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Welcoming, different, friendly, sunny warm, relaxing… Once you stepped on Thai ground and spent a little time around, you will very soon be enchanted by the quality of life the ‘Land of Smiles’ can offer. Strolling down touristy or less touristy areas, beaches, animated streets, hills, you will be amazed by the luxury villas, hill-top houses and their verdant gardens or condos with astonishing views over the ocean. Curiosity is taken so far that it is very more than probable that if you pass by a real estate agency you will take a look and collect a few information on such properties.
Thailand being for a decade or so a very good opportunity for real estate investment, the curiosity can quickly become interest that you will turn into a great project.
Whether you want to buy for your retirement, as a second home or for investment purposes, you will come with a lot of questions and will have to know the rules and laws governing the Thai real estate market.
Now you made up your mind and this idea grew stronger and stronger in your mind, you need to know the process you need to go through to fulfill your dream of being a real estate owner in Thailand. If the when the what and the where are up to you and only you, the how will involve some understanding and knowledge about the rules for foreigners to buy a property. This will involve various factors to take into consideration before.
What are the different options to own property in Thailand?
Buying options are pretty simple. You can choose to invest in a condominium, a house or a piece of land. This decision is up to you, but be sure to take into consideration the reason why you want to buy, the location, the type of property, the price and the legal process it implies.
Buying a Condominium
The condo market in Thailand is booming as it is what foreigners are mainly looking for. Easier, cheaper to buy and to maintain, possibility to rent it out, faster to resell… Advantages of owning a condo a numerous.
Buying a House
People choose houses or villas because they are bigger than condos, they offer more privacy and allow the owner to manage maintenance expenses. Nevertheless, owning a house or a villa requires to go through some legal structures such as Lease, Superficies (right to build upon another’s land, register a house separate from the relevant land) or Usufruct (temporary ownership right for use and enjoyment of a property).
Buying Land
As foreigners cannot own Thai land directly, this option is a little bit more complicated as it will necessitate that you start a company in which you can own 49% of the shares (this will need a financial arrangement, splitting shares between many Thai shareholders in order to control the company and the property).
Are there restrictions for foreigners to own property in Thailand?
Since 1997, Thailand has ease its laws for foreigners to own a property in the country. Some restrictions are still in place but the real estate market is like wide open to foreigners, if you know the rules and how to deal with them. Foreigners can own a condo freehold in their own name, as far as 51% of the units of the building are owned by Thais.
However, foreigners still cannot own land in Thailand directly, but they can take out in their own name a registered lease going up to 30 years, the lease being renewable indefinitely. Thus, foreigners are allowed to buy a whole building, a house or a villa, except the land on which it is built.
To sum this up, a foreign national can own in its own name:
- A unit in a condominium.
- A building without the land on which it is build.
What is a condominium?
As defined by the condominium act, a condo is a building featuring privately owned properties and common properties. The land is owned by a ‘juristic person of the condominium’.
Can a foreigner legally own a condo unit?
Foreigners are allowed to own a freehold over a condo unit. However, condominium ownership by foreigners cannot exceed 49% of the total livable space of the condominium.
Can a foreigner legally own land in Thailand?
Foreigners are not allowed to own land in Thailand in their own name. Nevertheless, there are some alternatives for foreigners to own land, such as to create a Thai Limited Company mixing Thai and foreign ownership (foreigners owning 49% of the company); invest 40 million baths for five consecutive years; buying land on the name of ‘your’ Thai spouse; usufruct.
Can a foreigner legally own a building?
Buildings are legally considered to be part of land. However, under a leasing agreement, a building can be considered as a tenant of land, thus foreigners can own a building on a rented piece of land. The important part here is to sign a leasing agreement indicating that you are the tenant of the land on which the building is. This is also the recommended option if you’re signing this contract with your Thai wife.
What are the laws regarding land lease?
Land lease contracts can run from 3 to 30 years and are renewable for the same time period. Make sure the land title deed is in your possession (the tenant) to ensure your rights.
How can a foreigner get a construction permission?
Construction permission can be obtained at the Local Administration Organization or the Municipal Office where the land is located. The construction plans must be certified by an architect.
Can a foreigner rent out his property in Thailand?
Foreigners can legally rent their properties in Thailand. Moreover, banks can allow you to open a bank account so that you can collect the rents.
Can a foreigner buy a property at his absence?
Foreigners can buy a property without being present when the registration of ownership is signed at the Land Department. A lawyer can be appointed as a power of attorney to act on your behalf.
Regarding property ownership in Thailand, as a foreigner, everything is possible. Laws are enforced but are not impeaching you to own an apartment, a villa or even a piece of land. The easiest being owning an apartment or a unit in a condo, Thai law allows you to own houses, villas and even land through legal leasing contract (up to 30 year renewable contracts) or by creating a joint venture with Thai investors.
However, if you are not an expert in the Thai real estate and the laws regulating this market, be sure to ask legal advice from a professional. Thus next time you will fly to Thailand, you will be happy to say that you are going home! away from home.