PATTAYA PROPERTY AND THAILAND S REAL ESTATE

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2 PATTAYA PROPERTY AND THAILAND S REAL ESTATE How to Buy Thai Condominiums, Apartments, Homes & Villas Nick Pendrell

3 Pattaya Property and Thailand s Real Estate First edition published in 2012 Copyright 2012 Nick Pendrell The rights of Nick Pendrell to be identified as the author of this work have been asserted by him in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act All rights reserved. No reproduction, copy or transmission of this publication may be made without express prior written permission. No paragraph of this publication may be reproduced, copied or transmitted except with express prior written permission or in accordance with the provisions of the Copyright Act 1956 (as amended). Any person who commits any unauthorised act in relation to this publication may be liable to criminal prosecution and civil claims for damage. Condition of Sale Except in the United States of America, this book is sold subject to the condition that it shall not, by way of trade or otherwise, be lent, re-sold, hired out or otherwise circulated in any form of binding or cover other than that in which it is published and without a similar condition including this condition being imposed on the subsequent publisher. ISBN-13: ISBN-10: Thailand Edition printed by booksmango 2

4 by Nick Pendrell Disclaimer Neither the author nor the publisher assume any responsibility for any errors or omissions, nor do they represent or warrant that the information, ideas, plans, actions, suggestions and methods of operation contained herein is in all cases true, accurate, appropriate or legal. It is the reader s responsibility to consult with his or her advisor before putting any of the enclosed information, ideas or practices into play. The author and the publisher specifically disclaim any liability resulting from the use or application of the information contained in this book and the information is not intended to serve as legal advice related to individual situations. All trademarks, brand names and products are property of their respective companies. Acknowledgements I would like to thank the following for their assistance in the writing of this book firstly Jason Harrison of GDI Overseas for his constant support and assistance, without which, this book would have never seen the light of day. I would also like to thank Chalermwat (Pico) Wimuktayon and Peter McCarthy of Magna Carta Law Firm for helping guide me through the complexities of Thai real estate law. Many thanks also to the developers of all the projects featured in this book for patiently providing answers to the barrage of questions that I subjected them to. And, finally, thank you to Tony Doyle and his staff at the Drunken Duck, for supplying me with a constant supply of caffeinated beverages and allowing me to commandeer the corner of his bar which served as my office during the writing of this book. 3

5 Pattaya Property and Thailand s Real Estate Contents Disclaimer... 3 Acknowledgements... 3 Contents Introduction An Introduction to Pattaya Legalities of Property Ownership Researching the Market Getting to Pattaya Visas Opening a Bank Account The Viewing Trip The Buying Process Finalise the Deal Buying in Single or Joint Names Reservation Forms and Reservation Fees Contracts The Handover Registering the Property Fees and Taxes Purchasing Taxes Annual Taxes Sales Taxes Wills & Heirs Living in Pattaya Renting Out Your Condo Overview North Pattaya (Naklua & Wongamat) The Sanctuary Modus Club Royal The Serenity The Palm Wong Amat Tower AD Wongamat Central Pattaya City Garden Apus City Center Residence Waterfront

6 by Nick Pendrell 16. Pratumnak Hill Cosy Beach View The Peak Towers Amari Residences The Vision Park Royal Park Royal Laguna Bay Laguna Bay Art on the Hill Water Park C-View Jomtien Cetus Acqua Dusit Grand Condo AD The Grand Jomtien Atlantis Amazon Laguna Beach Resort Laguna Beach Resort Laguna Beach Resort 3 The Maldives Zen in the Park Grande Caribbean Condo Resort Na Jomtien Centara Grand Residence Nam Talay Beach Front Jomtien Water s Edge Bang Saray Bang Saray Beach Condos CW Ocean View Bang Saray Beach Villas (Talay Sawan) East Pattaya Patta Village Baan Dusit Villas Siam Royal View Conclusions A Final Reminder Appendix 1 - Final Cost Calculator About the Author

7 Pattaya Property and Thailand s Real Estate 1. Introduction Welcome to Thailand the Land of Smiles! It s hard to find anywhere else in the world that offers quite as much as Thailand does. If you re looking for Paradise on Earth, then Thailand is probably the closest that you are ever going to get to it. With its warm, tropical climate; friendly and welcoming people; lush and exotic vegetation; crystal blue waters; golden sandy beaches; delicious national cuisine; a vast array of entertainment options catering for all tastes and all at highly affordable prices - it s hardly surprising that Thailand has become one of the world s most popular holiday destinations, attracting just under 20 million visitors in 2011 alone. Apart from the capital, Bangkok, the world s favourite location in Thailand is Pattaya, a beachfront resort city on the Gulf of Thailand which has quickly become one of the world s leading playgrounds. Pattaya is expecting a record 8 million visitors in No matter what you might be looking for from an ideal holiday destination, Pattaya has got the lot, whether it s relaxing on sandy beaches, swimming in the sea or sampling its legendary nightlife. With all this to offer, it s hardly surprising that so many people return to Pattaya over and over again. And many of those returning visitors are interested in putting down some more permanent roots in the city, whether as a holiday home from home, which provides a warm bolthole to use for escaping the winter blues, or as a permanent residence. Now that Thailand is offering special retirement visas for anyone over 50, increasing numbers of people are selling up in their home countries and moving to Pattaya. Here cold winters and an exorbitant cost of living will quickly become nothing more than unhappy memories and they can enjoy a fabulous standard of living from 1,300/$2,100 per month. Many of those looking to visit Pattaya on a regular basis or move here permanently are interested in buying a property. The attractions are fairly obvious no more rent to pay and the opportunity of making it your own personal space with your own personal style. And then there s the impressive investment potential of buying real estate in Pattaya to consider as well. 6

8 by Nick Pendrell In the past, one of the great barriers to buying property in Pattaya or anywhere else in Thailand was the fact that it was not possible for foreigners to own residential real estate on a freehold basis in their own names. Up until a few years ago, the only available options used to be either to lease a property for a maximum period of 30 years, or to form a Thai company, with Thai nationals owning a minimum of 51% the shares. Neither of these options was terribly appealing to a majority of buyers, who were not used to such restrictions in most other parts of the world. All this changed in 2008, however, when the Thai Government passed the fourth amendment to the Condominium Act. Since then, it has been possible for foreigners to buy a property on a freehold basis in their own names, removing the major negative factor regarding the purchase of Thai real estate. Unfortunately for the Thai Government, 2008 was a very dark year in the world of international real estate, because it saw the world nose-diving into recession. As a result, the passing of this new law did not have too much of an impact during 2009 and By 2011 though, many parts of the world have bounced back from recession and the property market in Pattaya and elsewhere in Thailand is starting to boom like it has never boomed before. So what does all this mean for those who are considering whether or not to purchase real estate in Pattaya at the moment? What this means is that now is an excellent time to buy a condominium in Pattaya. Although prices have been rising steadily since 2008, real estate is still surprisingly affordable here, with units in prime locations starting from just THB 850,000 ( 17,000/$27,500), - still less than the price of a half-decent new car. For the real estate market in general though, it s still pretty early days there is a huge amount of growth left in the market, so don t think that you ve missed the boat if you are looking to buy property primarily for its investment potential. Prices still have a long, long way to go before they peak, because many potential buyers are still reeling from drops in prices in previously over-inflated markets such as those in Spain and Florida. As a result, many people are being overly cautious about returning to the international property market. While others are waiting though, you can be profiting. Real estate is a commodity like any other, whether it be gold, stocks, currencies, pork bellies or anything else prices are determined by the laws of supply and demand. Bubbles occur when people forget this and they let greed take over. Dubai was a perfect example of this. A very high percentage of buyers there weren t buying apartments to use the properties themselves, they were buying as 7

9 Pattaya Property and Thailand s Real Estate speculators buying in the hope that they could resell the property to another speculator further down the line at a higher price. Unfortunately in the case of Dubai, when times got tough in 2008, the whole market came crashing down like a pack of cards. This is because there was not the demand from regular end users people that just are buying simply because they need a roof over their heads to keep prices stable or to continue heading upwards. Conversely, however, house prices across much of Northern Europe were fairly unaffected by the recession, because far fewer properties were acquired there on a speculative basis. Demand still outstrips supply across much of Europe, so prices remained high throughout the period. Bearing the above in mind, what is the potential for real estate in Thailand and Pattaya in particular? It all means that the potential is very good, because demand for condominiums in Pattaya is growing consistently. In addition to those looking for affordable holiday homes abroad, the number of people deciding to retire in Thailand is increasing constantly, and they all need somewhere to live. Another advantage which Thailand has over most other countries in the world is the very cosmopolitan nature of its visitors. Spain suffered a major downturn in prices due to the fact that nearly all of the buyers of Spanish property came from Northern Europe. Florida s downturn came from the fact that most buyers were American and the EU and the US were the two economies most greatly affected by the recession. This is not the case with Thailand, however. The largest percentage of visitors to Thailand come from China and other parts of South East Asia the part of the world which saw the least impact from the recession. For Pattaya in particular, the biggest groups of foreign visitors, by quite a wide margin, come from China and Russia. The incredible rise in the fortunes of China over the past two decades has been well-documented. The tremendous influx of wealth into China has seen property prices there spiralling upwards at a fast pace over the past few years and has reached a point where many analysts believe prices there are now overinflated. In spring 2012, prices in some of China s key cities saw some drops for the first time and so it looks as if the Chinese property bubble is now starting to slowly deflate. This means that canny Chinese investors are now starting to look outside the country for property purchases and Thailand, just a short flight away, makes an ideal holiday destination for them, in the same way that Spain is attractive for Northern Europeans. 8

10 by Nick Pendrell Russia was also not greatly affected by the recession and overseas property ownership is still a fairly new concept for the majority of Russians, so few of them were burned by buying in the wrong places pre As a result of this, plus the fact that visa requirements for Russians are quite relaxed compared to most other parts of the world, Russians appetite for buying overseas property is growing rapidly all the time and they are currently gobbling up condos in Pattaya like there s no tomorrow. In addition to the supply and demand factors that make Pattaya a very attractive place for purchasing property, there s also the old real estate cliché of location, location, location to consider. Think of the entire landmass of the Earth. How much of that area is within 500m of the sea? And how much of that is located in a region which has warm temperatures throughout the year? I can t give you an exact figure, but I do know that the percentage starts with 0.0 and then there are a lot more zeroes before you get to the percentage sign! But what difference does this make? It s back to supply and demand again. Who wouldn t love to live right on the beach if they could possibly afford it? Failing that, who wouldn t want to live just ten minutes walk away from it? Of course everyone would love to if only they could afford it. But beachfront is a very limited resource and no one can build any more of it (with the possible exception of The Palm and other similar projects in Dubai, which may or may not still be standing a decade from now, depending upon whose opinion you listen to!). Because the property boom in Pattaya is still a fairly recent phenomenon, there are still some prime building plots in the city which are just now in the process of being developed, although they are already getting few and far between in Central Pattaya. Once the plots have been built on and the condos sold, then they are off the primary market and developers will need to start building either further up or down the coast, making it a long journey to get to Pattaya s current downtown area, or else they will need to build further inland, making it a longer journey for those who want to get to the beach. The bottom line? Those buyers who were lucky or clever enough to purchase a condo in a prime location either right on, or close to, the beach and near the city centre are going to be able to resell their property for much more than they paid for it once there are no more new developments in such good locations on the primary market. And, while they are waiting for resale prices to rise, they can achieve some excellent rental income from people who want to live there for a more limited period. It s a win-win situation for anyone who doesn t leave it too long to get into Pattaya s property market. 9