Pattaya Condo

 

Thailand Property Ownership & FAQs


Thailand Land Office

1.1   Thai Land Department of Registration (Land Office)

Buying land or property in Thailand is attractive for investment or business reasons as well as residence or retirement purposes.

Many foreigners wish to buy or lease real estate in Thailand but are confused by the often contradictory information and misleading claims on the internet. There are specific legal issues under Thai land law regulating the ability of foreign nationals to buy or acquire rights to real estate and property in Thailand. Here is a summary of some of the basic principles:

Are foreigners allowed to buy land or property in Thailand?

Thailand land law generally prohibits foreigners from owning freehold land in Thailand. However, there are various exceptions in the law regarding this issue. 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.

 

What are the different ways of acquiring land rights or purchasing property in Thailand?

 

  1. Land Leases: Although Thailand real estate law restricts land ownership rights to non-Thai citizens, foreigners may hold 100% interest in a Thailand land lease. 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 majority 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.
  3. Investment: Thai real estate law allows foreigners to buy and own a limited amount of land based on investment of 40 million baht for five consecutive years, provided that the land is used for residential purposes.
  4. Thai Spouse: According to Thai real estate law, 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. This may have the effect of waiving any claim on the land or property by the non-Thai spouse. This may become problematic in a divorce case as it may be difficult for the non-Thai spouse to prove that the land was marital property. In this case, a skillfully drafted Thailand prenuptial agreement may come in handy 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.

Can Thai nationals buy real estate in their name and then execute an agreement that the land is held for a foreigner?

This is a risky approach because it is technically illegal under Thai property law for a Thai national to act as a nominee of a foreigner to buy real estate. Therefore, the agreement may be illegal and problematic. It is best to consult an experienced real estate lawyer in Thailand for the best available options.

 

Can foreigners own houses in Thailand?

In general, foreigners can own buildings and houses in Thailand as Thai real estate law places no nationality restrictions on ownership of houses or buildings in Thailand.

 

What are the different types of title deeds to land in Thailand?

  1. Chanot (Nor Sor 4): This type of title deed, registered at the Land Department in the province in which the land is located, grants the holder of the documents full rights over the land. It is therefore the strongest type of title deed. The title deed contains a legal description of the land boundary markers that are carefully ascertained and referenced by satellite images.

  2. Nor Sor 3 Gor: This land title designates ownership of land with fairly certain boundaries, however it is not yet a full land title (chanot). A final official measuring is required by the land department along with the placing of official markers. This type of land title may be sold, transferred, or mortgaged. If the owner of the land files a request with the Land Department, surveyors from the land department will measure the land, the title may be changed to Chanot.

  3. Nor Sor 3: Although ownership of the land covered in this title is relatively ascertained, the Land Department has never measured or recognized the boundaries. Therefore boundary markers are normally placed by property owners rather than government authorities. Accordingly, the main risk is whether the boundaries and size of the land is accurate.

  4. Possessory Right: This is normally an inherited land right proven by tax payments at the local administrative office. It is one of the weakest types of land rights.

 

  1. Sor Por Kor 4-01: This is an agricultural title deed, usually found in rural areas. Government land is transferred for agricultural purposes to needy families. Residence is allowed on a portion of the land. It is difficult for a non-Thai to obtain an interest in this type of land deed.

 

How do land mortgages work in Thailand?

Land mortgages in Thailand must be made in writing and registered with the Land Department of Thailand. Mortgages do not include the buildings built on the land after the mortgage date unless they were agreed upon before the mortgage documents were signed. In addition, buildings and other immovable structures may be mortgaged separately and should be registered with the Land Department or local Amphur (province). The fee for registering a mortgage is 1% of the amount declared in the mortgage agreement.

 

What types of taxes must be paid when purchasing land or property in Thailand?

The transferring fee, withholding tax and the stamp duty or Specific Business Tax (SBT) must all be paid by either the buyer or seller when a property is purchased. Although Sale and Purchase agreements differ, the buyer is typically responsible for the transfer fee, while the seller pays the stamp duty or specific business tax and the withholding tax.

Transferring Fee: 2% of the registered value of the property; paid at the Land Office on the day of transfer of ownership

Stamp duty: 0.5% of the appraised value of the property or the purchasing price, whichever is higher

Specific Business Tax (SBT): 3.3% of the appraised or actual price of the property, whichever is higher; Imposed only if the property is transferred less than five years after its purchase (If the SBT is levied, stamp duty will not have to be paid.)

 

I am buying land in the provinces outside of Bangkok. Should I hire a local law firm or a Bangkok-based law firm to help me?

If you intend to hire a local law firm, be sure that the local law firm you contact does not have a pre-existing working relationship with the seller and/or Land Department officials. Such law firms may be biased in their assessment. In most Western countries, it would be deemed a serious conflict of interest and breach of ethics for the same company to act as a real estate broker and an attorney for the same client. However, in Thailand, certain companies marketing to non-Thais do exactly that.

Read 4578 times Last modified on Tuesday, 18 September 2012 19:31
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