A Guide to Buying Property in Thailand

Buying property in Thailand may at times seem like a daunting process. Of course, with the right help, it's actually quite simple! Here are a few of the key factors you'll need to consider when making a property purchase in Thailand. Of course, this is just a general guide - Asian Property Markets recommends you speak to your lawyer or to us directly should you have any specific concerns about the buying process.

Legal Advice

Generally, the first step in the property buying process will be to appoint a good lawyer with experience in land/property transactions. Asian Property Markets has excellent relations with a number of legal firms and will be happy to recommend the right law firm for you depending on your purchase requirements and location.

 

Your law firm will carry out the necessary checks on the land or property in Thailand and complete the legal requirements prior to completion of the purchase. These may include: checking for accuracy of existing property titles, ensuring that any charges and liabilities still owed on the property are properly disclosed, ensuring that the contract is accurate and legally-binding, assisting with payment and funds transfer and, of course, ensuring that the property is properly registered under your name.

Different Methods of Owning Thai Property

The type of property you wish to invest in, and the way in which the seller has structured the prospective sale, will dictate which options are available to you when purchasing a Thai property. The following methods are generally open to foreigners buying a property in Thailand:

• condominium foreign freehold
• long leasehold with renewal periods of 30 years each to a maximum of 90 years
• collective ownership leasehold schemes where a companies board of directors share indirectly the freehold interest through corporate management structures
• through investment into Thai companies (specific advice should be sought as to the qualifying criteria for such a form of investment)

Condominium Title

This is the most straightforward property acquisition for foreign nationals. The Condominium Act allows up to (but not exceeding) 49% of a condominium development to be acquired as ‘direct freehold’ title by foreigners. The rules governing this acquisition method are very specific and dictate that funds should be remitted from overseas and that a Foreign Exchange Transaction form is obtained from a Thai bank, to register the purpose of the monies.

 

When buying from a development, the buyer should ensure that their unit lies within the 49% direct freehold portion. It is still possible to obtain freehold title outside of the allotted 49%, however, this must be undertaken by using a Thai legal company, in which you as an individual, or through a non-Thai juristic entity, have controlling interest

Leasing

Whilst freehold ownership of land in Thailand is restricted, ownership of the property on that land is not. Where you are purchasing a condominium outside of the 49% direct freehold allotment, or other property type, you generally acquire the land title as leasehold, for a duration of 30 years. The leasehold contract will usually include an option to renew and extend the lease for 2 further 30 year periods. Of course, as with other methods of acquisition, this approach can be facilitated through various structures to maximise tax or probate efficiency..

Corporate Ownership

It is possible to acquire land and the house or condominium on which it stands, through a Thai limited liability company. The laws pertaining to foreign interests in a Thai legal entity dictate that there can be no more than two foreign directors, who between them can own up to, but not exceeding, 49% of the shares. Of the 7 shareholders required to formalise a limited liability company, at least 5 must be Thai nationals and between them they must possess at least 51% of the shares.

 

For individuals who wish to acquire multiple properties, or who wish to structure ownership mindful of tax liabilities outside of Thailand, it is perfectly acceptable for the foreign interest in the Thai limited company to be a juristic person, such as a BVI (British Virgin Island) company.

Managed Developments

Newer developments have a range of more imaginative ownership options. Such ownership options can include the purchase of a condominium taking a leasehold of the buildings, but with a shareholding in a company, sometimes Thai or an offshore entity, which may own and control the common areas of the development.

 

For more advice and information on purchasing property in Thailand, please do not hesitate to contact us.