How to Own Property in Thailand

Property ownership for Thai nationals is relatively straightforward, as you’d expect. So we’ll only consider the ownership hurdles for foreigners.

Land and Houses.

Under the current law in Thailand, foreign nationals (with a few exceptions) are not allowed to own LAND in Thailand, but may own a building or structure built on the land.

If buying a house, the developer will usually lease the land to the purchaser for a period of 30 years with an option to renew the lease for a further two 30-year periods, to give effectively a 90 year lease. A good leasehold contract should include a clause which states that if the land law in Thailand changes, making a freehold option available, the title may be converted from leasehold to freehold at the leaseholders request.

The property which sits on the land may be purchased by the indivdual or a company such as a BVI (British Virgin Islands) company set up by the buyer.

It is usual for the purchaser to set up a BVI company which holds the lease on the land and the property freehold title. If the BVI option is taken it makes the resale process very simple as the company can simply be transferred to the new owner and changes to the land title and lease are unecessary.

It is always advisable to appoint a good lawyer when purchasing any property, for due diligence on the land title and to ensure a lease is worded correctly.

A Thai or Thai company is allowed to own the freehold on any property (including the land). The foreign shareholding of a Thai company can be a maximum of 49%, but there are different ways to ensure that you, as a foreign minority shareholder, have complete control of the company in terms of management and finance. Once again, a good lawyer is essential to help with this.

If you have a thoroughly trusted Thai partner or spouse, you could of course put the property or land in their name. However, you would have to sign a declaration that the funds used for the purchase belonged to the Thai. This could clearly lead to problems in the event of any dispute between you. A compromise might be to allow the Thai partner to own the land and then lease it back from them. A 30-year lease is 100% protected under Thai law, and should be renewable.

Apartments and Condominiums.

Apartments are, by their nature, only available leasehold, and may not be governed by any rules and regulations in the same way as a condominium.

A condominium is an apartment which conforms to the rules laid down in the Thai Condominium Act. The act relates to both the way the building is constructed and the way it is managed. The rules are designed to ensure that the building is well managed according to certain procedures, and that the owners, collectively, have a say in the management of their property.

Condominiums are bought freehold and, currently, 49% of the saleable area can be sold directly to foreigners, with no ownership complications. Consequently, there is often a rush for foreigners to buy up the allowable 49% of such a development. The only stipulation to buying a condominium under the “foreign freehold” quota is that the funds used to buy it are sent in from overseas in any currency other than Thai Baht. The receiving bank issues a “foreign exchange transaction form” which is used during the condominium transfer process at the Land Office. This form can then also subsequently be used to allow repatriation of funds in the event of selling the unit.
The remaining 51% can be owned freehold by Thais or Thai companies, and may then be leased out to foreigners in the same way as a house would be.

Conclusion.

Whatever, or however, one buys property in Thailand, the advice of a good lawyer should always be sought. Despite the apparent hurdles to most property purchases, once the decision has been made to buy, the hurdles can be overcome and life can be enjoyed to the full in this wonderful “Land of Smiles”.