A Guide to owning your piece of Paradise

A growing number of visitors never leave at all. They find themselves attracted by a hard to find combination: There's unspoiled nature, the long, empty beaches of white sand that show off a turquoise sea. But there is something else too. All the amenities offered by civilization, and then more. Increasingly famous for its spas, stylish hotels and restaurants, Koh Samui is both a tropical garden and a sophisticated destination. Koh Samui has seen many transformations; it now has a total of 5 international hospitals. In the pipeline are more developments, new private schools and the construction of a marina that will be home to the growing number of yachts that anchor here every year. A new pier is also in the making at the north of the island which will offer further births for luxury yachts.

Over the last 20 years the infrastructure on Koh Samui has improved ten fold, Koh Samui is now recognized as a fully fledged tourist destination, this tiny island has international hotels, hospitals, schools and lots of pubs & restaurants. As this paradise island grows up from being a tropical resort to a fully serviced community, it is now feasible to become a long term foreign resident.

With Koh Samui far from reaching the pinnacle of development, investment opportunities here are manifold and will offer extremely favorable returns on any outlay. It is envisaged that the economic boom will continue here on Samui for some time to come; those who purchase land and houses here today are sure to be able to resell them for substantial profits later.

Q: What Should I Look for in a Property?

A: Whether you are considering renting, leasing or purchasing property there are several infrastructure and other considerations which must be taken into account:

• Location - Roads, proximity and access to business, shops, hospitals and etc.
• Telephones - Access to direct lines and IDD facilities
• Water - Mains water and supplementary storage facilities.
• Electricity - Mains connection, and backup generators for condominium blocks
• Security - 24 hour security service, door and window locks
• Cable or Satellite TV connection/ Internet Connection
• Pest Control
• Hot water facilities - nearly all in Thailand are instant and not storage
• Air Conditioning - a necessity in Thailand
• White Goods - Refrigerators and Washing Machines
• Access roads and or an easement

Zen Properties places the utmost importance on surrounding ourselves with professional and honest experts to ensure our clients are satisfied in every aspect from the starting point to the completion of their Luxury Dream Villa. To outline our services, we begin by finding suitable land to match the desires and needs of our clients, we then survey the land and check the due diligence on the property. Once all the paperwork is finalized and correct, we guide you through the design and construction aspect of building and put into place all the necessary final touches our clients deserve.

Due Diligence: (Linked to Property related services)

Due diligence is a recommended precursor to the acquisition of land in Thailand. The actual focus and steps of due diligence involved will greatly depend upon the facts surrounding the nature, location, and intended use of the land. Furthermore, the results and findings of first step due diligence will often determine what additional due diligence is required. Nonetheless, certain steps in the due diligence process have become common practice and are recommended prior to purchasing land in Thailand.

A. Legal Descriptions of the Property:

The legal description and details of the land as recorded with the land Department (size, location etc.) should be verified during the due diligence process.

B. Register of Records:

The Register of Records on the reverse side of the title document to the property should be reviewed. We note most official encumbrances will be registered on the title of the property including mortgages, leases, redemption rights, etc.

C. History of Land Title

The source of the title being conveyed should be examined at the Land Department. Many title documents begin a land claim documents ( ex: Sor Kor 1, Tor Bor Tor 6, and the Tor Bor Tor 5.) which are essentially forms of squatter or settler claims filed with the district office. These land claims were eventually upgraded to a form of title that can bought, sold and mortgaged ( ex: Nor Sor 3 and Nor Sor 3 Gor. ) Because of the nature of these titles, they should be reviewed to ensure location, dimensions, and size corresponds to the title being conveyed. The examination of the title upgrades has become one of the most important components of due diligence.

D. Pending Legal Action:

A review of the record at the Land Department regarding any pending or potential legal actions involving the property should be conducted.

E. Rights of Adjacent Property Owners:

An attempt should be made to verify whether any rights have been given to adjacent property owners with respect to road access to the property.

F. Beach Access:

Should the purchase of land be made in consideration of the location of the land to the beach the due diligence process should consider the registration of easements, servitudes or other public access points to a beach. If the property is set off the beach, the due diligence process should identify the closest access point.

G. Zoning Restrictions:

The zoning map for the area where the property is located should be reviewed both to ensure that there are no restrictions that would prevent you from using the property for the desired purpose. And, just as important, the map should be checked to ensure that areas surrounding the property are zoned to restrict the use of such property in a manner that would affect your enjoyment of the property.

H. Building Restrictions:

The Ministerial Regulations of the Building Control Act B.E. 2522 governing the construction of buildings in the area where the property is located should be reviewed considered with respect to the relevant property. The Ministerial Regulations will set forth restrictions related to the size of the building located on the property, the distance that are required to be from the beach, and the height. These restrictions should be considered in view of your plans.

I. Infrastructure Projects:

The master plan at the local government office should be examine to ensure that there are no approved plans to construct roads, piers or other infrastructure on or near the target property that may not be reflected in the title documentation.

J. Physical Inspection/Walkthrough:

The due diligence process should include a physical inspection of the property. The condition of access roads, location of utilities and sewage systems if any, should also be identified.

K. Governmental Approvals:

Due diligence should be carried out in view of the goals of the buyer, with respect to use of the property as certain projects may require government approval(s) prior to conducting due diligence, your legal representative should be briefed on your basic construction plans.

Land Title Deeds

A Title Deed is the purest form of evidence that an individual owns a piece of land. Title Deeds are given only for areas of Thailand which are surveyed. For areas which are not surveyed, there are other documents for land possession such as evidence of the possession of the right to utilize the land or other interests in the land. These documents are called "Nor Sor Sam (3) and Nor Sor Sam (3) Kor". Unlike the Title Deeds, these Nor Sor documents are issued to show the possessors' exploitation of the land. Though these documents do not provide ownership rights, as do Title deeds, they can still be registered for transfer of the lands for which they are issued.

Land title deeds are called Nor Sor 4 Jor or you may here the word Chanote, these are issued by the Surat Thani Provincial Land Office.

When looking around expect to find many land documents in the form of Nor Sor 3 or Nor Sor 3 Gor these are certificates of land utilization.

All of these are equivalent to land title deeds because in effect they allow the land to be sold, leased or even mortgaged in the same way as land held under a Chanote Title.

A Nor Sor 3 certificate is less accurately surveyed than a Chanote.

The newer Nor Sor 3 Gor is a much more accurately surveyed plot as it is crossed referenced to a master survey of the area and referenced to a corresponding aerial photograph.

We recommend that any foreigner seriously wanting to purchase land should only consider land that is held under a Chanote or Nor Sor 3 Gor. Remember the golden rule, if in doubt, please consult a professional.

Here is a broad guide to the various Land Title Deeds and what they signify:

Sor Kor 1 is a notification form of possessed land. This document entitles the holder to occupy and farm the land. Sor Kor 1 land may not be sold - it may only be passed on by inheritance and its use is subject to the same restrictions as Tor Bot Tor land. Depending on the land's location, this document may be upgraded to Nor Sor 3 or Chanote. No Sor Kor 1 has been issued since 1972.

Tor. Bor. Tor 5 and 6 is evidence that the occupier of a piece of land has been issued a tax number and has paid tax for using the benefit of the land. This confers no rights at all but was formerly used to establish that the holder was occupying a piece of land and could apply for a Sor Kor 1. The land must be used for agriculture, but a single house for the farmer may be built on it.

Sor. Por. Gor 4-01 is an allotment of land from the land reformative committee, and under no circumstances may this land be bought or sold. It confers the right to occupy only and can be transferred only by inheritance. It seems that the land may be used for agriculture only.

Nor. Sor. 3 is an instrument which signifies the land occupier's right to possess the land, but without conferring actual possession. The borders of the land must be confirmed by neighbors and by a ground survey before the document is issued. There are no "parcel points" i.e. numbered concrete posts which are hammered in to mark the boundaries of the land. This may cause problems in verifying the land area. There are no limits to what use the land may be put (provided the use does not contravene height restrictions, environmental protection laws, etc.) The land may be sold, subject to a 30-day notice period.

Nor. Sor. 3 Gor is an instrument with the same legal basis as Nor. Sor. 3. The difference being that Nor. Sor. 3 Gor has the land area and parcel points set by using an aerial survey. There is no need to publicize any legal acts, and it is possible to partition (divide) the land into smaller plots.

Chanote - Nor. Sor. 4 Jor is the only document which can be described a land title deed, because it alone confirms ownership of land. The land is accurately surveyed and its area and boundaries are set using GPS. There is no need to publicize any legal acts, and it is possible to partition (divide) the land into smaller plots.

Frequently Asked Questions:

Q: Are There Property Taxes in Thailand?

A: There are no property taxes as such in Thailand that are exactly equivalent to the property taxes in the west, however, the most comparable taxes on properties in Thailand are the Land Tax and the Structures Usage Tax. The Land Tax levied on land is so miniscule, that in practice the body charged to collect it, rarely bothers to do so, and if they do, they usually wait several years until the amount accumulates. The second tax, the Structures Usage Tax, relates to buildings, is collected by the municipal office or district office, and is only applied to properties used for commercial purpose.

Q: What Taxes and Costs are Applicable to Purchasing a Property?

A: On all purchase/sale of property in Thailand there is a stamp Duty of 0.5%, a transfer fee of 0.01%, a business tax of 0.11% levied against an owner who has been in registered possession of the property less than 5 years, and Income Tax. There is no Capital Gains Tax in Thailand, unlike many countries, and Income Tax (usually between 1.0 - 3.0%) on property is the comparable replacement. There are no set rules on who pays the income tax, and it is just another part of the bargaining process, as with all the other costs of the transfer of ownership.

Q: Can I Get a Mortgage Loan?

A: Yes, it is now possible for foreign non-resident buyers to obtain mortgages when purchasing a freehold propety in Thailand. Zen Properties being familiar with the process are happy to assist buyers through the application process. For more details on mortgages please go to our Legal page.

Q: Land Appraisals and Valuations

A: Finding the exact appraisal price for land is difficult, since there are generally three different appraisal rates; the government rate, the appraisal company's rate and the rate which is considered to be fair market value of the land. Over the last few years all of these rates have begun to come closer together. With the Zen team's wealth of experience in Thailand, they are well placed to assist you in valuing various properties proposals.

Q: My Wife is a Thai National, Can She Own Land?

A: Prior to 1998, any Thai woman who married a foreigner would lose her right to purchase land in Thailand. She could, however, still retain land that she owned prior to marrying the foreigner. However, the recent (1999) Ministerial regulation now allows Thai national's married to foreigners the right to purchase land, but the Thai spouse must prove that the money used in the purchase of freehold land is legally solely theirs with no foreign claim to it. This is usually achieved by the foreign spouse signing a declaration stating that the funds used for the purchase of property belonged to the Thai spouse prior to the marriage and are beyond his claim.