Before you consider buying a property in Thailand, do you have sufficient information about property laws in Thailand? For the past decades, Thailand has seen an influx of foreigners coming to Thailand for vacation and decided to acquire a property in Thailand because it’s cheaper than their home country. Unfortunately if you don’t understand the Thai laws your money could go down the drain.
Are Foreigners allowed to own land in Thailand?
Generally, foreigners are not allowed to directly purchase land in Thailand. You may purchase the property, but the Thai laws prohibit foreigners from owning land in their own name. The most common option is to set up your own Thai Company to own the land on your behalf or enter a leasehold ownership with the Land Owner. It’s a fact according to the Thai Law that although foreigners cannot own land in Thailand, he can own the house or structure built on the said land.
The following methods are ways foreigners can own property in Thailand the right way.
- Buy a Condominium – One of the easiest method to buy property in Thailand is buying a Condominium. Under the Thai Condominium Act, foreigners are allowed to own the freehold up to 49% of the total unit space. For example, if there are 100 equally sized condominiums in a project, 49 would be available for foreigners to own, with their personal name on the title deed or Chanote.
- Leasing Property or Land – Another easy method is to lease an apartment, house or land for a long period of time. A foreigner can lease property and have their name on the title deed or Chanote for an initial 30 years. According to the Civil and Commercial Code, the property lease can be renewed further for 2 years consecutive times allowing a leasehold of up to 90 years. In most cases the owner of the projects will sign the renewal for the 90 years in advance in the contract to ensure the buyers or their heirs will renew the lease for owners after the initial 30 year period.
- Purchasing through a Company – Another alternative method is to set up a company, a majority Thai Owner Company which involves having a local lawyer or accountant who can arrange the process to legally purchase land using the company name. A foreigner can hold up to 49% of the company shares, the rest of which must be held by a Thai Juristic Persons who will sign over the control of their shares to you. Although the land can be owned by the company, the managing director and shareholders can still control the company. It is advised to always consult with a reliable local Lawyer to explain the different options and handle the entire process for you.
- Marriage to a Thai National – A foreigner can legally purchase land in Thailand if he or she is married to a Thai national, but name on the Title Deed has to be of the Thai national. The couple may sign a declaration at the Land Office stating that the funds used for the purchase of property was given to your spouse as a gift. To protect your interest in the property in case of unpleasant things happening, first make sure your spouse is the one you want to invest the property with and you may enter an agreement with your spouse and have a reliable lawyer oversee this agreement for you.
- Investment – BOI or Board of Investment, is a more uncommon type of ownership, but possible. The Thailand ‘Board of Investment’ allows foreign investors to buy and own freehold land up to 1 rai (1600 square meters) under section 96 of the 1999 Land Code Amendment Act. An investment of 40 million Thai baht is required with the condition that the land is used for residential purposes only or is beneficial to the country. This type of ownership is not transferable by inheritance and is limited to the lifetime of the foreign owner.
Understanding the different methods of owning property in Thailand is one of the key points to know before deciding to purchase property in Phuket or Thailand. Always consult with your favorite local agent before making any decisions!
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