Phuket Property Purchase Guidelines

Most properties in Phuket are sold either off-plan or partially built. Property investors should carefully review the payment terms. Buyers must pay a reservation fee, which secures the property and takes it off the market. There is usually a period of about 30 days for legal work to be completed before the first payment is due when signing the contract. 

After the first payment, the remaining payments are made according to construction milestones.

What is Phuket Property Purchase?

Buying property in Phuket involves purchasing a home or land in this popular island destination in Thailand. Many properties are sold off-plan (before they are built) or in a partially built state. Foreigners can buy condominiums directly, but buying land requires using a leasehold arrangement or setting up a Thai company. 

The process includes paying a reservation fee, completing legal work, and making payments according to construction progress. Property management fees may apply for the upkeep of common areas in villa or condo developments.

Investing in Phuket

Most people first come to Phuket as tourists, enjoying its beautiful white sandy beaches, friendly hospitality, tropical climate, great value, stunning diving spots, and top-notch golf courses. Many then decide to invest in property and buy a second home or a retirement home.

With many villas for sale, Phuket now has over 3,000 villa owners. Over the past ten years, buying property in Phuket has been a good lifestyle investment with the potential for value increase. Investing in Phuket has seen an average value increase of 20% to 50% per year for prime beachfront or sea-view properties. Some properties have even doubled in value from the start to the completion of construction.

Lifestyle, Leisure, and Infrastructure

Phuket has over 150 hotels and resorts and many sports and leisure facilities. The island features six golf courses, including Blue Canyon Country Club, Laguna Phuket Golf Course, Mission Hills Phuket Golf Course, and four marinas with a total of 655 berths. As Phuket’s tourism and property markets have grown, there are more high-end dining and entertainment options.

The island’s infrastructure is well-developed with an international airport, six major hospitals, and three international schools. This development has supported the growth of Phuket’s real estate market.

Weather

Phuket has a warm tropical climate with temperatures ranging from 25 to 35 degrees Celsius all year round. The best weather is during the European winter. Phuket has two seasons: dry and green. The dry season is from November to January, with the hottest months being March and April. The green season, from late April to November, has the most rainfall.

Payment Stages for Villa Construction

• 20% at agreement signing
• 20% when villa footings or pilings are completed
• 20% when columns, floor slabs, and roof frames are completed
• 20% when the villa shell, including external doors and windows, is completed
• 20% at substantial completion of the villa

In Thailand, foreigners buying real estate must transfer funds from abroad.

Sinking Fund

When buying a new villa or condo, each owner pays an initial amount into a sinking fund. This fund is for major future repairs and renovations, such as repainting external walls or replacing a pool pump.

Common Area Management Costs

In-villa or condo developments, property managers, such as CBRE, manage the common areas. Their responsibilities typically include:

• 24-hour onsite security
• Maintenance and watering of common area landscaping
• Cleaning common areas like stairways, paths, and the management office
• Cleaning the communal swimming pool and maintaining chemical levels
• Managing the office, estate manager, technician, and related costs
• Insuring common areas, including the structure of each apartment block
• Providing electricity and water to common areas
• Refuse collection
• Pest control in common areas
• Accounting and annual auditing

The property management company like ourvillas reports monthly to the owner’s committee, providing financial statements and updates on common area management. This system ensures transparency and effective management, protecting and enhancing the value of each owner’s investment.

Purchase Options for Phuket Villas for Sale

Resale Phuket Villas

Resale villas are properties previously owned by individuals, not sold directly by the original developer. These can be under construction (off-plan) or already completed. While resale villas in Phuket have been limited due to long-term investors, the market is growing and maturing.

Completed Phuket Villas

Completed villas are fully constructed and available for viewing. Buying a completed villa has no development risk since you can see the actual finishing and design quality before purchasing.

Off-plan Phuket Villas

Off-plan villas are sold while still in planning or construction. It’s important to buy from a reputable developer to minimise risks. Quality developments usually offer show units for viewing. Off-plan villas are often sold at a discount and may appreciate in value upon completion.

Investment Villas

Investment villas are part of developments marketed as investment properties. These have usage restrictions for owners and are included in rental programs. The guaranteed returns for investment villas in Phuket range from 5% to 8% for one to six years, with owners typically allowed 45 to 60 days of use per year, depending on the project.

A Guide to Buying Property in Phuket

Buying property in Phuket offers many options, including resale, completed, off-plan, and investment villas. Each type has its own benefits and considerations. By understanding these options and working with reputable developers, buyers can find a property that fits their needs and investment goals. Whether you are looking for a holiday home, a long-term residence, or an investment opportunity, Phuket has something to offer.

Frequently Asked Questions