Chiang Mai Real Estate Glossary — Essential Terms Every First-Time Buyer Must Know

Chiang Mai Real Estate Glossary — Essential Terms Every First-Time Buyer Must Know

First-time property buyers frequently encounter unfamiliar terminology. This article compiles every important term you need to know.

Documents and Rights

Chanote (NS4 Jor): The highest-grade Thai land title deed — full ownership rights with accurately surveyed boundaries
NS3 Kor: Second-level title deed — buyable and mortgageable but requires 30-day public notice
SPKOR 4-01: Government-distributed agricultural land — illegal to buy or sell
FET Form: Thai bank document confirming overseas fund transfer — essential for foreigners buying freehold condos
OrChor 2: Condominium unit ownership certificate — equivalent to a Chanote for condos

Financial and Investment Terms

Gross Yield: Total return before expenses — Formula: (Annual rent / Purchase price) x 100
Net Yield: Return after all expenses deducted
Cap Rate: Property return rate excluding borrowing — used to compare different properties
RevPAR: Revenue Per Available Room — used in hotel investment
Occupancy Rate: Percentage of units currently rented
Capital Gain: Profit from property value appreciation
LTV (Loan to Value): Loan amount as a percentage of property value
Equity: Property value minus remaining loan balance

Transaction Terms

SPA (Sale and Purchase Agreement): The main contract specifying purchase conditions, price, and transfer date
Deposit: Buyer's payment confirming purchase intention — typically 10% of price
Specific Business Tax (SBT): 3.3% on properties held under 5 years
Stamp Duty: 0.5% on properties held over 5 years (replaces SBT)
Transfer Fee: 2% of appraised value — typically split between buyer and seller
Appraised Value: Treasury Department-set value used as tax and fee calculation base
Due Diligence: Thorough property verification process before purchase

Ownership Rights

Freehold: Complete, permanent ownership rights
Leasehold: Long-term lease (typically 30 years) without full ownership
Foreign Quota: Maximum 49% of condo units that foreigners can hold

Property Management Terms

Common Area Fee: Monthly payment by condo unit owners to the juristic committee
Sinking Fund: Reserve fund for major future structural repairs — paid once at transfer
Juristic Person: The organization managing a condo project and common areas
POA (Power of Attorney): Document authorizing another person to act on your behalf

Chiang Mai-Specific Terms

High Season: Most active property market period (November-January)
Low Season: Quiet market period — best opportunity to buy at good prices (July-September)
PM2.5: Fine particulate matter — Chiang Mai's haze season issue affecting property selection
NPA: Non-Performing Asset — bank-repossessed property, typically priced below market

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