Villas vs Condominiums
When foreigners are looking to buy property in Phuket they have the choice between a condominium and a villa. Condominiums are a type of property where a specified unit is individually owned and where the use of common facilities like swimming pools, gym, tennis court, elevators and exterior areas is shared. A villa will be larger but each individual owner will be responsible for the maintenance and upkeep.
The first thing to consider is how you intend to use the property. If it will be to use as a holiday home and you plan to spend only a few weeks a year, buying a condo might be the way to go. The maintenance will be easier as you can almost just lock and leave. The monthly costs will also be lower than for a villa. There are more advantages when buying a condo. When you wish to get an ocean view from your property, the prices for ocean view condos are more reasonable. Should you really want an ocean view villa, you better be prepared to pay top Dollars as you are then looking at the higher end of the market.
Condos are also the only option when you want to buy something freehold.
However, buying a villa also has its advantages. You will get more privacy for one thing. Only some condos have private pools where as good as all villas have a private pool or garden area. A villa development will also be less crowded.
People looking to spend more time on the island will probably go for a villa. The reason is because they like to have their private swimming pool and garden. You also get more space but you might not have the other facilities like you would have in a resort style condominium development. That being said, these days there are more and more villa developments which do offer these resort facilities.
At condominium developments, the first units that sell are always the foreign freehold ones. As they are mostly sold on a ‘first come, first served’ base, buyers who come in early get the best options. So if foreign freehold is what you want and you want to make the most capital appreciation on your investment you better be quick.
Whatever property you are buying in Phuket, be it condominium/apartment or villa, it would not be smart to do so without informing yourself about the Thai property law and foreign ownership. For many foreigners, buying a condominium is the preferred way to own property in Phuket because as long as the ratio of 49% is maintained, freehold title can be obtained.
Thai property law prohibits foreign ownership of more than 49% of the units in any condominium development. The remaining 51% of the units will typically be offered to foreigners in the form of a lease.
When a foreign national wishes to purchase a home or villa, they are only able to obtain a leasehold right on the land. They can own the structure in freehold ensuring them that to some extend that the lease will be renewed when due. However, there are some options for those wishing to purchase a villa outright.
Buying a villa or a house using a Thai limited company was very common practice until mid 2006. Since then it has become less popular although it is still being used in some cases. This is now only an option when the foreigners have legitimate Thai partners in the company. This is because every time a Thai company with foreign ownership makes a transaction at the land office, the officials will require each of the Thai shareholders to show proof of their assets.
Regardless of events elsewhere, Phuket’s property market remains buoyant and the majority of investors are seeing healthy returns. More and more developments are now getting completed and the price per square meter of condominiums continues to increase. If you are contemplating buying property in Phuket, now is as good a time as any just as long as you approach any prospective purchase with caution.
Before getting to the stage of signing the contracts there will be a lot of decisions to be made. This will range from deciding on the location of the property, to the financial structure and which type of property you will go for. It is essential that you are well informed, preferably after receiving unbiased, straight forward professional advice.