Options for owning property, or land in Thailand as a foreigner.
Foreigners are not allowed to own land in Thailand by law, so this means that a house or land plot title deed cannot show the foreigner’s name on it at all. It is possible however for a foreigner to own a condominium title deed outright in their foreign name as a freehold ownership.
Typically, when interested in purchasing a house or land plot, a foreigner has three options available:
- Purchasing the property through a Thai limited company.
- A 30-year leasehold
- Put the title deed in a Thai spouse’s, or Thai family member’s name
Purchasing the property through a Thai limited company.
This method of ownership has been the most popular with foreigners who have been seeking a legal way to control their property purchase, rather than transfer into their Thai partner, or a Thai family member’s name. In this instance, the foreigner can allocate themselves directorship shares which can give them full power of attorney relating to any matters associated with the property. The company director has full signatory status over the remaining shareholders. Thai law does require that a minimum of 51% of the shares in the Thai company be held by Thai shareholders, and the number of Thai shareholders needed can depend on the overall percentage split and the number of foreigners wishing to be part of the Thai company. The exact minimum and maximum share allocation allowed by the foreign director has changed over the years, so it is advisable to seek legal advice.
This ownership method also allows the foreigner to include their shares into a “last will and testament” so that their heirs can inherit these shares from them.
A 30-year leasehold
This is a far more complex route of ownership as there are many factors to consider. The maximum lease period for property in Thailand is only 30 years, however it is possible to include an additional 30 year extension at the time of registering the lease at the local land department. There is a cost to registering the lease, and there is also a stamp duty charge to pay. This figure is calculated on a percentage of projected rental income forecast to be due over the whole lease period. This needs to be done to make the lease enforceable.
Problems can arise when trying to sell the property in the future as the lease agreement will still remain in effect, so only the remaining years of the lease can be sold, and it also requires the lessor’s consent to be able to do this. This is also true of renting, or subleasing the property to anyone.
At the end of the lease period, the lessor remains full owner of the property and the lessee must vacate the property. It is also not possible to include any lease agreement into a “last will and testament” so unfortunately should the lessee die, the leasehold agreement terminates at that time and the lessor becomes the rightful owner.
Put the title deed in a Thai spouse’s, or Thai family member’s name
Should a foreigner have a Thai partner, or Thai family then they can choose to simply transfer the land title deed into their Thai name. This gives that particular Thai person full ownership rights to the property.
If the property is going to be transferred to a foreigner’s Thai spouse, then the Thai person will have to be able to prove that the money to purchase the property is theirs only. They will either have to produce bank statements to show their ability to have purchased the property before marriage, or the foreign spouse can sign documents in front of an officer at the land department, stating that the money being used to buy the property belongs to their Thai spouse and that they shall have no claim to the property in the future.
It is possible to own a condominium outright in foreign name ownership
Condominium units can be purchased by foreigners and be owned in freehold foreign ownership, to a maximum quota of 49% of the available sellable/living space of the condominium building. Should this percentage already be reached then foreign ownership is no longer an option and other methods need to be considered. To qualify for foreign ownership the foreigner must be able to prove that the money to purchase the property has been transferred into Thailand in a foreign currency. When the foreign currency gets exchanged into Thai Baht a document is produced by the receiving bank which is required as part of the documentation at the land department.
Any further questions can be answered by one of our experienced agents here at Cornerstone Real Estate. You can get in touch via email [email protected] or call us on +66 38 411 250