How to buy a property in Koh Samui, Thailand
How to buy a property in Koh Samui, Thailand?
Thailand is becoming one of the world’s top tourist destinations…
With an eclectic mix of remote tropical islands, vibrant and bustling cities, tempting food and exotic fruits, entertainment options, and wonderful, welcoming people.
Fun facts about Koh Samui!
Koh Samui is also known as ‘Coconut Island’, with its coastline covered in coconut palms.
This emerald gem in the southern Gulf of Thailand is the country’s second largest island and is fast becoming one of the most sought after destinations for tourists and investors alike.
Koh Samui is surrounded by abundant lush vegetation and stunning natural beauty, with a relatively short storm season compared to other islands, leaving around 10 months of ideal weather for sightseeing, sunbathing, adventure seeking or whatever. your heart desires.
The island also has one of the most charming 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 have never visited the island before, beware… you may fall under the hypnotic spell of Samui’s Secrets.
The growing popularity of the island as a major tourist destination has led to a large number 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, meaning construction is often prohibited.
The demand and desire to own property on this idyllic island is rapidly increasing, whether for a lifestyle investment, holiday retreat or permanent residence. New luxury villas are now a hot property!
Thailand’s property laws are naturally designed to curb potential overdevelopment, so one must be flexible, patient and prudent when purchasing property.
So before you part with your hard-earned money and pick up the keys to your new Koh Samui property, you’ll want to do your research and plan to make the most informed and safe property purchase.
Explanation of property ownership in Thailand
In Thailand it is prohibited to own land directly in the name of a foreigner. But wait, your dream of owning a property in Koh Samui is still possible!
Buying property on Koh Samui involves a careful understanding and choice of property ownership options, whether leased or owned. This is the first ‘T-junction’ decision you will have to make early in the buying process.
Leasing property is the most common, economical and convenient option for foreigners to purchase property in Thailand.
A foreigner can legally lease 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. 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 can be one of the safest and easiest ways to directly own freehold title (known in Thai as ‘Chanote’).
But what if you need a larger single-family property with multiple bedrooms and a garden?
Freehold ownership of land or houses may also be owned directly by a Thai person or partner’s name, or through a Thai limited liability company.
Foreigners can set up Thai limited companies, partnering with local Thai citizens and, with the right business structure, can own the company and in turn have control over the land and property.
Additional security provisions can be put in place to protect the owner of the foreign company, for example; placing the building in the foreigner’s personal name and also forming a ‘back lease’ on the company land to the foreign owner.
This prevents the sale of the land while the loan/lease is still valid.
Work with estate agents on Koh Samui
As with many things in Thailand, there are a plethora of real estate agents on Koh Samui, but finding a reliable one isn’t always easy.
Many real estate agencies operate exclusively online, without an office and sometimes without registration. This can be risky, in case problems arise in a purchase and it becomes difficult to locate the company or the people.
Therefore, it is recommended to choose an established estate agency, preferably with a local office and a team of experienced professionals, to maximize your chances of finding the perfect property and 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 1-5% are common on new projects.
However, a qualified agent should know how to negotiate smoothly on your behalf to get you the best possible price in the market.
They must also provide preliminary verifications of the property, such as verifying the access roads, the title of the property and what is included or excluded in the offer.
However, fundamentally the details of these legal checks should be carried out by an independent lawyer, before the final contracts are signed.
So choose your agent as carefully as you would choose your property or attorney! An experienced Koh Samui real estate agency should help you navigate your property purchase in the best possible way.
How to choose the right property on Koh Samui?
With such a wide selection of properties available on the Koh Samui real estate market, it can seem confusing to make 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 layout of the terrain.
– What areas seem the safest for families?
– Which areas are 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 is the cost of maintenance fees? Is there a ‘cap’ on its increasing cost?
– What are the sinking fund costs? Are there rules about ‘topping up’ 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, make new visits, talk to other owners, until you feel completely satisfied to make a deposit on the property.
A properly drafted booking agreement should cover you against a refund of a paid deposit, if statutory due diligence checks fail.
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 checks.
Once the legal checks are complete and you are ready to move forward with purchasing your dream property on Koh Samui, your solicitor must draft a carefully drafted Purchase and Sale Agreement.
This contract should cover everything including: the names of both parties, the address of the property, the price and Chanote number of the land, the associated costs, the payment structure, etc.
When dealing with local Thai owners, it is recommended to leave this to a professional as they can easily be misunderstood or offended due to different cultural idiosyncrasies.
After all contracts have been signed and payments made, you are finally ready for the transfer of ownership and to pick up the keys to your new dream home!
While it’s not always as easy to buy property in Thailand as it can 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 to sit back and savor the moment with a cocktail poolside in your own paradise.