The straightforward answer is yes, foreigners can legally acquire property in Thailand, but certain restrictions apply. Specifically, foreigners are permitted to own condominiums, yet they are prohibited from full ownership of land, such as villas or townhouses.
Here are three key points to understand about property ownership by foreigners in Thailand:
- Condo Ownership: Foreigners are allowed to own condominiums in Thailand.
- Land Ownership: However, foreigners are not permitted to have full ownership of land in Thailand.
- Ownership of Structures: Foreigners can own structures and buildings located on a plot of land.
The most straightforward way for a foreigner to have their name officially registered on the title deed (known as “Chanote” in Thai) and own real estate in Thailand is to purchase a condominium. It is crucial to ensure the legitimacy of the title deed and confirm that it corresponds to the actual property, a process that can be conducted at the land department.
3 Ways for Foreigners to Own Property in Thailand
1. Condo Ownership
Purchasing a condo is the most straightforward option for foreign property ownership in Thailand. Condo owners are registered on the title deed with a “Condominium Freehold” title. However, Thai law mandates that only 49% of the condo’s registerable area can be foreign-owned (Foreign Quota), with the remaining 51% reserved for Thai ownership. When the foreign quota is full, foreigners can only acquire condo units on a leasehold basis.
2. Leasehold Property
Another option is to acquire land on a leasehold basis. Thai law allows a maximum lease period of 30 years, with two subsequent renewals, totaling 90 years. While leasehold does not grant ownership rights, it provides exclusive usage rights without ongoing paperwork hassles. This option may appeal to retirees seeking a holiday home.
3. Property through a Thai Company
Some buyers opt for a Thai company structure to gain more ownership rights, although this method operates in a legal gray area. Setting up a Thai company for property acquisition requires at least 51% Thai shareholding. The Thai government and land offices discourage this approach due to concerns about the use of “Nominee Thai Shareholders” as fake investors. When done legally, using real shareholders and/or Thai partners, this method offers indirect ownership and control. It is commonly used by investors purchasing landed property or developable land plots.
Factors to Consider for Foreign Land Ownership:
In addition to the maximum investment of over 40 million baht or the 49-51 ownership ratio, there are additional requirements for foreign land ownership in Thailand:
- The investment must remain in Thailand for over five years.
- Permission must be obtained from the Ministry of Interior.
- Land size for industrial or agricultural purposes must not exceed 10 rai (16,000 sqm.).
- Investment options include buying Thai government bonds, investing in Real Estate Investment Trusts (REITs), or participating in a BOI-promoted business.
Pitfalls When Buying Thai Property
Buying real estate should involve careful planning and consideration, especially for foreigners seeking a retirement home, a second residence, or an investment opportunity.
Skipping Title Search
Before making any deposit or reservation agreement, conduct a thorough title deed examination at the Land Department. Ensure the seller possesses clear and legal land title. This search will reveal the land’s history, uncovering encumbrances like liens, leases, or mortgages. It also checks zoning, environmental regulations, and planning codes. Neglecting this step can lead to unexpected limitations on land use.
Neglecting Due Diligence
Every financial transaction, including property purchases, requires due diligence. Research the property developer’s history and performance. Consult previous buyers for feedback or hire a local lawyer to assess the project’s background and legal aspects.
Buying without Legal Counsel
Purchasing property in Thailand without local legal representation can be risky. Thai contracts may differ from international standards, so consult with a lawyer or solicitor to understand the process and local laws before signing any agreements.
Investing in Mismanaged Projects
Consider the experience and track record of property developers. New developers may offer lower prices but could lack the expertise to manage projects efficiently. Established developers may be less flexible but offer reliability. Research their past projects and seek feedback from previous buyers.
Assessing the Surrounding Area
Check for potential construction noise or blockage of views from nearby developments, especially if you plan to purchase a property on a high floor. Ensure your selected location aligns with your expectations.