Are you looking for both a great investment and a paradise that you can call your “own”? Then you might want to consider buying land in Thailand! But is it possible? In this blog, we’ll dig into the laws and regulations of Thailand to reveal the legal requirements and procedures for acquiring land in Thailand!
So get your pen, ready your documents, and let’s dive in!
OVERVIEW OF THAI PROPERTY LAWS AND REGULATIONS FOR FOREIGN BUYERS
If you’re looking to purchase land in Thailand, there are a few things you should know. The Land Code Act and Thai land laws only allow Thai nationals to own land or have a confirmed right of possession of the land. Unfortunately, foreigners are generally not allowed to own land, unless there’s a treaty or exemption that specifically allows it (section 86).
Currently, Thailand doesn’t have any treaties in place that would allow foreigners to acquire land. If a foreigner violates these restrictions, they could face a fine or even imprisonment for up to two years (Land Code act section 111). However, there is an exception to this rule: foreigners who qualify under section 96 bis of the Land Code Act can own up to 1600 square meters of land for residential purposes in specified areas.
If you’re hoping to take advantage of this exemption, there are a few requirements you’ll need to meet. Firstly, you’ll need to make an investment of at least 40 million Baht in BOI-approved Thai bonds and assets that benefit the Thai economy. Additionally, you’ll need to obtain approval from the Minister of Interior.
It’s worth noting that even if you are granted foreign land ownership under section 96 bis, it’s limited to your lifetime and cannot be transferred or inherited. As a result, permission for foreign land ownership under this exemption is rarely granted or applied for.
OPTIONS TO BUY LAND IN THAILAND
🟦 Company use
A Thai corporation with at least 51% Thai shares can own land in Thailand for a foreigner. Thai Limited Companies and Thai Partnerships can do this. Thai Limited Companies are most widespread in Thailand. For each work permit, a corporation must invest two million baht.
🟦 Board of Investment (BOI)
Foreigners who invest at least one million Baht in Thailand with no minimum duration can buy up to 20 Rai of land for staff housing. Just 10 Rai for company executives and directors. However, the Board of Investment will decide if your company can own up to 10 or 20 Rai according on its size and activity. Land brought must be in the same area as the company. The Board of Investment may allow the applying company to own land up to 5 rai if it will be used for an activity advocated by the Board. The property must be owned by a multinational corporation and related to the activity requested. Remember that the Ministry of Interior must approve any such grant.
🟦 Married to a Thai national
Foreigners with Thai spouses could lawfully own land in Thailand after the 1999 property law change. The Thai national must register the land with the land office in his name. The foreigner should also sign a declaration confirming the Thai National purchased the land with their finances.
🟦 Leasing property
Foreigners can lease land. The Thai national leases the land or residence to the foreigner. Thai property law allows a 30-year lease with a renewal option if the lessor agrees. Contract renewal periods are ineffective and unenforceable. This is the easiest way for foreigners to use land. The Land Department must register a three-year land lease to make it legitimate.
🟦 Ownership structure
A firm or the Thai partner of a foreigner can grant a Right of Superficies, allowing the foreigner to possess all projects on the land. This allows a foreigner to own a house without land. 30 years of the Right of Superficies can be granted and renewed (but not automatically). The Land Officer at each Land Office decides whether to register a surface.
ADVANTAGES OF BUYING LAND IN THAILAND
Real estate investing is sensible, but finding the perfect market can be difficult. Yet, Thailand stands out with its favorable laws and regulations, cost-effective investment possibilities, a vast range of properties, capital gains potential, and growing tourism industry.
🟩 Legislation
Foreigners can buy land in Thailand under specific conditions, making it easier for investors. This gives it an advantage over other countries and makes the process easy.
🟩 Cost-effective
Land prices in Thailand are low, making investing there cost-effective. Investors can enhance returns and profit from this.
🟩 Variety
Buyers can choose from beachfront land to city center plots in Thailand, making it easy to pick a place that meets their demands.
🟩 Profit
Thailand’s fast economic growth also favors capital gains. Long-term investors might anticipate their homes to appreciate.
🟩 Tourism
Finally, with millions of tourists visiting Thailand each year, short-term rentals and vacation houses offer investors passive income. Thailand’s tourism industry provides year-round income, making it a good investment choice.
You can also click here to reveal the complete list of why foreigners love Thailand.
DISADVANTAGES OF BUYING LAND IN THAILAND
🟥 Risks associated with using a Thai nominee
Using a Thai nominee is a potentially problematic approach for foreigners to acquire real estate in Thailand. As the foreigner has no legal protection under this arrangement, the nominee could potentially sell the land or take possession of it without the foreigner’s knowledge or permission.
🟥 Conflicting claims to ownership
Understanding the ins and outs of Thai property law can be a challenge for non-Thais looking to purchase or establish land ownership. Further complicating matters is the possibility that the seller is engaging in some form of fraud or misrepresentation, which would make it impossible to verify who actually owns the property in question.
🟥 Issues in securing funding
For foreigners, it might be challenging to secure finance for the purchase of Thai real estate. Interest rates and required deposits from non-Thai customers at Thai banks are often greater than those applied to Thai nationals. Because of this, it may be difficult for an outsider to raise the money required to buy land.
🟥 Cultural and linguistic differences
It might be challenging for non-Thais to buy land in Thailand because of the legal and administrative procedures that must be gone through. However, this often results in confusion, delays, and costly mistakes.
STEPS TO BUY LAND IN THAILAND AS A FOREIGN BUYER
Thailand is lovely and offers many investment options, but foreigners must understand land ownership restrictions. Foreign buyers of Thai land must follow these requirements.
🟨 Locate a good lawyer or realtor.
Select a trustworthy real estate agent or lawyer who understands local legislation. They can advise you on property kinds, foreign buyer rules, and hazards.
🟨 Observe the area.
Before committing or paying, research the property’s ownership history. This prevents legal difficulties. Check the property’s permits and debts.
🟨 Non-immigrant visa.
Thai land requires a non-immigrant visa. This visa allows you to work and buy property in the country. Thai embassies and consulates abroad can provide non-immigrant visas.
🟨 Thai bank account.
To buy land, you’ll need a Thai bank account. This aids land title transfer. Your passport, non-immigrant visa, and address are required to open a bank account.
🟨 Land survey
To verify property borders, get a land survey from the seller or a qualified surveyor. This prevents property encroachments and neighbor disputes.
🟨 Sign a contract.
After due diligence, you can execute a purchase agreement with the seller. This agreement should specify the purchase price, deposit, and closing date.
🟨 Change ownership
Transferring property ownership requires signing the purchase agreement and paying fees and taxes. You’ll own the land after the seller transfers the title to you.
THINGS TO CONSIDER WHEN CHOOSING AND FINDING LAND IN THAILAND
There are a number of details to keep in mind if you plan to buy land in Thailand. Key considerations include the following:
🟪 Location
It’s really important where the land is located. Think about things like access to services, public transit, and expansion opportunities. It’s also crucial to do your homework and learn about the area’s history of natural catastrophes like flooding to know if it’s safe to live there.
🟪 Land use
Verify if the property is fit for the intended use. Building height and type restrictions, as well as commercial and residential zoning, may apply in some locations.
🟪 Land title
Verify the property’s title is free and clear so it can be sold. In Thailand, there are several land titles, some of which are more reputable than others. To avoid fraud and problems, it’s best to work with an experienced attorney or real estate agent.
🟪 Infrastructure
Inquire as to the availability of utilities and services such as water, power, and sewage on the property. If not, increase your budget for setting up these features.
🟪 Cost
Prices for land in Thailand can range greatly depending on aspects including location, size, and other amenities. Establishing and maintaining a budget is essential, as is includes extra expenses like those for legal assistance, taxes, and infrastructure upgrades.
🟪 Cultural and language differences
Thailand has its own culture and language, both of which must be taken into account and respected while dealing with the country’s real estate industry. If there are language or cultural barriers, hiring a real estate agent or lawyer from the area will assist smooth the way for a successful transaction.
IS BUYING A LAND IN THAILAND WORTH IT?
Investing in Thai real estate depends on numerous things.
First, consider your property goals. You can buy land in Thailand if you want to start a business or build a house. But renting may be better for a retirement or vacation house only.
Property location is also important. Thailand is large and diverse, thus each region has pros and cons. If you want a seaside home, invest in southern Thailand land. If you prefer to live near cultural monuments like museums, buying property in the center of the country may be better.
Investing in Thai real estate can be rewarding if you do your research and consult with experts. Hence, before deciding, it’s important to assess the pros and cons.
FREQUENTLY ASKED QUESTIONS
Q: Can I own a condominium unit in Thailand as a foreigner?
A: Condominium ownership is permitted for foreigners in Thailand, provided that foreigners do not account for more than 49% of the total floor area of all units in the condominium structure.
Q: Do I need a lawyer to buy land in Thailand as a foreigner?
A: To protect your rights and ensure that you meet all the necessary standards, it is strongly suggested that you retain the services of a lawyer who focuses on Thai property law.
Q: What taxes and fees do I need to pay when buying land property in Thailand?
A: The transfer fee is 2% of the property’s registered value, and the stamp duty is 0.5% of the property’s registered value. Additional charges, such as a corporate income tax and a specialized business tax, may be incurred if the purchaser is a corporation.
Q: What happens to my land property in Thailand if I pass away?
A: When someone dies in Thailand without leaving a will, their land will be given in accordance with Thai law, which may not be in accordance with their preferences. You should draft a will and get it registered with the Thai government to guarantee that your assets will be dispersed as you specify after your death.
FINAL WORDS
Buying land in Thailand can be an interesting investment opportunity; however, it is vital to understand the legal and cultural distinctions that come with purchasing property in a foreign country.
Because of its one-of-a-kind and diversified culture, as well as its breathtaking natural beauty and expanding economy, Thailand is a desirable site for potential investors to consider. To ensure that the purchasing process goes smoothly and without any legal hiccups, it is essential to conduct thorough research and collaborate with a local attorney and real estate agent who have a solid reputation in the community.
Remember, owning property in this breathtaking and dynamic country has the potential to be an excellent long-term investment provided you give it adequate thought and make the necessary preparations.