Owning Thai Real Estate as a Foreigner
Foreign Land Ownership in Thailand
Normally, foreigners (non-Thai nationals and non-Thai juristic persons) are prohibited by law from owning land in Thailand. But there are some conditions that permit foreigners to own land:
- The foreigner invests more than THB 40 million in Thailand.
- The investment must remain in Thailand for more than 5 years.
- The foreigner receives permission from the Ministry of Interior.
- The investment must be buying Thai government bonds, buying Real Estate Investment Trust (REIT), investing in a company with BOI promotion, or investing in a business that meets the promotion of BOI.
- The land size for residential use must not be greater than 1 rai.
- The land size for commercial use must not be greater than 1 rai.
- The land size for industrial use must not be greater than 10 rai.
- The land size for agricultural use must not be greater than 10 rai.
Foreigner Buying and Owning a Condominium in Thailand
Thai law permits a foreigner to legally purchase and own a condominium. However, one condominium project cannot have more than 49% of the units owned by foreigners. For example, in a 100-unit condominium project, foreigners can only own 49 units. Furthermore, the foreign buyer must show that the funds being used to purchase the condominium are arriving in Thailand from overseas.
Foreign Ownership of a Villa in Thailand
Villas are popular with foreigners in destinations like Phuket and Koh Samui. Developers may have registered the villa project as a condominium project, thus a foreigner can own the villa. However, the project needs to comply with condominium regulations and receive approval from the appropriate government officer. Foreign buyers are encouraged to do their due diligence before buying a villa.
Possess the Asset by Lease Contract
Leasing is a common method used by foreigners to possess Thai property. Real estate leasing has 2 terms:
- Short-term lease – a lease contract that has the time duration within 3 years. This contract can be done by lessor and lessee. It does not need to be registered at the land office.
- Long-term lease – a lease contract that has the time duration between 3 years to 30 years. This lease contract must be registered at the land office.
The above are the options for foreigners to possess Thailand real estate. Below are the major factors investors should always consider before purchasing Thai Real Estate, especially in land investment:
- Check the title deed – to verify that the title deed is real and also to make sure that it is the deed for the property. This process can be done at the land department. This process will help the buyer understand about any binding conditions related to the property.
- Check the Town Planning (local zoning laws) – to understand what can be built on the land.
- Check the Building Control Act – to find out the maximum potential of the development e.g., what is the maximum size? what is the maximum height?
- Find out any other related law – The Town Planning and the Building Control Act are two major regulations enforced nationwide. However, in some areas, there may be other laws and regulations that affect land improvement, e.g., environmental law, coastal law.
Foreign buyers are strongly urged to hire qualified professionals to properly assess real estate investments in Thailand.