Condos in Phuket have become an increasingly popular choice for foreign investors. Buying a condominium can be one of the simplest ways for a foreigner to own property in Phuket. Compared with buying a villa, the legal ownership structure is more straightforward, and foreign buyers can own a condo unit freehold in their own name. If the idea of buying a condo in Phuket sounds attractive to you, you’re in luck as there are dozens of new projects recently completed or under construction all over Phuket. However, before signing that contract, it’s important to understand the process of buying and owning a condo in Phuket.

Who Can Own What?

The first thing anyone interested in owning a condo needs to understand is that even though foreigners can legally own a condo, there are certain restrictions. Under Thailand's Condominium Act, no more than 49% of the total floor area of a condominium building can be foreign-owned. This applies to the building itself rather than the entire development. You may assume that this foreign ownership restriction would prevent an owner from selling you the condo should it exceed the limit, but this may not be the case. Before paying a deposit, inquire with the condo's juristic office to confirm that the unit is eligible for foreign freehold ownership.

Freehold vs Leasehold

The majority of foreign buyers would prefer freehold ownership as it is the most attractive option in most cases. Freehold simply means you are the legal rightful owner and your name is on the title deed. Leasehold situations are more common for houses or villas since foreigners cannot own land. A leasehold contract can be up to 30 years and may be for land, a house, or both. A common scenario is where a foreigner leases land to build a house. For condos, if it is being offered as leasehold, it’s likely because the foreign freehold quota has been reached.

Due Diligence

Whether you're buying from a developer or an existing owner, independent due diligence is essential. A local lawyer should carefully review the sale agreement, confirm the seller's ownership, check the title documentation, and reveal any registered encumbrances.

If you’re buying a resale condo (as opposed to a brand new project), it is also important

to look into the building's financial position. Ensure your lawyer uncovers any outstanding common-area fees, planned major repairs, sinking-fund contributions and the overall condition of the development.

Additional Costs

Be aware that purchasing a condo will cost more than the advertised purchase price. Thailand imposes several taxes and fees when transferring ownership. The typical transfer fee is 2% of the property's assessed value, with other costs including specific business tax, stamp duty, and withholding tax, depending on the circumstances of the transaction. Hiring a property lawyer to carry out the due diligence and assist with the purchase will also be an additional cost. The buyer and seller often negotiate how these costs are divided, so be sure to clarify this before signing the purchase agreement.

As is the case with just about every condo project, you will be responsible for contributing to common-area fees and the sinking fund. These ongoing costs may be collected monthly or yearly and can vary considerably between developments.