Guide to buying property in Thailand

Property ownership options open to foreign nationals in Thailand

Foreigners cannot buy land in Thailand, but they can buy condominiums on a freehold basis. However, foreigners cannot make up more than 49% of the total unit owners in a condominium building.

If you want to buy a house or a villa in Thailand, you may be able to do so by setting up a private limited company with mixed Thai and foreign ownership, and using the company to buy the property on your behalf. However, this option requires legal advice and may involve some risks. Another option for foreigners is to enter into a long term leasehold/rental agreement.

The process of buying a property in Thailand

The process involves searching for properties online or through an estate agent, appointing a real estate lawyer, making an offer and negotiating the price, conducting due diligence checks, paying the deposit and signing the contract, transferring the funds and registering the property.

The cost of property in Thailand

The cost of property ownership of course varies depending on the location, size, type and condition of the property. However, you can expect to pay lower prices than in many other countries, especially in rural areas and less popular tourist destinations.

Property taxes in Thailand

The property tax in Thailand is relatively low compared to other countries. There is a transfer fee of 2% of the appraised value of the property, a stamp duty of 0.5% of the appraised value or the sale price (whichever is higher), and a withholding tax of 1% of the appraised value or the sale price (whichever is higher) for individuals, or 3% for companies.

Leasehold structures as a way to acquire property rights

A leasehold is a type of property ownership that allows a foreigner to rent a land or a building from a Thai owner for a maximum of 30 years, with the possibility of renewing the lease for another 30 years, up to a total of 90 years. However, the renewal of the lease is not guaranteed by law, and depends on the agreement between the lessee and the lessor.

A leasehold is different from a freehold, which is the full ownership of the property and the land it is built on. A leasehold is one of the options for foreigners who want to buy a house or a villa in Thailand, but do not want to set up a Thai company to do so.

A leasehold contract should be registered at the Land Office, and should include the terms and conditions of the lease, such as the rent, the duration, the renewal options, the subletting rights, and the inheritance rights.

A leasehold can be a safe and convenient way to own a property in Thailand, as long as the lessee does proper due diligence checks, hires a reputable real estate lawyer, and negotiates a fair and clear lease agreement with the lessor. A leasehold can also be sold or transferred to another buyer, subject to the approval of the lessor.

A leasehold is a type of property ownership that allows you to rent a land or a building from the owner for a fixed period of time, usually 30 years in Thailand. There are some advantages and disadvantages of going through the leasehold system in Thailand. Here are some of them:

Advantages of Leasehold:

  • You can access more types of property and locations that are not available for freehold ownership by foreigners, such as land, houses, villas, and beachfront properties.
  • You do not have to set up a Thai company or deal with the legal and tax complications that come with it.
  • You have exclusive possession and usage rights of the property, and you can sublet it or pass it down to your heirs, as long as you specify these terms in the lease agreement.
  • You have lower maintenance and preservation costs, as the landlord is also responsible for some of them according to the lease agreement.
  • You can sell or transfer your leasehold rights to another buyer, subject to the approval of the landlord.

Disadvantages of Leasehold:

  • The lease term is limited to 30 years by law, and the renewal options are not guaranteed. You may lose your property rights after the lease expires, unless you have a buy-back clause in the agreement.
  • The transfer and inheritance laws are not clear-cut and may vary depending on the case. You may face legal challenges or disputes with the landlord or the authorities.
  • The leasehold value may depreciate over time, as the remaining lease term decreases. You may also have to pay higher fees or taxes when renewing or transferring the lease.
  • The lease agreement may contain unfavorable or restrictive terms and conditions, such as rent increases, termination clauses, or limitations on subletting or modifying the property.

Can You Use a Thai Spouse to Buy Land in Thailand?

The short answer is no, you cannot use your Thai spouse to buy land in Thailand. There are some legal and practical issues that you need to be aware of before you attempt to do so.

Firstly, foreigners are not allowed to own land in Thailand, even if they are married to a Thai national. The only exception is if they inherit the land as a lawful heir, but they have to sell it within one year of the acquisition. Therefore, if you want to buy land in Thailand, you cannot register it under your name or co-own it with your Thai spouse.

Secondly, if your Thai spouse buys land in Thailand, they have to prove that the money used to purchase the land is their personal property, and not common property between the two of you. This means that they have to sign a letter of confirmation stating that the land is not a marital asset and that you have no claim to it. This letter has to be submitted to the Land Department when registering the ownership of the land.

Thirdly, if you agree to let your Thai spouse buy land in Thailand with their personal property, you have to be aware of the risks involved. For example, you have no legal rights to the land, and your Thai spouse can sell, mortgage, transfer, or exchange it without your consent. If you divorce, the land will be considered the separate property of your Thai spouse, and you may not be entitled to any compensation or share of it. If you try to claim that the money used to buy the land was yours, you may face criminal charges for filing false statements with a government official.

Therefore, using your Thai spouse to buy land in Thailand is not a recommended option for foreigners who want to own property in Thailand. There are other alternatives that you can explore, such as buying a condominium unit, leasing land, or setting up a Thai company to buy land on your behalf. However, each of these options has its own advantages and disadvantages, and you should consult a reputable real estate lawyer before making any decisions.