Tips for building villas in Samui

Lots of dream homes going up in Samui

Lots of dream homes going up in Samui

There is plenty of building going on in Samui, as the island becomes increasingly popular not only with tourists but resident expats. Some build their own villas, but mostly the industry is dominated by developers building villa complexes and selling them. Unless you have experience with the local property market, building practices, contractors, and the legal issues, it’s easier and safer to work with a developer who might offer you customised design and construction when building on Samui.

The foremost consideration when building villas on Samui is the land ownership issue. Since non-Thais are unable to own land, proxy ownership structures are necessary to secure the right to build a villa safely, usually through a 30 year renewable leasehold arrangement. With this secured, you then face the challenges of working with Thai builders, sourcing materials and maintaining quality. While some individuals who are familiar with Thailand choose to build independently, most investors will work through the developer who has the infrastructure to provide a hassle- and risk-free outcome.

Building villas in Samui is rewarding and provides excellent value for money, in terms of lifestyle. With constant demand, the prospect of your finished property increasing in value is good. Cheap labour and materials, a mature industry with cutting edge tropical design, excellent locations, and a wide range of locally available furnishings and fittings can add up to a satisfying result. For this reason there are plenty of projects under development in Samui, and to browse among agents allows for a good understanding of available land and construction companies.

Here are the main tips to consider when building villas on Samui:

1. Land in and near to the popular tourist centres of Chaweng and Lamai is usually so expensive as to be out of reach. Be wary of affordable options claiming close proximity to dense tourist locations as they are often farther than assumed and in noisy, congested, unfavourable areas.

2. Luxury residences are the most popular type of development project on Koh Samui, with the majority of completed villas priced under 35 million baht (US$1.15 million) and plots of land available to be developed often in excess of 65 million baht (US$2.3 million). Market projections suggest growth even in the face of economic recession with construction costs varying but ranging from 15,000 baht (US$500) per square metre.

3. At present, the only way to legally own a luxury villa residence is through a long-term freehold lease agreement with an individual land owner, a Thai limited company, or a Thai bank. Lease terms are for 30 years. Extending the lease is possible only twice, but is a contractual bonus and not obligatory. After the term of the lease is complete, the owner may choose not to extend and can legally require the owner of the villa to vacate the land. Normally, unless stated in the contract, the lease becomes null and void in the event of land sale. It is important to get a trustworthy lawyer to draw up a secure contract regarding this.

4. Samui has many construction companies, with mixed quality levels. Thai builders are experienced and competent but are prone to cutting corners, with poor attention to detail and delays. Some companies are foreign managed and may meet expectations better, but it is worth shopping around.

5. Materials in Thailand are generally much cheaper, though slightly more expensive on this island, but quality varies dramatically. Good judgement is required in assessing the correct level of quality, and bargaining skills work well here.

6. The choices for décor, finishing, landscaping and fittings is broad and there are some suppliers on the island, though you might want to go shopping in Bangkok or Chiang Mai for a wider selection at better prices. Many of the villas on Samui use imported materials, but Thailand also produces many good quality items that are suitable, especially for décor.

7. Building plan approval and inspections are fairly easy in Thailand, your architect can advise you, and problems can be ‘taken care of’ with gratuity. However, the industry has been blighted by corruption in recent years, with a number of people caught out.

8. Be sure of the legality of the land you are building on, since some title deeds have been fraudulently issued by corrupt land officials, resulting in problems and loss.

Updated with assistance from Property Report - Asia's leading real estate magazine.

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