We could make a lot of suggestions and tips for buying property in Phuket, but some are more relevant than others.
We’ve been asked many times for our “Top 5 Tips” for anybody considering buying property in Phuket (or anywhere in Thailand), so let’s break down a number of them here:
– Seek the Most Effective Legal Representation
– Do Not Be Hasty
– Perform due diligence on the projects that you’ve been presented with
– Evaluate Your Sales Representative
– Get a Good Understanding of Thai Law
Unfortunately, despite the fact that it is a lawyer’s obligation to defend their client, it has been clear over time that far too many foreign nationals, even by competent lawyers, are given inadequate advice.
If you have your mind made up about purchasing a luxury townhouse or villa, you should be mindful that foreigners are not legally permitted to buy landed property in Thailand under current rules, and doing so has risks.
Many lawyers will, despite this fact, still attempt to convince clients that using a Thai corporation to purchase a property in Thailand is absolutely permissible. On several occasions, courts have concluded that this goes against the spirit of Thai law on many different occasions.
When it comes to foreign shareholders, it’s not technically illegal for a Thai company to purchase a villa, but it will become illegal if the following happens:
(a) The foreigner in question has a controlling stake in the company, which is really just a holding company and therefore does not trade, and/or
(b) Thai nominees make up the rest of the shareholders. Any company formed for the purpose of purchasing a landed property or a villa would very likely be declared invalid in court.
Bear in mind that it is entirely acceptable for a foreigner to establish a genuine Thai company with valid Thai shareholders, and that company may acquire landed property as long as it is 100% legally compliant. The company must be a legitimate enterprise that generates income, files audited financial statements, and pays taxes.
Furthermore, some lawyers may advise clients that lease extensions beyond the first 30 years are permitted if specified in the lease agreement or an amendment.
This is yet another “grey area” in which the buyer may be put in jeopardy. The legal community is divided on the legality of extended leases since they are “not in the spirit of the law.”
The best case scenario would be the cancellation of the extended clause if the courts decide against extended leases. The worst-case scenario is that the first 30-year lease is voided, resulting in the loss of your property and the money you put into it.
Our Advice
Anyone that’s seriously searching for tips for buying property in Phuket should firstly spend time researching and finding a good lawyer than they do hunting for a good property.
We will not propose a specific individual or company in order to prevent any conflict of interest – or the perception of a conflict. We urge everyone to obtain independent legal counsel.
As The Thai’s Say, “Cha-Cha” – Slow It Down
There is no reason to rush if you already live on the island. Take your time and don’t make any rushed decisions.
If you are on vacation, have a limited amount of time, and feel unable to make a choice this trip, schedule it for a future trip.
You’ll discover that in practically every aspect of life, a relaxed decision is more likely to be an accurate one. By giving yourself time to think about it (sometimes literally), you’ll be able to ponder on and evaluate parts of the purchase that you may have overlooked if you had hurried into it.
This is especially true with regard to real estate selections. If you’re looking to buy a home in Phuket, you should never be in a hurry. So don’t force yourself to make a quick choice, and don’t give in to pressure from a salesperson or anybody else who is solely interested in getting your business.
You clearly don’t want to miss out on a fantastic deal by dragging your feet, so if you’re certain it’s the property you want, go for it! But only if you’re certain it’s the right choice.
Purchasing real estate is a major life choice. It is absolutely not a decision that should be made hastily, since this is when individuals are more likely to make mistakes, suffer from buyer’s remorse, or both.
