to your increasing cost?
– What are the costs of the sinking fund? Are there rules about ‘recharging’ sinking fund costs in the future?
– Are there local services such as schools, shops, hospitals and banks nearby?
– Is the property quiet at night? Is there a noisy restaurant or a rooster 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, visit, talk to other owners, until you are completely satisfied with making a deposit. on the property.
A properly worded reservation agreement should cover you against the refund of a paid deposit, if the legal due diligence checks do not pass.
Make sure your deposit is ideally held by the attorney or agency, preferably not directly to an owner or developer, until your attorney has completed the verifications.
Once the legal verifications have been completed and you are ready to move forward with the purchase of your dream property in Koh Samui, your attorney should draft a carefully drafted Purchase and Sale Agreement.
This contract should cover everything, including: the names of both parties, the property address, the price and the Chanote number of the land, the associated costs, the payment structure, etc.
When it comes to local Thai homeowners, it is recommended to leave this up to a professional as they can be easily misinterpreted or 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
While it is not always as easy to buy property in Thailand as it can be in your own country, with the right strategy, support, and informed options, it can be emotionally and financially rewarding.
After all your hard work, it’s time to sit back and savor the moment with a poolside cocktail, in your own piece of paradise.