Thailand’s return to democracy after a 15 month military rule has already had a positive impact on the property market. There have been a notable number of deals completing during high season in Phuket as well as more visitors to the sole agency projects. The newly elected government has begun to take initiatives toward a more open and favorable policy for foreign property investors. It has already taken away the 30% capital control which is thought to support bringing back foreign investments.

Property financing for foreigners in Thailand is available now. When we buy a property back home, one of the first things coming to our mind is financing. Even for those who have enough funding and liquidity for owning a property, financing is often perceived as a way of leveraging investments. For buyers with less access to funding, financing is an unavoidable vehicle they utilize to own that dream home. Considering this, Thailand is the same as any other countries.

Most of the financial institutions in Thailand offer loans for property purchases to Thai citizens and companies centered on similar criteria we are familiar with in our home countries. However, the similarities do not extend from there for most foreigners buying property in Thailand.

The issuing of the new tax incentive package is also an attractive move for the market interested in property purchases. This is anticipated to fuel market sentiments on both the demand and supply sides. Property Transfer fee will be decreased from 2% to 0.01% and Specific Business Tax for property transactions will be decreased from 3% to 0.1%.

Reliability in the market could be improved further by longer lease terms, stretching from the current 30 years to 90 years. The beginning of business lending to foreign property investors should also be considered by the government. Policies like these would enable Thailand to keep pace with its emerging neighbors, Vietnam and Malaysia, relating to property purchase terms. So, more encouraging outlook is expected for the Thai property market in 2008 than in 2007.

Since the December election, foreign investors have shown increased interest in property purchases. Established developments have witnessed a particularly alive high season. Newly awarded projects have also met with a positive response by foreigners in Thailand.

A similar trend is witnessed in Samui with a clear rise in visiting and purchases of resort properties. With surge in flight schedules, further demand will be anticipated in Samui. The Samui market for luxury villas is closing on Phuket, with the establishment of international hotel brands wooing quality tourism. Samui used to be a less favored beach destination, but this is not at all the case now as it is emerging rapidly as a beach destination. Lots of high net worth investors are now increasingly keen.

The Treasury Department’s recent land value appraisal displayed that land values in Phuket have rose by an average 160 per cent over the past four years, with Samui prices following closely. The steady rise in land prices on Thailand’s coast points to the confidence in the market and its long term prospects. If you are ready to forget the unfriendly past of Thailand and show renewed faith you are set to benefit.

On going, an investor may require paying income tax on an income he attains from his investment property in Thailand but may be quite happy to realize that there is presently no capital gains tax in Thailand. There is also a Land Tax and Structures Usage tax that an overseas investor may have to pay on their property assets but both are very much affordable. Wise foreigners in Thailand always go for the right choice in property purchases and this is definitely one among them.

Considering buying a home in Thailand? The two most popular areas in Thailand for expatriates are probably the Bangkok area, where expatriates living in Thailand for the purpose of business or life experience will probably find themselves, and Phuket, where expatriates and adventure seekers may retire to enjoy the incredible beaches and laid-back lifestyle. Here’s a look at homes in the Bangkok and Phuket area.

Homes in Bangkok

For expatriates who need to live in Bangkok for the purposes of doing business with their multinational corporation, in-city living means living in a luxury condominium or high-rise apartment – the closer to the city centre, the higher the price. For those who do not want to live in an apartment or condominium, careful searching in Bangkok’s city centre will reveal a few single-family homes and town houses, but these are few and far between.

For rental properties in Bangkok, options are limited to:

- Condominiums: There are many condos available in Bangkok. Unlike the serviced apartments (see below), there are more native Thais living in Bangkok’s condos, meaning that there is also less turn-over and more of a “neighbourhood” feeling.

- Serviced apartments: These have a high proportion of expatriates, so the foreigner may feel more in his or her element in an apartment like this. However, the serviced apartments are more expensive than regular condos, and can sometimes feel more like a hotel than a home.

- Houses and Townhouses: Unless willing to pay a much higher price, stay away from houses and townhouses in the Bangkok business district. Houses and townhouses are far more affordable in Bangkok’s suburbs. Just as in the west, houses and townhouses provide much more space, but they are usually more expensive. Bangkok’s suburbs are best for families living in Thailand, with ample room for children to play safely, ride bikes, and so forth. The drawback to living in the suburbs is the extended commute time for those working in the city, as well as the inaccessibility to public transportation.

Homes in Phuket

Homes in Phuket are in general a very affordable to most people coming from Europe and the USA.

Like the Bangkok area, Phuket has a wide variety of home types for sale. From townhouses to upscale apartments, Phuket’s homes seem designed to appeal to western notions of luxury.

- North Phuket, where the airport is located, has a higher number of apartments, resorts, and luxury condominiums.

- East Phuket has more 2, 3, and 4 bedroom Thai luxury villas, perfect for an entire family relocating to Phuket.

- Phuket town and the Kathu area, located near the middle of the island on the southeastern side, has quite a vast array of home types, including single family homes closer to town.

- South Phuket is less developed, with more opportunities to purchase land and build one’s own dream home.

- Like North Phuket, the West Coast properties also tend to be oriented towards apartments and condominiums.