Real Estate Broker Association Eastern Seaboard (REBA-ES)
Owning Property
in Thailand
Introduction to owning property in Thailand
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As
Thailand is currently (August 2007) going through political
changes which also involve a total constitutional reconstruction,
there may be some new and/or additional aspects effecting foreigners
wanting to own property in Thailand.
The following information should give the reader
a basic idea of the manner in which foreign ownership of property
has been accomplished up to this time (August 2007) here in
Thailand.
For a comprehensive and up to date over view
of the subject of foreigners owning property in Thailand, we
suggest the advice of a Thai lawyer and/or experienced and reputable
real estate consultant. |
Which
Thai laws govern foreign ownership and purchase of land in Thailand? |
Ownership
of land in Thailand is governed by the Land Code of BE 2497
(1954), the Civil and Commercial Code, the Land Reform for Agriculture
Act BE 2518 (1975), and the regulations set forth by the Ministry
of the Interior. |
Aren't
foreigners prohibited from owning land in Thailand? |
Under
strict application of the existing law it is officially prohibited
for foreigners, including both individuals and juristic entities
(e.g., companies or partnerships), to own land in Thailand.
However, there are exceptions to the prohibition found in the
law itself. There are also other methods of arranging for the
purchase of land in Thailand.
According to section 97 of the Thai Land Law,
the definition of a foreigner includes a Thai registered company
or partnership in which more than 49% of the capital is owned
by foreigners or of which more than half the shareholders or
partners are foreign citizens. |
Can
foreigners own buildings even if they don't own the land? |
Although
Thai law prohibits foreigners from owning land in Thailand,
foreigners have the right to own a structure such as buildings,
detached houses, etc. If foreigners wish to purchase land in
Thailand in order to build a structure, they have two options;
first, forming a joint venture with majority Thai ownership,
and second, procuring a long term lease with a right of renewal.
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How
can a joint venture be created to acquire land or property in
Thailand? |
One
method foreigners can employ to acquire land or property is
by forming joint venture companies with majority Thai ownership
but with adequate safeguards to protect the foreigners' minority
interest.
If a foreigner plans to run a business in Thailand
then he may purchase the land freehold through his Thai majority
limited company. The land will be owned by the Thai Company,
not by the individual. |
How
does a limited liability company allow foreigners to own property?
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Purchasing
property with a limited liability company is the most popular
method for foreign investors as the Articles of Association
can be varied to allow greater protection for foreign minority
shareholders. The regulations vary throughout Thailand, but
the Land Office generally requires that Thai nationals own a
majority interest in a company if they wish to purchase land
legally. |
What
about long term leases with rights to renewal? |
Because
of the barriers in place to the purchase of land by foreigners,
the most effective way to acquire land that a structure (building,
detached house, etc.) resides on is to purchase the land on
a 30-year leasehold with an option to extend the lease for subsequent
30-year periods.
Leases are limited to 30 years, except on land for industrial
purposes, which may be established for 50 years. Similarly,
lease extensions are capped at 30 and 50 years respectively.
Possession of the land leased for an already owned building
is protected by the fact that the building rests on the land;
ownership of the building is separate from the land and cannot
be seized by the lessor once the lease expires. Leases exceeding
three years are enforceable for only three years unless they
are registered with the Land Department. Therefore, a 30-year
lease must be registered with the Land department. In addition,
a lease continues to be valid even in the event the property
on the land is sold. |
What
are the different types of rights to private land? |
Land
can be controlled through the right of possession or through
title deeds and other documentation. Individuals who actually
possess and use land may have the right to possess such land
under the Civil and Commercial Code. The primary form of evidence
for ownership of land is a title deed (Chanoud or Nor Sor 4).
These title deeds must be registered at the Land Department
in the province in which the land is located. It should also
be noted that a parcel of land may be commonly held by several
individuals. A person whose name appears on a Chanoud, or Land
Title Deed, has all the legal rights to that land, can produce
the deed as evidence of ownership to Government officials, can
prove the land has clearly defined boundaries, and can engage
in legal acts upon that land as allowed by law. |
Can
the spouse of a foreigner still own land in Thailand? |
Until
recently, Thai nationals who married foreigners became ineligible
to own land in Thailand. The understanding was that once the
foreigner and the Thai national were married the land became
community property; officials believed this was perhaps a too
convenient way for foreigners to circumvent existing land law.
At present, however, policy has changed; a Thai spouse is now
legally allowed to own land in Thailand. The foreign spouse
may be required to sign a letter declaring the property to be
the separate property of the Thai spouse, consequently waiving
any claim on the land. |
Condo
Purchase |
Real
estate in Thailand is attractive for a variety of reasons. Owning
a vacation home is the dream of many. Others hope to either
spend their retirement in a leased condo or make real estate
purchases as a short or long term investment. While there are
a variety of restrictions on foreign citizens leasing and owning
property and houses or condos in Thailand, there are an equal
variety of legal opportunities.
Let one of our experienced Real Estate Broker
Association agents (See: The
REBA ES Members Directory) assist you through the intricacies
of the process so you can focus your attention on finding a
suitable property, not dealing with the red tape. In addition,
our experienced Real Estate Broker Association agents can help
show you some of the better properties available for purchase
here on the Eastern Seaboard of Thailand. |
How
is a Condominium defined by Thai law? |
According
to the Condominium Act B.E. 2522 (A.D. 1979), a condominium
is defined as a building that can have its separate portions
sold to individuals or groups for personal property ownership.
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What
classes of foreigners may purchase condominiums in Thailand? |
Foreign
investors as well as other foreigners may own condominiums in
the Kingdom of Thailand under the following circumstances. |
What
types of Condominiums are available for foreigners to purchase? |
Most
condominium buildings allow foreigners to purchase a certain
percentage of the buildings condo apartments outright (Complete
‘Free Hold’ ownership). As the condominium buildings
are located in different areas around the country, they may
have varying limits on the amount of units available for sale
to foreigners. |
What
are the requirements for a foreign individual or organization
to purchase a condominium in Thailand? |
In
order to purchase a condominium certain requirements must be
met, for example: 1: A foreigner has permanent residence in
Thailand in accordance with Thai Immigration Law, or 2: A foreigner
is allowed into or resides in Thailand in accordance with Thai
Investment Promotion Law, or 3: A foreigner or foreign legal
entity who brings foreign currency into Thailand, or brings
in Baht currency from the account of a person residing abroad,
or uses foreign currency from their deposit account. This requirement
is normally met by the presentation of a Tor Tor 3 (or equivalent
bank document) form which is provided by the bank receiving
an incoming remittance from abroad. |
Are
there any restrictions to this ownership? |
In
many areas of Thailand a foreigner or foreign legal entity can
acquire up to, but not exceeding, 49% of the total floor area
of the combined condominium units. However, more that 49% of
ownership may be allowable in certain condominium buildings
in Greater Bangkok and various other municipalities and districts
according to Ministerial Regulations. |
What
is the most typical way for a foreigner to purchase a condominium
in Thailand? |
Most
Foreigners purchase a condominium by showing evidence of an
incoming remittance of foreign currency into their Thai bank
account from abroad as demonstrated by a valid Tor Tor 3 form
(or equivalent bank document) from a Thai Bank. |
Can
ownership of a condominium be inherited by a foreigner? |
Property
ownership of a condominium can be inherited if the heir to ownership
meets one of the original criteria for foreign ownership. Otherwise
the condominium must be sold within one year of inheritance.
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Is
a lawyer necessary to purchase a condominium in Thailand? |
A
lawyer is recommended to review the documents concerning the
condominium and to supervise the transfer in conjunction with
an experienced and reputable real estate consultant. |
Are
condominium long-term leases available? |
Yes.
Condominiums may be leased to foreigners for periods of up to
30 years and may have options to renew. Leases of greater length
than 3 years are required to be registered with the Thai Government
Land Department in the district where the property is located.
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