You won’t believe Chinese real estate investors purchased 4,300 residential units worth 20.2 billion baht in 2024. Amazing isn’t it? For the last 15 years, Thailand offered apartments to Chinese families at affordable rates.
Meanwhile, in Shanghai, average housing prices range from $6,800 to $8,400 per square meter. However, a foreign real estate investor in Bangkok can fall victim to fraudulent brokers easily.
To stay protected in Thailand, let’s uncover the hidden risks:
Types of risks encountered by Chinese real estate investors
Risk 1: Off-Plan Scams
Did you know Chinese investors rent properties in key economic regions, from Bangkok to Chiang Mai? Due to this, they fail to consider the cost of investing in joint venture plans for Thai properties.
Therefore, they commit the mistake of leasing a property for business under a 60-day tourist visa.
Solution
“a foreigner who received permission to hold and use the land for any purpose, if no longer using the land or using it for any other purpose without receiving new permission, shall dispose of the land within 180 days”
Section 90 of the Thailand Land Code Act, B.E. 2497
Although such offers attract foreigners, accommodation rights are a major concern. If you desire to own property in Thailand, you’ll need land permission rights.
Risk 2: Illegal Land Ownership
Success comes with Safety! The competition for Thai property sales often makes Chinese investors negotiate beyond legal norms. A majority of condominiums in Thailand are sold at 3%- 5% to Chinese buyers by agents.
Thus, it invites corrupt-minded brokers to lure foreign investors into signing illegal agreements.
Solution
“a foreigner can acquire land in Thailand by the treaty”
Section 86 of the Thailand Land Code Act, B.E. 2497
However, no such treaty exists for Chinese real estate investors in Thailand. Additionally, you must transfer foreign currency and convert it into Thai baht before purchasing a condominium. Finally, a residential status via a Thai citizenship card is needed for land ownership.
To learn more about property rights in Thailand,
Risk 3: Fake Land Titles
Fake nominee structures make foreigners fall prey to fraudulent real estate agents. As a Chinese real estate investor, your focus lies in offering a lower cost of living to Chinese families in Thailand. Similarly, the Bangkok Post reported an incident involving Zoe Yu- a Chinese property buyer.
He fought for a refund after purchasing a 10-million-baht villa in Thailand under a void contract. Similarly, brokers manipulate many Chinese real estate investors to adopt Thai company names as their titles.
Solution
“An immovable property may be subjected to a right of usufruct (usufruct contract granting the right of usufruct)… which the usufructuary is entitled to the possession, use, and enjoyment of the property.”
Section 1417, The Civil and Commercial Code of Thailand
To avoid improper land title rights, a foreigner must register a usufruct agreement (สัญญาให้สิทธิเก็บกิน) to own land. This can be obtained for a 30-year lease period to avoid unnecessary risks.
You can obtain Nor Sor 3 Gor to have at least limited ownership, subject to conditions. The Nor Sor 3 Gor title can be mortgaged, sold, rented, or leased by a foreigner in Thailand. However, you can obtain this title deed only from the Phuket Provisional Land Office with a confirmation from the owner.
Risk 4: Mortgage Fraud
Did you know Chinese real estate investors prefer Chiang Mai more than other regions? It’s because 49-75% of the share lies in foreign ownership of the rented property space in condominiums.
However, the Pattaya office reported five Chinese nationals got arrested for posing as property brokers in Thailand. Finally, you’ll require guidance from authentic brokers to stay protected in Thailand.
Solution
You can apply for a mortgage loan in Thailand ranging from 5%-8% with a minimum loan period of 15 years. To be eligible, a foreigner must submit the following documents:
- Work Permit
- Copy of passport
- Copy of visa
- Last 6-months bank statement
- Evidence of other assets
A person whose right of ownership over a property is subject to a condition may mortgage such property only subject to such condition.
Section 706 of The Condominium Act of 1979
Under this condition, Chinese real estate investors in Thailand must be cautious about taking a property loan. In line with the mortgage conditions, you should consider land ownership rights before purchasing.
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We understand that more than profit, you come with the hope of settling peacefully in Thailand.
At Konrad Legal, we commit to providing expert consultation on property rights and title deeds in Thailand.
