The Two Faces of Thailand’s House Current market

Potential investors who are currently considering an overseas property purchase in Asia, will probably have Thailand on their short-list at the outset, but upon looking into it will find that property investment in Thailand is currently a two sided coin:

On the one hand Bangkok has recently been listed among the top twenty tourism destinations in the world, which should make a property investment there a good one. Dig a little deeper however and you find that capital appreciation, — previously strong in Thailand — along with all factors to be considered before investing, have been detrimentally affected by the recent political turmoil, namely the September 2006 coup.

Never the less Thailand is still among the best Asian countries for foreigners to invest in, there is no inheritance tax or gift tax, capital gains tax is charged like income tax at the standard rate, and foreigners can own condominiums freehold. There are other ways for foreigners to buy in Thailand but a condominium purchase is the easiest. And even with the political turmoil as it is rental yields are still around the 8% mark in top tourist destination, Bangkok.

Another rising star in Asia’s tourism industry is the Thai island of Koh Samui,which has been largely unaffected by turmoil on the mainland, and  泰國樓盤 where potential investors will find mostly resort property.

As tourism expands on the island, and it begins to attract more of the high end market, as oppose to primarily back-packers, these resort villa properties can fetch yields of 10-12% quite easily, and capital appreciation is conservatively estimated at around the 15%-20% mark.

Total transaction costs are a moderate 10% – 12.3% in Thailand, but there is a little complication over the computation of buying costs; specific business tax and stamp duty are paid on whatever is higher, declared or assessed value — both parties must have their own solicitor.

Overall a Thailand property investment can be a very rewarding endeavour, especially if you are purchasing a holiday home with a view to renting it out when not in use.