Can Foreigners Buy Property in Thailand?
Thailand is a famous country with its rich culture, stunning beaches, and delicious cuisine. The country also boasts a thriving real estate market that attracts many foreigners who are interested in purchasing property in Thailand. But before deciding to invest in Thailand real estate sector, it is important to understand the regulations and restrictions for foreigners who want to purchase property in Thailand. In this article, we will try to mention couple of things that foreigners need to consider when buying property in Thailand. Don’t worry, you are not the first person asking the question of can foreigners buy property in Thailand. Let’s get into it.
Can Foreigners Buy Property in Thailand?
Yes, foreigners are allowed to purchase property in Thailand. However, it’s important to be aware of certain restrictions. One key rule is the 49/51 rule, which states that foreign individuals can only own up to 49% of the total area of a condominium building. The remaining 51% must be owned by Thai citizens. This rule applies to all types of condominiums, regardless of size or location.
If a foreigner wants to buy a house or land in Thailand, additional rules apply. Foreigners cannot own land in Thailand directly, but they can lease it for up to 30 years. The lease can be renewed for additional 30-year periods, as long as both parties agree and document it in a legal contract.
Another option for foreigners who want to own land in Thailand is to set up a Thai company with Thai majority shareholders. This is a common way for foreigners to purchase property in Thailand. Although there are some costs involved in setting up a company, they are not significant. It is highly recommended to hire a lawyer to assist with this process, as they will be familiar with the subject and guide you throughout.
What Types of Properties Can Foreigners Buy in Thailand?
Foreigners can buy a wide range of properties in Thailand, including condos, apartments, and houses. However, not all properties are available for purchase by foreigners. Some properties may be designated for Thai citizens only, while others may have restrictions based on factors such as work permits or retirement visas.
Technically, foreigners can only purchase Foreign Freehold condominium units 100% under their names. This means they don’t need to set up a Thai company or involve a Thai person. For any other type of property purchase, foreigners will need to either set up a Thai Company and buy the property through it or involve a Thai person in the process. Another option for foreigners is purchasing a property via Leasehold title.
When looking to buy property in Thailand, it’s important to work with a reputable real estate agent who can help navigate the legal requirements and find properties available to foreigners.
What are the Ownership Types in Thailand?
Thai Freehold
Thai freehold ownership allows Thai citizens and Thai companies to own property outright, with full control over the land and buildings. If a foreigner wants to purchase a property with Thai Freehold title, they need to set up a Thai Limited Company and can own up to 49% of the shareholder and purchase the property through this company.
Foreign Freehold
Foreign freehold ownership is available to non-Thai citizens and allows them to own property outright without the need for a lease or Thai company involvement. Foreigners can obtain foreign freehold ownership by purchasing a condominium unit. They can own up to 49% of the total area of the condo building, along with a share of the common areas and facilities.
Leasehold
Leasehold ownership in Thailand is a type of property ownership that allows a person to lease land or property for a specified period of time, typically up to 30 years. This type of ownership is available to both Thai citizens and foreigners and is a common option for those who want to invest in Thai property but do not qualify for freehold ownership.
Under a leasehold agreement, the lessee has the right to use and occupy the property for the duration of the lease term, subject to the terms and conditions of the lease agreement. The lessee also has the right to sublease the property to others, subject to the landlord’s approval.
One of the advantages of leasehold ownership in Thailand is that it is a more straightforward process than freehold ownership. There are fewer legal and financial requirements. Leasehold agreements are typically written in both Thai and English. They are registered with the Land Office to ensure their validity and enforceability.
However, there are some potential disadvantages to leasehold ownership. One is that the lessee does not have full ownership rights to the property. It is subject to the terms of the lease agreement, which can limit their use and development of the property. Additionally, leasehold agreements typically have a fixed term, after which the property reverts back to the landlord, unless the lease is renewed or renegotiated.
Protected Leasehold
Protected Leasehold is a rather new term describing an ownership of a property via BVI (British Virgin Islands) or any other off-shore company. In this type of ownership, a project is completely own by a BVI company. Each unit/property owner in this project has a share in the company. Therefore each owner can lease the units/properties to their name and extend the term when it expires.
This is not very common way of owning a property in Thailand but there are still some projects are using this method. It is best to consult to a lawyer or get a better understanding about this route before committing.
You can find an detailed information about Freehold and Leasehold Property Ownership in Thailand from the link.
How to Buy Property in Thailand as a Foreigner?
If you’re a foreigner and asking yourself can foreigners buy property in Thailand, then follow these steps:
- Obtain a Thai Bank Account: Before purchasing property, open a Thai bank account to facilitate funds transfer and payment of associated fees.
- Find a Property: Work with a reputable real estate agent to find a property that meets your needs and budget.
- Make an Offer: Once you’ve found a property of interest, make an offer to the seller, typically involving a deposit not exceeding 10% of the purchase price.
- Hire a Lawyer: To ensure a smooth purchase process and compliance with legal requirements, engage a lawyer specializing in property law in Thailand.
- Complete the Purchase: Once all legal requirements are met, finalize the purchase and take ownership of the property.
What Are the Costs of Buying Property in Thailand?
When you buy property in Thailand, there are several costs to consider in addition to the purchase price. These can include:
- Transfer fees: These are fees that are paid to the Land Department for transferring ownership of the property.
- Stamp duty: This is a tax that is levied on the sale of the property. It is based on the purchase price.
- Legal fees: These are fees charged by your lawyer for handling the legal aspects of the purchase.
- Taxes: There will be some tax involved when you purchase a property in Thailand. The percentage of this tax can be vary depending on the title deed of the property.
