Buying & Leasing Property

Thailand has served as a trade and business hub for centuries. It was a buffer zone between colonial powers because of its strategic location. As a result, it was the region’s only nation that wasn’t colonized. The property market in Thailand is still able to reap the rewards from its strategic placement on the map today. Buying and leasing property in Thailand is sought after as never before. With the local property laws, however, the processes aren’t as easy as you may be accustomed to. Allow us to guide you through the process, so your buying or leasing process can be as hassle-free as possible.

Real Estate rights for foreigners

Under the Thailand Civil and Commercial Code foreigners in principle have the same property rights as are available to Thai nationals, however, it is under the Land Code Act B.E. 2497 (1954) prohibited foreigners from owning land in Thailand. As ownership of land is an essential element of any real estate ownership it leads to the conclusion that, besides an apartment in a licensed condominium, there is no freehold ownership of real estate (land and house) available for foreigners in Thailand.

Ownership of land is also not open to foreign companies, including Amity treaty (US) companies, BVI, or Hong-Kong limited companies, or any other foreign juristic entity. These companies may, similar to foreign individuals, have a minority interest in a Thai company, but may also NOT use nominee structured holding companies for land ownership.

However, there are some legal exceptions to this. There are also other methods available for acquiring valid and legal rights to land and real estate in Thailand that do not amount to outright ownership:

1) Land Leases

Foreigners are expressly permitted to hold a 100% interest in a Thailand land lease. The foreigner effectively leases the land or house from the Thai national who remains the owner of the land. Thailand lease law allows a 30-year maximum lease period, with the possibility of renewing the lease for additional 30-year periods.

2) Company Ownership

Thailand-registered companies with a majority of Thai ownership are able to buy land in Thailand. In the past, it has been common for foreign nationals to acquire an interest in Thailand real estate as minority shareholders in a Thai majority company. However, in recent years, the Thailand Land Department has become stricter in investigating limited companies for the use of the “nominee” Thai shareholders, who do not possess a legitimate interest in the company owning the land. Nevertheless, it is still possible for a non-Thai shareholder to secure his investment in a Thai limited company through legal means.

3) Investment

Thai real estate law allows foreigners to buy and own a limited amount of land based on an investment of 40 million baht for five consecutive years, provided that the land is used for residential purposes.

4) Thai Spouse

A Thai spouse of a foreigner may be allowed to buy land or property in Thailand in his or her own name. However, the married couple may be asked to sign declarations at the Land Department to state that the funds used are the separate property of the Thai spouse. Any claim on the land or property by the non-Thai spouse could therefore be waived which might be problematic in a divorce case. It could make it difficult for the non-Thai spouse to prove that the land was marital property. In this case, a skillfully drafted Thailand prenuptial agreement may help to minimize the risk to the non-Thai spouse.

5) Usufruct Habitation and Superficies

A non-Thai may acquire a life-term interest in certain types of property rights in Thailand. One example, a usufruct, is a right to use (and profit from) land and is similar to a leasehold but is non-transferable with some important differences.

Cost of a Thai Condo

It is difficult to say how much a condo in Thailand will cost as prices vary greatly based upon size and location. Most people compare the size of a condo in meters squared to determine the value and rental potential of a property.

CBRE Thailand released an overview of 2016 Q1 condos in Bangkok, and as we can see from their table below, they state entry level is considered anything below 70,000 Baht per square meter.

Level / Price per sqm

Entry / Below 70.000 THB
Mid-Range / 70.000 – 89.999 THB
Upper-Mid-Range / 90.000 – 119.999 THB
High End / 120.000 – 169.999 THB
Luxury / 170.000 – 249.999 THB
Super Luxury / Above 250.000 THB

Buying a Condominium in Thailand – 3 Steps

Step 1: Finding a Condo
Find your right Condo by considering from type, price, and location of the property.

Step 2: Consulting a Lawyer
Let the lawyer do a title search over the property and review the contracts before signing.

Step 3: Obtaining a mortgage
Obtaining a mortgage to finance your purchase of property in Thailand.

Re-selling a Condominium in Thailand – 3 Steps

Step 1: Using a real estate agent or broker

A reputable agent or a broker may make it easier for you to find your buyer either locally or internationally.

Step 2: The price is right

1. Make an observation
Observe recent sales of units within your condominium or other similar condominiums around your area.

2. Evaluate by surveying and appraisal firms
Have your property evaluated by a number of surveying and appraisal firms around town.

Step 3: Other pre-contractual considerations

1. Make a checklist of any defects
Make a checklist of any defects on the property which should be disclosed to your potential buyer.

2. Keep in mind of debts you have on the property
Keep in mind any liens or debts you have on the property as this should be included in the contract.

Meaning

Villas may be categorized as houses but the difference is that they connote a sense of exclusivity and class. Villas are usually located in a gated complex and on a separate plot of their own; whereas houses are not.

Foreign ownership

Even though Thai law does not permit foreigners to own land, leasing land under a land lease agreement registered with the Land Department and consequently building a structure or owning a house on the leased land are allowed.

To expand their rights as land lessees, foreigners must acquire the correct legal ownership of the structure. The term of the land lease for foreigners invariably relates to the ownership by possession or the right given to them to use and possess the land. This could be established by obtaining either of the following from the local land office:

• A building permit, issued under the foreigner’s name
• The Thai script sale agreement

Foreign ownership of the villa must also be made in writing and must be registered by the local land office. This is in accordance to the Civil Code Section 456 under the Thai Contract Law.

Transfer of ownership

The process of transferring the ownership of a villa to a foreigner involves the following:

• Announcement of the sale. This requires the presence of both the foreigner and the seller at the local land office.
• Issuance of notification form for the sale. This is a 30-day public notice by the local land office to see if anyone will contest ownership of the villa structure.
• Completion of the sale by the local land office.

Documents required for the transferring of ownership are as follows:

• Building permit or sale agreement
• Ta Bian Baan
• Passport
• Tor-Dor 21 or power of attorney form from the local land office (if applicable)

When a Thai villa sale agreement is offered, transfer fees and taxes are charged to the foreigner in the process as described above. Factors that determine the rates for property transfer fees and taxes include the actual sale price and the government-appraised value of the house.

Buying a house or villa in 3 steps

Buying a house or a villa in Thailand always requires the use of a property lawyer who can guide you through the process. Property in Thailand is complex and for the better part unregulated.

Step 1: Finding a House in Thailand
While many wish to own a house in Thailand, it is important that you consider the following when purchasing a house:

• Make use of registered lawyers in Thailand and reputable estate agents.
• Do some research.
• Read through the Real Estate pitfalls in Thailand.

Be aware that many of the problems that do arise when buying a house in Thailand can be avoided early on in the property search.

Step 2: Setting up Your Thai Company
Once you have decided which house you are going to purchase, always consult a lawyer before signing any documents. Foreigners may not own a house in their name; however, their Thai-registered company may own the house. There are different forms of business entities in Thailand. The most commonly used is a Thai Limited Company. There are certain business registration criteria for the limited company. The Thailand Amity Treaty is also still in existence for Americans and there are also tax considerations so check Corporate Tax in Thailand if you are going to do more than own a house or need a Thai Work Permit.

Step 3: Buying a House in Thailand
Once we register your Thai Limited Company we do the following amongst other property services so consult our property lawyer today. They would do a title search and check the contracts before signing. Also, note the type of Title Deeds in Thailand. If you are buying a house off plan, you would need legal advice as to buying in pre-construction projects. There is also the cost of transfer for your condominium and Thailand property taxes. Use the property transfer calculator to check your fees payable. Always consult a reputable firm of attorneys before you embark on the process of buying a house in Thailand.

Buying a land in Thailand