Property & Ownership
Taiyang Property aims to make buying a condominium in Thailand a straightforward process. But It helps to be aware in advance of some of the legal requirements If you are considering buying property in Phuket, the first thing you should know is that under Thai law, foreigners are not allowed to own land as we would expect to own land without restriction in our own country. Please see the expanded ownership section on land below.
Foreign nationals do have the right to the ownership of buildings distinct from the land such as condominiums and villas.
Foreigner nationals can own:
- A unit in a registered Condominium.
- A building distinct from its land.
- A registered leasehold of up to 30 years for all types of titled land or buildings.
Foreign nationals can not own:
- Freehold land.
- More than 49% of the shares in a Thai company that owns freehold land.
Purchasing a Condominium Under the Condominium Act (1979) foreigners can own the freehold of 49% of the total unit space in any legally registered condominium building. The purchaser must request a letter of guarantee from the condominium juristic person setting out the proportion of foreign ownership which must be submitted to the Land Department upon transfer of ownership.
- Foreign Exchange Transaction Form
A foreign purchaser must bring in 100% of the funds from overseas in foreign currency and will need a Foreign Exchange Transaction Form (FETF) from the Thai bank in order to provide evidence of this to the Land Department. Due to strict money laundering regulations, a FETF is also necessary to avoid complications and remittance tax when repatriating funds should the foreigner sell the condominium at a later date.
Note: You can only obtain a FETF for any inward remittance for amounts not less than the equivalent of USD 20,000. You should clearly indicate the payment purpose on the payment order form in the field for a message for the beneficiary, including the name of the condominium and the unit number.
2. Owning Land
Foreigners may not own Freehold land outright in their own name Or more than 49% of the shares in a Thai company that owns freehold land.
The two most popular ways for foreigners to purchase land are:
- Long-Term Leaseholds
Registered leaseholds are secure and relatively straightforward. Long term leasehold can be structured to be tantamount to freehold ownership. Typically, the land is leased for a period of 30 years, renewable a further two times giving a total of 90 years. Security of the possession of land is assured by the fact that you are the legal owner of the buildings which occupy the land. Therefore, the lessor cannot take possession of the property upon expiration of the lease as the property is separated from the land and will not be a component part under the Civil Law.
- Limited Liability Company
If you are not comfortable with the leasehold method, the alternative is to set up a Thai company that you control, and which can legally purchase land. Put simply, as a foreigner you are allowed to own 49% of the shares in a Thai company. The rest of the shares must be held by Thai juristic persons (which your lawyer can arrange), who will sign over control of their shares to you. The land will be owned by the company. However, as managing director of the company, you control the voting of the other shares, and therefore you have control over the ownership of the land.
Thai Women married to Foreigners
Prior to 1998, any Thai woman who married a foreigner would lose her right to purchase land in Thailand. She could, however, still retain land that she owned prior to marrying the foreigner. However, the recent (1999) Ministerial regulation now allows Thai women married to foreigners the right to purchase land, but the Thai spouse must prove that the money used in the purchase of freehold land is legally solely theirs with no foreign claim to it.
This is usually achieved by the foreign spouse signing a declaration stating that the funds used for the purchase of property belonged to the Thai spouse prior to the marriage and are beyond his claim.
Benefits of owning a condo:
- Foreign buyers can own the condominium in their own name;
- The condominium is issued with a title deed similar to a strata title;
- Owners may use the title deed as collateral in Thailand;
- Maintenance fees are relatively lower compared to other countries;
- Can be a lot more affordable than houses with land;
- Easier to rent out due to its general size and location;
- Condo resale is faster and more straightforward compared to a land and house.
Benefits of buying a house/ villa :
- Larger space for living
- Greater level of privacy
- Full control of maintenance of the house
- Able to enjoy appreciation on the house