You need more information?
Let us find the right lawyers for you
Last Updated: Mar 19, 2024
For foreigners considering property ownership in Thailand, understanding the process and relevant laws is crucial. These laws are not typically compared to the property ownership laws of other countries, as the Kingdom strictly regulates which foreigners can own property, the circumstances under which they can do so, and the types of property available for purchase.
When speaking of owning property in Thailand, there are two generally accepted methods for foreigners to acquire property. These allow for effective ownership of property if not technical ownership.
Under the Condominium Act of 1979, there's a special condition where foreigners are allowed to have a freehold on condominium units and a common property. However, only 49% of the total area of a condominium building can be owned by a foreigner, so it’s important to be aware of a condo’s ownership quota before considering buying a unit.
In this case, foreigners can register leasehold rights at the Land Office for a condominium or land. While the Land Code Act reserves land ownership for Thai nationals, foreigners can effectively utilize land through leasehold tenures. This allows foreigners to own buildings or structures built on the land, enabling them to freely utilize the property as long as they follow all laws and regulations.
The maximum lease period of land under Thai law is limited to 30 years. After its expiry, the lease can be renewed for another 30 years with the assurance of another renewal for an additional 30-year period thereafter. This extensive lease period enables a kind of de facto ownership of the land.
It should be noted that each renewal may incur a registration fee based on the rental rate in the lease agreement.
As the laws are complex and restrictive, the process for buying property in Thailand can be risky if the proper steps are not taken. Prospective buyers should carefully consider the following steps when looking to make a purchase:
When purchasing a property, such as a condominium, foreign buyers must show the Land Department that the total purchase amount has been transferred from a foreign country to Thailand in the original currency. This involves providing a declaration and documentation of the fund's source during the ownership registration process. If funds exceeding 50,000 USD (or its equivalent) are transferred or brought into Thailand in foreign currency, the bank will issue a Foreign Exchange Transaction (FET) Form.
In the case of bringing cash into Thailand, it's necessary to declare the funds to the Customs Office and present a receipt from the Customs Office to the bank to obtain a confirmation letter.
Additionally, when transferring foreign currency to Thailand, ensure that the beneficiary's name in the FET matches the buyer's name specified in the SPA.
The total transferred amount must not be less than the net price (in Thai baht) of the condominium unit specified in the SPA.
The required information for transferring money to Thailand includes:
When it comes to purchasing a Freehold Property, there are several taxes to consider:
Leasehold property entails one main tax, which is 1.1% of the registered rental or lease amount.
Unlike some countries, Thailand doesn’t impose capital gains tax on property sales as withholding tax on the property serves as a comparable substitute. Usually, the seller bears this responsibility, although it's open to negotiation between the parties.
Reserved for significant maintenance tasks, like extensive repairs or equipment replacements, which occur infrequently. Contributions to the fund are typically made once upon purchase, with the possibility of additional collections for major expenses decided by the owners collectively. Amounts range from 500 to 900 THB per square meter.
This covers monthly operational expenses for shared facilities and spaces, such as electricity, maintenance of common areas, security services, etc., depending on available amenities. Recurring fees are usually collected monthly, sometimes in advance for up to two years, to ensure consistent funds and avoid delays. Amounts, calculated per square meter per month, may fluctuate based on actual maintenance costs and are subject to change through owner meetings.
This upfront payment is required for registering electricity and/or water meters in new residential properties. Usually included in the transfer payment, it's refunded upon change of ownership.
This is a monthly charge for maintaining utility meters, with invoices sent to the unit owner's address. Failure to pay may result in the removal of the meter.
Initially covered by the developer for 1-2 years, it protects against structural damages and risks during construction and transfer periods. After this period, the building's juristic committee decides on yearly insurance coverage, billing each unit owner based on ownership ratio.
On the day of the transfer, all involved parties — buyer, seller, and, if applicable, the bank or an authorized representative — must meet at the Land Department. Failure of any party to attend will stall the transaction process.
If a mortgage exists on the unit, the buyer's representative presents the original cashier's cheque to the seller and/or bank representative to facilitate the release of the mortgage.
Both the seller and buyer or their representatives must sign the sale and purchase form prepared by the Land Officer, along with any necessary transfer documents.
The Land Officer will then update the original title deed, handing it over to the buyer or their representative, officially naming the buyer as the new owner of the unit. Depending on prior agreements, both parties are responsible for paying taxes and transaction fees to the Land Officer.
Once the Ownership Transference is complete, the buyer, now the unit owner, gains the right to move furniture/appliances into the unit and either occupy it or rent it out. They can contact the juristic office for assistance and will receive a welcome box.
Within the "Welcome Box" are keys, access key cards, parking stickers, remote controls, the juristic regulations handbook, and warranties for the appliances in the unit.
Let us find the right lawyers for you