FAQ’s

The property ownership laws of Thailand are somewhat nationalistic, whereby foreign individuals can legitimately secure property only in certain ways. The main issue is real estate, but similar laws cover other items. If you are not legally established in Thailand and following procedures, then you will take risks.

Foreigners can buy some things outright. Other things must be leased or bought properly. The most common methods of properly securing property are:

• Be the largest shareholder of a domestic company, and have the company own the property (see details below, as you will own less than 50%, usually 39%); or
• Sign a 30-year (or less) lease with a domestic company or Thai individual, with an automatic option to renew for another 30 years. This is called the 2×30 (“two times 30”) way.

 

1. A foreigner can own a condominum as long as less than 49% of the condos or apartments in the building are owned by foreigners.
2. A company can own property such as land and a house (and hence the foreigner can buy land and a house via their company) as long as no one foreigner owns more than 49% of the company (recently amended from 39%) and total foreign ownership of the company does not exceed 49%.
3. The Thai wife of a foreigner can own property (a recently changed legal status due to gender equality in the new 1997 constitution revision), in her name only. This is fine as long as you don’t have marital problems. (The same, of course, goes for a Thai husband, but the law was changed recently for Thai wives due to the new constitution guaranteeing equal rights.)
4. A foreigner can lease land for 30 years, with an option for another 30 years, according to articles in the press and as confirmed by every lawyer I’ve asked. (If you live longer than 2×30 years, consider yourself lucky in another regard.) This is referred to as the 2×30 (“two times 30”) option.

 

Foreigners are allowed to purchase Condominiums in Thailand. Buying a condominium is the simplest and most popular form of purchase by a foreigner in Thailand. Under Thai law, 49% of the internal area of a condo building development excluding common ares, can be assigned to be owned by foreigners.

In order to make the purchase of a condominium, foreigners are required to transfer funds from overseas with funds denominated in foreign currency. Once the funds are transferred, they are required to be marked as a condominium purchase.

It needs to be verified through obtaining an FET – Foreign Exchange Transfer or what is known as a Tor Tor Sam document from the receiving bank in Thailand. The FET document is required when transferring the Title Deed at The Lands Department. The purchaser is then issued with a certificate of ownership.

Ownership of land is governed by the Land Code BE 2497 (1954) Thailand Civil & Commercial Code, Land Reform for Agriculture Act BE 2518 ( 1975 ) and the regulations set forth by the Thailand Ministry of The Interior. Although Thai Law prohibits foreigners from owning land in Thailand, there are various ways in which you can structure and establish a controlling interest in a Thai Company that owns the land or owns a lease for the land in your own name, all complying with existing Thai Law. Long term leases of land are the most common way to purchase a house and land in Thailand for foreigners today. A foreigners lease rights are formally recognized by the Thai Law.The land lease is executed and registered once, after which very little legal maintenance is required. You can have a 30 year lease which is registered at the Land Office; with a prepaid option to renew for a further two periods of 30 years each.The foreigner may also be given the option to purchase the land should the law in respect of foreign ownership of land change in the future. In order to be enforceable, any lease for a period of longer than three years must be registered, which involves payment of a registration fee and stamp duty based on a percentage of the rental fee for the whole lease term.

YES. Although Thai law prohibits foreigners from owning land in Thailand, foreigners have the right to own buildings. A common structure is for the foreigner to enter into a long-term lease for the land from a Thai company or individual, and to build the home which the foreigner owns.

Yes. A person wishing to buy property, including a foreigner, may purchase a property without being present at the time of registration of ownership at the Land Department. This shall be done by appointing, by a power of attorney, a lawyer or some other person to act on your behalf.

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.
The Land Code has been amended to allow foreigners to own land if all of the following requirements are met:

1. The land is for residential purposes.
2. The land does not exceed one rai (in area; see conversion to western units below).
3. No less than 40 million baht is remitted into Thailand for investment.
4. Foreigners abide by Ministerial Regulations governing the nature of the business that the foreigner will engage in, the period of time for maintenance of the investment, and the location of the land owned.
5. Permission is granted by the Board of Investment (BOI). 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. This does not happen often.

The following taxes apply for purchases of property in Thailand:

1. Transfer Fee of 2% ( 0.01% until April 2010) of land assessed value.
2. Business Tax of 3.3% (0.11% until April 2010) of the sales price or the assessed value, whichever is higher, must be paid in cases that a seller has a property in his possession for less than 5 years.
3. Stamp Duty of 0.5% of the appraised price must be paid only when a specific business tax is not applicable.

NOTE: the matter of who pays for these taxes is negotiated at time of offer. It is very common that these taxes are shared equally between buyer and seller.

There are no property taxes as such in Thailand that are exactly equivalent to the property taxes in the west. The most comparable taxes on properties in Thailand are the Land Tax and the Structures Usage Tax. The Land Tax levied on land is so miniscule, that in practice the body charged to collect it, rarely bothers to do so, and if they do, they usually wait several years until the amount accumulates. The second tax, the Structures Usage Tax, relates to buildings, is collected by the municipal office or district office, and is only applied to properties used for commercial purpose.

The taxes when selling a property are the same as when buying, except there is also a withholding tax. This tax ranges form from 0 to37%. The tax rate varies based on the income of the seller as follows:

• 0 to 80,000 THB: 0%
• 80,001 to 100,000: 5%
• 100,001 to 500,000: 10%
• 500,001 to 1,000,000: 20%
• 1,000,001 to 4,000,000: 30%
• 4,000,001 and above: 37%

The basis of the tax is the government appraised value less a deduction of between 50% and 92%, depending on how long you own the condo. The longer you own the condo, the lower the deduction from the appraised value, and therefore your withholding tax liability is higher. Specific withholding rates are as follows:

• 92% if you have held the property for one year,
• 84% for two years,
• 77% for three years,
• 71% for four years,
• 65% for five years,
• 60% for six years,
• 55% for seven years,
• 50% for eight years or more.

As with buying property, the following taxes apply for purchases of property:

1. Transfer Fee of2% ( 0.01% until April 2009) of land assessed value.
2. Business Tax of 3.3% (0.11% until April 2009) of the sales price or the assessed value, whichever is higher, must be paid in cases that a seller has a property in his possession for less than 5 years.
3. Stamp Duty of 0.5% of the appraised price must be paid only when a specific business tax is not applicable.