SECTION 14: TRANSFERRING MONEY INTO PHUKET

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Transferring Money into Phuket

Any foreigner planning to purchase a property in Phuket must follow the correct procedures for transferring money into Thailand. If the proper steps are not taken it may prove impossible to repatriate the money when it comes time to sell your Phuket property, and for it to leave Thailand.

If more than US$ 50,000 is being remitted for the purchase of a Phuket condominium, a Foreign Exchange Transaction Form (FETF) must be requested from the receiving bank.

If funds are being remitted for the purchase of a villa, for a long term lease on a property, or to provide share capital for a Thai company, the FETF is not a statutory requirement. As long as all evidence of the original transaction can be presented and is clear, and there is proof that all requisite taxes have paid, the funds can be sent out of Thailand at a later date.

This process does take longer than it would with an FETF, so even if you are buying a villa in Phuket, it may be worth requesting one from your receiving bank/developer even though it is not required.

The FETF Required for a Phuket Condo Purchase

The Condominium Act states that any non-resident of Thailand who wishes to buy a condominium, must transfer the requisite funds from overseas specifically for that purpose. Regardless of the buyer’s country of origin, the funds must be sent in a foreign currency, to be converted into Thai Baht (THB) by the receiving bank upon arrival in the country.

In order to register a new condominium purchase with the Phuket Land Department, the FETF documentation must be presented to prove that the full purchase price was transferred into the Kingdom from abroad. (The instruction on the bank transaction form should also state that the payment is for the sole purpose of purchasing a condominium.) From an estate planning perspective, it is a good idea to always have multiple names (including children or grandchildren) added to the original telegraphic transfer, so they may be included on the FETF.

If the only way to arrange payment is by transferring funds to the developer directly, then the developer must arrange the FETF forms on behalf of the foreign buyer.

Taking the money out of Phuket at a later date is relatively straight forward, provided all the supporting documents can be presented. This is especially important if the funds have been borrowed from an overseas financial institution and/or there is an overseas mortgage on the condo.

Please also note that no repatriation of money will be possible until any income/capital gains taxes have been settled on the sale of the condominium. The FETF must also be presented to the tax authorities as proof of the legitimate ownership.

Whether ultimately remitting the funds back to a private account, or to repay a bank loan, the Foreign Exchange Transaction Form is an absolute requirement. By ensuring multiple names are on the FETF, not only is inheritance made easier, but funds can also be returned to the account of an heir. This document should be kept in a safe place at all times.

Again, it is wise to consult a good Thai lawyer throughout this process.

What Olaf Says About Foreign Currency Transfers & Taxes

When Transferring Money into Phuket – Document It Correctly

If you are investing in Phuket real estate, it is vital that you keep accurate, detailed records of all transfers, starting with the transfer of money into Thailand for the purchase. There are specific requirements you must understand before making your first payment. Your receiving bank in Phuket must prepare the correct documentation to confirm the transfer. The precise documents required will depend on purpose of the transfer and the amount you are sending.

If you are a foreigner, and you have purchased a freehold condominium unit in your own name, to register your ownership you will need the relevant documents for the transfer of each tranche of money related to the purchase. Once you have completed the transfer, have the necessary supporting documents from your bank, and have registered the property, please keep all the documents in a safe place.

If you have a safe at home, or a safety deposit bank at a bank, use these. The Foreign Exchange Transaction forms and title deed should be considered as important as any other valuables you possess. When it comes time to sell your Phuket condominium (or villa), these forms will be necessary in order to transfer your money out of Thailand and back to your home country.

All transfers of funds into Thailand must be documented!

Your Taxes: Pay Them!

For some reason, people in Phuket need a constant reminder of this universal requirement. They honestly don’t believe that accurately assessing their taxes is really that serious, and if you try to convince them they are wrong, they simply will not listen. Not only is the rental income earned subject to income tax, but if you live “rent free” in a company-owned property, the income not being collected is also taxable. Failure to pay your taxes could be grounds for your property (or in the event it is owned through a company, the company’s property) to be seized by the authorities and sold.

One tax which we have not yet mentioned is also one which people all-too frequently attempt to cheat on: the tax on the sale price of the real estate. This tax must be paid to the authorities at the time of purchase, but countless people attempt to reduce their “tax burden” by under-declaring the purchase price of the property.

Apart from the fact that it is a criminal act (tax fraud), it is also not smart from a commercial perspective. It does not matter if the property is owned by an individual or a company, when it comes time to resell the property, your tax liability will almost certainly be greater than what you think you “saved” by illicitly under-declaring the purchase price.

On top of that, you put yourself (and potentially your property) on the radar of the tax authorities for under-declaring your taxes for as long as you owned the property.

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Section 12: An Overview On The Thai Baht

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Section 14: How Low Are The Fees And Taxes When Purchasing Phuket Real Estate?

Buying and Leasing Property in Phuket Articles

SECTION 17: Phuket’s Ongoing Infrastructure Improvements

Phuket was once an island covered in jungle, with fishing villages dotted around the coastline, and with Phuket Town servicing the tin mining industry. Since the 21st century began in earnest, the island has seen incredible expansion, in both population growth, as well as incredible infrastructure, with new attractions and amenities springing up every year. As the world adjusts to the post Covid era, with more tourists arriving and with more Thais and foreigners calling Phuket their home, this infrastructure improvement program is unlikely to ease off or slow down.

SECTION 18: Phuket’s Negatives – Taking Off The Rose Coloured Spectacles

Although the Phuket property market tends to move independently of every other real estate market in the world, including the rest of Thailand, (except perhaps Koh Samui), it has not always been smooth sailing. Without the excessive borrowing seen in most countries, it has certainly been a much smoother trajectory, without any booms and busts. However, the real estate sector in Phuket has historically gone through many slowdowns, where prices have stagnated for many years, as demand waits to pick up to soak up any supply excesses. This section covers what to keep an eye out for in the years ahead, allowing investors to plan accordingly.

SECTION 19: The Black Swans of Tourism

This topic deserves its own section, mainly because the tourism sector has always been, and still is today, the lifeblood of the island. Without tourism, Phuket would have never seen the prolific growth it has experienced over the past 30 years, nor would the Phuket property market have reached where it is today. But unforeseen events do occur every few years, sometimes quite suddenly and cannot be discounted in the future. These may be local, national or international, but many do end up having an adverse effect on Phuket Island and its economy.

An Economic Overview for Thailand Property Investors

Explore the current economic landscape shaping Thailand’s property market. This in-depth overview highlights key growth indicators, foreign investment trends, infrastructure development, and what they mean for real estate opportunities in Thailand. Ideal for investors seeking insight into ROI potential, market stability, and future forecasts.

SECTION 9: Foreign Freehold Property Ownership in Phuket: Complete Condominium Guide

Condominiums are the safest way for foreigners to purchase real estate in Phuket. Condominium law allows 49% of the living area in each condominium project to be sold to foreigners as foreign freehold. Foreign freehold ownership means the foreigner will own the condo unit in perpetuity i.e. forever. This ownership is registered at the local Phuket Land Department. If a foreigner is considering buying property in Phuket, then this article explains everything you'll need to know, and why a Phuket condominium is the best option!!!!

SECTION 10: The Option of a 30-Year Leasehold When Buying a Villa in Phuket

We do not necessarily dispute the concept of a Phuket leasehold, however, anyone entering into a Phuket landed property leasehold, must be aware of all the risks associated with this type of legal arrangement. A leasehold in Phuket is very safe, in the sense that it guarantees you a 30 year lease period, but any term over and above this initial 30 year period must be viewed as a mere verbal promise. It is not guaranteed. It is simply a verbal guarantee to extend the lease for further renewals, but if denied, it is questionable whether it will upheld in a court of law in the favour of the foreigner.

SECTION 11: Using a Thai Company Limited To Own Villas, Town Homes and Landed Property in Phuket

It is possible for a foreigner to own a Thai company in Phuket, if the Thai company is adhering to all the corporate laws of Thailand. However, if that Thai Company owns landed property, there are other implications. A company set up with the sole existence of owning property for a foreigner, with shareholders, who have not invested in the Thai company, and who the foreigners does not even know, are deemed as nominees. This is illegal. All foreigners entering a sale and purchase agreement in which they either transfer ownership of shares of a Thai Company Limited, or set up their own Thai Company must know these rules and the laws governing Thai companies, and the legal implications of their company owning land in Phuket.

SECTION 12: Evolution of the Phuket Property Sector – Why So Many Foreigners Own Villas Illegally

Foreigners in Thailand are not allowed to own land. However, over the last few decades, it has been commonplace for foreigners to set up a Thai company, which allows them maintain control of the company which owns the physical land. This is all fine, if done correctly. It really depends on whether the Thai company is adhering to all the corporate laws of Thailand, and if everything is done correctly, such as the company having legitimate Thai Shareholders. If everything is set up correctly, it may be acceptable to the authorities. This section explains why and how so many foreigners today are blatantly violating Thai laws, and for the most part, most have no idea they are doing so.

SECTION 13: An Overview On The Thai Baht

When any foreigner invests in Phuket property, they are also exposing themselves to the Thai currency. Any fluctuations in the Thai Baht to, obviously affects their investment value, depending on how the Thai Baht strengthens and/or weakens against their home currency. They make gains if the Thai Baht strengthens, yet they make losses when the Thai Baht weakens. However, the situation is different for buyers, who may hold off on a purchase should the Thai Baht get too strong. Currency fluctuations play a major part in the Phuket real estate market dynamics.

SECTION 14: Transferring Money into Phuket

If transferring money into Phuket to purchase a Phuket property, it is important to seek legal advice. Many foreigners make the mistake of transferring money into Thailand and then later finding out they can’t purchase the condominium (or building) without sending the money back out of Thailand again and sending it back in to get the correct documentation. This happens quite frequently, because many foreigners decide to move to Phuket without understanding the laws and procedures. This is especially the case with a condo purchase, as it is important to understand how important the FETF is when registering the condo in the buyer’s name, as well as repatriating the funds back the buyers home country upon sale.

SECTION 15: Government Fees and Taxes on Property Purchases (Overview)

Government fees and taxes are low in Thailand compared to most other countries. In fact, they are some of the cheapest in the world, which is a big attraction to potential Phuket property buyers. Although taxes and fees are easy to understand, they depend on the given situation, legal structure, and whether it is a new build or a resale condominium unit or a villa. A reputable lawyer will be able to ascertain the taxes due on any property purchase.

Overview of Phuket Real Estate Market

The Real Estate market in Phuket is correctly described as being unlike any other real estate market in the world. A mere 660 metres from the Thai mainland across the Sarasin Bridge, Phuket's property market differs even

SECTION 3: What Drives Real Estate Prices in Phuket

Real estate prices for both villas and condominiums in Phuket is governed by land values, labour costs and raw material costs. All of these have risen significantly over the past few years, but land values have been the driving force in the rise of property values over the last 3-4 years. This section aims to educate buyers on what drives prices in Phuket, both historically, presently, and moving forward. With a better understanding of the Phuket property market, buyers will be able to make discerning and educated decisions, before they purchase.

SECTION 4: Guide On How to Accurately Determine Phuket Property Value

It is a known fact in the Phuket real estate industry that the true tangible price of a property is based solely on the final agreement made on price, between both the buyer and the seller. Of course, some buyers overpay for a property and have trouble selling again later. But the attraction and value of any singular property in Phuket is subjective, and beauty is in the eye of the beholder. A seller believes their property is worth a specific price, but the reality is that they will only achieve that asking price if one of the multitude of buyers agrees that the offer price is acceptable. If a property stays on the market for years, then the property is likely extremely overvalued.

SECTION 5: Rental Demand & Yields in Phuket

SECTION 5: PHUKET PROPERTY VALUE BASED ON RENTAL INCOME ALWAYS HIGH DEMAND FOR PHUKET RENTAL CONDOS AND VILLAS Although the post-Covid era has changed the Phuket real estate landscape, with a

SECTION 6: The Different Types of Phuket Property

There are many different types of Phuket property, with an array of different legal structures. This section assists to identify the different types of Phuket property for sale in Phuket. Although the various types are easy to define, sometimes these categorisations may overlap, creating even further sub-categories. If anyone is a serious buyer, it pays to understand the various types of properties that may be on offer in Phuket and to understand the legal connotations explained in later sections.

SECTION 7: The Inherent Risks to Buyers a Buyer Should be aware of: What Every Buyer of Property in Phuket Needs to Know

Foreigners who arrive in the “Land of smiles”, are mesmerised by how beautiful the Kingdom of Thailand is, and that surely in such an incredible place, full of such nice people, nothing can go wrong. Unfortunately, things often go wrong in Phuket, through either unfortunate circumstances, deliberate intentions or through the bereavement of the original lessee or land owner who made promises that the heirs refuse to accept. Buyers also need to be aware that many properties in Phuket are built illegally, and so the sale of the property at a later date, sometimes proves impossible.

Phuket Zoning Laws & Building Restrictions: A Guide to Legal Requirements

Before building or buying land in Phuket, it’s essential to understand zoning laws, height limits, floor area ratios, and environmental restrictions that may affect your project.

SECTION 8: The Importance of Sound Legal Advice for Foreigners in Phuket

Foreigners are not allowed to own landed property in Phuket. This is a truth we have to accept. A foreigner is a guest in the Kingdom of Thailand, but every foreigner can seek quality legal representation from ethical lawyers to make sure that all is done correctly, and that foreigners are adhering to either condominium laws, and/or, more importantly, land ownership laws enforced strongly by the Thai authorities. Legal advice from an experienced Thai Lawyer is essential. If any foreigners decides to purchase a property in Phuket, then they must ensure, without a shadow of a doubt, that everything is done according the laws of the kingdom.