Essential Chiang Mai Real Estate Terminology for First-Time Buyers — Thai-English Glossary

Essential Chiang Mai Real Estate Terminology for First-Time Buyers — Thai-English Glossary

Real estate transactions come with extensive specialized terminology that often confuses first-time buyers. This article compiles the essential terms with clear explanations.

Documents and Title Terms

Title Deed (โฉนดที่ดิน): The highest-level land ownership document issued by the Land Department
N.S.4 Jor: The official name for the title deed
Freehold: Full ownership held permanently
Leasehold: Long-term lease up to 30 years without holding title
Sor Kor 1: A lesser land document with restricted transferability

Financial and Tax Terms

LTV (Loan to Value): Loan amount relative to property value — e.g., 80% LTV means borrowing 80% of property price
MLR/MRR interest: Reference rates banks use to set loan interest
SBT (Specific Business Tax): 3.3% tax on sales of property held under 5 years
Stamp Duty: 0.5% tax applied instead of SBT if held over 5 years
Gross Yield: Annual rental income divided by property price, before expenses
Net Yield: Rental return after deducting all expenses
Capital Gain: Profit from property value appreciation over time

Condominium Terms

Juristic Person: The organization managing a condo building
Common Area Fee: Monthly charge owners must pay
Sinking Fund: One-time payment at transfer reserved for future major repairs
Foreign Quota: The proportion of a condo project (max 49%) foreigners can own

Transaction Process Terms

Sale and Purchase Agreement: Contract made before the official transfer date
Transfer Day: The day ownership officially transfers at the Land Department
Due Diligence: Thorough verification of property and documents before purchase
FET Form: Document confirming overseas fund transfer, required for foreigners buying Freehold condos

Investment Terms

ROI (Return on Investment): Return relative to invested capital
Cash Flow: Money flowing in and out of a property investment
House Flipping: Buying, renovating, and reselling property for short-term profit
Passive Income: Income earned without significant personal effort to manage

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