Buying Property in Thailand
Thailand attracts people to stay long-term in the country for many reasons. Entrepreneurs, skilled foreign workers, executives and their families, or semi to full-time retirees looking to enjoy their golden years in the tropical sunshine. Many will seek to secure a property for their time in Thailand, so let’s look at three of the most common questions related to property purchases here in the “Land of Smiles.”
Question: What should buyers be aware of before purchasing in Thailand?
Answer: Firstly, Thai property law is intrinsically different to that of your home country. Add to that all the official paperwork related to a property purchase will be written in Thai. Therefore, it’s recommended you engage the services of an experienced agent and independent property lawyer who can communicate effectively in both Thai and English and will work to ensure your interests are protected. Especially in the resale, secondary home market and higher value properties. For new developments (buying brand new homes) it’s less of a requirement, most of the larger Thai developers have internal legal teams that will help complete all the correct legal formalities.
Critically, when purchasing Condo property in Thailand, you will need to show proof of those funds coming into the country—for a deposit and the completion of the purchase. This is particularly relevant if you want to sell up and leave Thailand in the future, taking your funds with you. The Full funds transferred into Thailand for property purchases must be marked as that and verified by obtaining a FET—Foreign Exchange Transfer form—from the receiving bank in Thailand. For condo apartment purchases, the FET document is presented to the Land Office (with the other sales documents) as the formal Title for the property will not be issued without it.
Question: What types of properties can foreigners own in Thailand?
Answer: Under Thai law, foreigners cannot own land directly in their name. However, they can purchase condominiums outright (Freehold) or buy a landed property and lease the ground (usually for 30 years, with option to extend) on which the property sits. Let’s look at these in a little more detail.
A Foreign Freehold Condominium is the most straightforward way to own property in Thailand. Under Thai law, buyers need to be aware of the critical restriction: in any apartment/condo project, not more than 49% of units can be foreign-owned.
If that 49% foreign freehold quota in a condo has been met, a leasehold could be another arrangement. In this way, you are effectively renting a property (long-term) from the actual owner (the “freeholder”). Every lease needs to be registered at the local Land Office. In doing so, the lease agreement acts as a lien against the title deed giving the foreign lessee a more secure legal standing.
Question: What about owning a villa or house in Thailand?
Answer: Landed Property refers to the actual plot of soil and rock plus the landed house, townhouse, bungalow or villa sitting on top of it. The most common way to obtain landed property is to own the building and lease the land. The foreigner owns the building outright and leases the land it sits on from the freeholder (an individual or a company, e.g. a developer). Foreign buyers could also take out a 30-year lease on a plot of land and then build their dream villa on that land, as the restrictions on land ownership do not apply to building ownership.
Some local Expats have Thai spouses, with the Expat holding the ownership of the structure in their name and putting the freehold (or just the whole property) in their spouses name.
With very few exceptions, it is best to accept that you cannot own land directly in your name in Thailand if you are a foreigner.
Some exceptions are available for Foreign business owners, who via the companies are allowed to place 100% freehold ownership under the business name. We recommend speaking with a lawyer about business ownership in this structure.
Much more can be explained around property ownership options in Thailand, though here, we‘ve attempted to answer the three most common questions.
