Frequently Asked Questions
As a foreigner can I buy land in Thailand in my own name?
As a foreigner you cannot own land in your name. You can purchase land in Thailand through a Thai limited company or you can lease the land for 30 years usually with a further two 30 year periods. Some companies may offer to set up a Thai limited company for you for the specific purpose of obtaining property or land under a freehold title this is only recommended if it is to be a legitimate company operating in Thailand.
How can a foreigner own property Freehold in Thailand?
A foreigner is only able to own Condominiums as 100% freehold in their name. No other type of property can be owned this way. This is possible under the Condominium act which stipulates that a development with a Thai Condominium Licence may sell 49% of the saleable area of a given building to non-Thai nationals under a Freehold title, the remaining 51% of the given building may only be Leased for a term of 30 years or sold to Thai nationals as Freehold in the case that a foreigner has a Thai Limited company they could buy a condominium in Thailand in the company name as a Thai freehold title. Note that even if the development is a condominium block unless the developer has applied for and obtained a Condominium licence they cannot sell any unit as a Freehold unit to non-Thai nationals. Some villa developments in Thailand may advertise Freehold ownership but as this is not possible under Thai law it is recommended to read the small print as to what they actually mean by this and have it verified by a lawyer.
Does owning a property Freehold or otherwise in Thailand entitle me to any special residence or long term visa?
Unfortunately, at the time of writing, owning a property Freehold or otherwise does not entitle a non-Thai nation to any special long term visa. However long term visas can be obtained in the case that you find work in Thailand or are over 55 years old in which case you may apply for a retirement visa, other visas can be obtained such as education visas etc. It is recommended that you contact the Thai embassy in your home country or in Thailand for more details.
What are the on-going costs of owning a property in Thailand?
Thailand does not have any local government tax on property such as Poll Tax in the UK. Ongoing costs for land and private villa or any property in Thailand is the general maintenance as required by the owner and utility bills. In the case that a property, either condominium or villa, is located within a private managed estate or community, along with the expected utility bills there may also be monthly, quarterly or annual maintenance fees to be paid, in most cases the rate will be calculated on the square meters of the villa or condominium unit and goes toward paying for security, gardening and general common area upkeep. In the case of a private gated community or condominium estate a Sinking fund payment may also be required, usually a one-time payment this is set aside for “unexpected maintenance” as is for use by the residents committee only of a vote basis, for example if after 15 years the residence collectively decide they would like to up-grade the fitness equipment in their estate they may vote to do so and use the money within the sinking fund to pay for such an up-grade.
What sales taxes are applicable in Thailand?
- Transfer fees: 2% of the Registered Value of the Property
- Stamp Duty: 0.5% of the Registered Value, Only payable if you are Exempt from Business Tax
- Withholding Tax: 1% of the Land Department Appraisal Value of the Property
- Business Tax: 3.3% of the Land Department Appraisal Value of the Property, payable if the property is sold within 5 years of Purchase (for Both Private & Corporate ownership), For Thai nationals if you own a property and Register the property as your residence (in the House Registration book) for a period of 1 year or more, then you will be exempt from this.
What do property costs average on a property purchase in Thailand?
For a freehold Condominium the approximate fees, taxes and transfer costs will come to around 2-3% of the property purchase price and will be considerably less for a 30 year leased property approximately 1.5% of the lease rate.
Who is responsible for property taxes as mentioned above in Thailand?
It is usual in Thailand for the buyer and seller to share the costs of the transaction 50/50 however in some cases the developer may offer to pay all taxes except the transfer fee only.
What are the costs involved in making a property purchase in Thailand?
Purchase of the property
Lawyer fees (where engaged)
Lease or freehold transfer fees (as outlined above)
Utilities / set-up (internet connection / TV subscription / Furniture, etc)
I don’t have a bank account in Thailand so how can I make payments for a property?
Usually when you buy a new property in Thailand especially a Freehold Condominium, it is preferred that you pay directly from your account in your home country directly to the developers account as to obtain a Freehold title you will need to show the local land office that the money used to buy the property has originated from outside of Thailand this is provided by a Foreign Transaction Form (FTF) which is issued by the developers/Thai bank upon arriving in Thailand in the case that the transferred amount is 20,000 USD or over, these FTFs need to be kept and presented at the land office upon transfer of the title deed. It is very easy to open a bank account in Thailand and it is possible to pay for a property, even a Freehold property, from a Thai bank account after transferring money from abroad to your Thai bank account, again in the case for a Freehold condominium be prepared to provide evidence (FTFs) at the local land office to show that the money originated (before in came to your Thai account) from outside of Thailand. For leased property you are not required to provide such documentation.
Can I sell my Thai property in the future?
Of course it is possible to sell your property in the future, even leasehold property can be resold, in the case that a freehold property is resold and you would like to take the money back out of Thailand you will need the Foreign Transaction forms (see above) to show to the bank that the money used to buy the property originally came from outside Thailand and then upon transferring the money back out of Thailand you will only be taxed on any profit you have made from the resale of the property and not on the total amount.
Property Laws and Frequently Asked Questions
Detailed below are the most commonly asked questions and answers we received from our clients. If you cannot find an answer to your particular question, please feel free to contact us:
Can I Own a Condominium in Thailand?
Buying a condominium is perhaps the simplest and easiest option available to foreigners. Purchases of condominiums by foreign individuals come under the jurisdiction of the Condominium Act B.E. 2535 (1992).
Condominiums can be owned by foreigners in their own names provided that the total number of foreign held units does not exceed 49% of the total number of units in the condominium block.
The funds to purchase the condominium, should be remitted from abroad in foreign currency to a bank in Thailand, (in the name that is to be registered on the title deed), with the remark 'to purchase a condominium’, and the relevant form (Thor Tor Sam) can then be obtained from the said named bank.
The owner of each condominium is issued with a certificate of unit ownership. The certificate also has a statement saying exactly what percentage of rights over the common areas of the building each owner has. BACK TO TOP
Can I Own Land and House in Thailand?
Ownership of land is governed by the Land Code BE 2497 (1954), the Civil and Commercial Code, Land Reform for Agriculture Act BE 2518 (1975) and the regulations set forth by the Ministry of the Interior.
Although you are able to own a house or structure in your own name, Thai law currently prohibits foreigners from owning the land the building is erected on.
However there are a number of ways in which you can structure the purchase to own and invest in land:
· Become a Thai resident or citizen
· Be the principal investor in a new export orientated Board of Investment (BOI) approved company [the current maximum size limit of freehold ownership rights is one Rai of land (1600 Sqm.)]
· Make an approved investment of over 40 Million Baht left for a minimum number of years [the current maximum size limit of freehold ownership rights is one Rai of land (1600 Sqm.)]
· Invest in a Thai private limited company. This involves the incorporation of a private limited company of which the foreigner holds 49% of the shares. The remaining 51% of the shares is held by Thai Nationals
· 30 year lease with options, acquire the leasehold interest in land in the name of the foreigner. This can be done via a registered 30 year lease (residential) to the foreigner in the foreigner’s own name with pre-paid options to contractually renew for a further two periods of 30 years each. The foreigner may also be given the option to purchase the land should the law in respect of foreigner’s land ownership rights change. Under Thai law, the foreigner can own the structure (for example a house) erected on the land. In order to be enforceable, any lease for a period of longer than three years must be registered, which involves payment of a registration fee and stamp duty based on a percentage of the rental fee for the whole lease term. The original registered lease remains in force and effect even if the property is sold.
In practice, the method most commonly used by foreigners is to invest in a Thai private limited company which owns or intends to acquire freehold land. The Articles of Association can be varied to allow greater protection for foreign minority shareholders where majority Thai ownership is required under the Alien Business Law.
Thai law requires that 51% of the shares be held by Thai juristic persons, however, any company with more than 40% foreign interest that purchases land may be investigated by the Central Land Office in Bangkok (under Section 74 of the Land Code) to ensure that the company has not been organized in an attempt to circumvent the prohibition against foreign ownership of land. This results in the foreign ownership of the company being limited at 39%, but with the recommended changes to the Articles of Association, the foreigner can be the only director of the company, and the only officer of the company who can commit or bind the company in any contractual dealings - effectively giving the minority shareholder control over the company. The company is required to submit an annual balance sheet once per year, and there will be a tax obligation, however the costs are minimal and your lawyer will have an accounting department able to assist you with the above.
What is a Thor Tor Sam (3)?
A Thor Tor Sam (3) is an official bank document issued by the receiving bank upon the receipt of foreign currency into your bank account in Thailand.
You must request a Thor Tor Sam from your bank when you are remitting funds to Thailand for the purpose of purchasing a condominium, and the Thor Tor Sam must specify that the remittance is solely for the purpose of purchasing a property - Code 5.22.
Do they have Title Deeds in Thailand?
Yes it is called Chanote, "Nor Sor 4 Jot" and is the only document which can be described a land title deed, because it alone confirms ownership of land. The land is accurately surveyed and its area and boundaries are set using GPS. There is no need to publicize any legal acts, and it is possible to partition (divide) the land into smaller plots.
For areas which are not surveyed, there are other documents for land possession such as evidence of the possession of the right to utilize the land or other interests in the land.
These documents are called "Nor Sor Sam (3) and Nor Sor Sam (3) Kor". Unlike the Title Deeds, these Nor Sor documents are issued to show the possessors' exploitation of the land. Though these documents do not provide ownership rights, as do Title deeds, they can still be registered for transfer of the lands for which they are issued.
My Wife is a Thai National, Can She Own Land?
Prior to 1998, any Thai woman who married a foreigner would lose her right to purchase land in Thailand. She could, however, still retain land that she owned prior to marrying the foreigner. However, the recent (1999) Ministerial regulation now allows Thai national's married to foreigners the right to purchase land, but the Thai spouse must prove that the money used in the purchase of freehold land is legally solely theirs with no foreign claim to it. This is usually achieved by the foreign spouse signing a declaration stating that the funds used for the purchase of property belonged to the Thai spouse prior to the marriage and is beyond his claim.
What Taxes and Costs are Applicable to Purchasing Property in Thailand?
Whenever a property in Thailand is bought and sold, there are four taxes that need to be taken into account.
1. Land registration (transfer fee) of 2.0% of assessed value of the land.
2. Stamp Duty/Fee of 0.5% of the assessed value or the sale price - whichever is higher.
3. Specific Business Tax of 3.3% of the assessed value or the sale price - whichever is higher - this will be applied to all sales by companies and to any private sales that occur within 5 years of the date of purchase.
4. Income Tax - this is calculated on a very complex formula based on the assessed value of the property, the length of time owned and the applicable personal income tax rate. In practice, this will work out to under 2% of the price for low to medium value properties, and up to 3% for higher value properties.
The local system of taxing property is based on an arbitrary assessed value as determined by the local Land Department, rather than true market value price. There are no set rules as to who pays for which taxes, and it is just another part of the bargaining process for purchasing property in Thailand.
Service Charges for Condominium?
Service charges here in Thailand are extremely low, this is to maintain the common areas of the building, i.e. lifts, pools and corridors. A small % is deducted for the sinking fund that covers any major external repairs; therefore there are no hidden costs once you have purchased your condo.
Can I obtain a mortgage loan?
Foreigners generally cannot obtain a mortgage for properties in Thailand, however, most of the financial institutions in Thailand provide loans for real estate purchasing to Thais and Thai companies.
It is common for a real estate developer to arrange for his customers to have a financing package from a financial institution. In most real estate development projects, a down payment can be made in installments from 10 to 24 months.
After the down payment has been paid, the sale contract will be made and the balance amount is paid through the loan which is financed from a financial institution. The financial institution requires you to mortgage the property with it as collateral against the loan.
Are There Property Taxes in Thailand?
There are no property taxes as such in Thailand that are exactly equivalent to the property taxes in the west, however, the most comparable taxes on properties in Thailand are the Land Tax and the Structures Usage Tax. The Land Tax levied on land is so miniscule, that in practice the body charged to collect it, rarely bothers to do so, and if they do, they usually wait several years until the amount accumulates. The second tax, the Structures Usage Tax, relates to buildings, is collected by the municipal office or district office, and is only applied to properties used for commercial purpose.
Units of land measurement.
Land is measured in Rai – Ngan – Talang Wah (Tw2)
1 Rai = 1600 square meters (1 Rai = 4 ngan or 400 Tw2)
1 Ngan = 400 square meters (1 ngan = 100 Tw2)
1 Talang Wah = 4 square meters
Owning Property in Thailand?
The property ownership laws of Thailand are somewhat nationalistic, whereby foreign individuals can legitimately secure property only in certain ways. The main issue is real estate, but similar laws cover other items. If you are not legally established in Thailand and following procedures, then you will take risks.
Foreigners can buy some things outright. Other things must be leased or bought properly. The most common methods of properly securing property are:
- Be the largest shareholder of a domestic company, and have the company own the property (see details below, as you will own less than 50%, usually 39%); or
- Sign a 30-year (or less) lease with a domestic company or Thai individual, with an automatic option to renew for another 30 years. This is called the 2x30 ("two times 30") way.
Foreign Ownership of Real Estate in Thailand?
- A foreigner can own a condominum as long as less than 49% of the condos or apartments in the building are owned by foreigners.
- A company can own property such as land and a house (and hence the foreigner can buy land and a house via their company) as long as no one foreigner owns more than 49% of the company (recently amended from 39%) and total foreign ownership of the company does not exceed 49%.
- The Thai wife of a foreigner can own property (a recently changed legal status due to gender equality in the new 1997 constitution revision), in her name only. This is fine as long as you don't have marital problems. (The same, of course, goes for a Thai husband, but the law was changed recently for Thai wives due to the new constitution guaranteeing equal rights.)
- A foreigner can lease land for 30 years, with an option for another 30 years, according to articles in the press and as confirmed by every lawyer I've asked. (If you live longer than 2x30 years, consider yourself lucky in another regard.) This is referred to as the 2x30 ("two times 30") option.
Owning a Condominium in Thailand?
Owning a Condominium in Thailand?
Foreigners are allowed to purchase Condominiums in Thailand. Buying a condominium is the simplest and most popular form of purchase by a foreigner in Thailand. Under Thai law, 49% of the internal area of a condo building development excluding common ares, can be assigned to be owned by foreigners.
In order to make the purchase of a condominium, foreigners are required to transfer funds from overseas with funds denominated in foreign currency. Once the funds are transferred, they are required to be marked as a condominium purchase.
It needs to be verified through obtaining an FET – Foreign Exchange Transfer or what is known as a Tor Tor Sam document from the receiving bank in Thailand. The FET document is required when transferring the Title Deed at The Lands Department. The purchaser is then issued with a certificate of ownership.
Owning Property With Land(House, Villa) or Plot Land in Thailand?
Ownership of land is governed by the Land Code BE 2497 (1954) Thailand Civil & Commercial Code, Land Reform for Agriculture Act BE 2518 ( 1975 ) and the regulations set forth by the Thailand Ministry of The Interior. Although Thai Law prohibits foreigners from owning land in Thailand, there are various ways in which you can structure and establish a controlling interest in a Thai Company that owns the land or owns a lease for the land in your own name, all complying with existing Thai Law. Long term leases of land are the most common way to purchase a house and land in Thailand for foreigners today. A foreigners lease rights are formally recognized by the Thai Law.
The land lease is executed and registered once, after which very little legal maintenance is required. You can have a 30 year lease which is registered at the Land Office; with a prepaid option to renew for a further two periods of 30 years each.
The foreigner may also be given the option to purchase the land should the law in respect of foreign ownership of land change in the future. In order to be enforceable, any lease for a period of longer than three years must be registered, which involves payment of a registration fee and stamp duty based on a percentage of the rental fee for the whole lease term.
Can foreigners own buildings even if they don't own the land?
YES. Although Thai law prohibits foreigners from owning land in Thailand, foreigners have the right to own buildings. A common structure is for the foreigner to enter into a long-term lease for the land from a Thai company or individual, and to build the home which the foreigner owns.
Can I buy property in Thailand while out of the country?
Yes. A person wishing to buy property, including a foreigner, may purchase a property without being present at the time of registration of ownership at the Land Department. This shall be done by appointing, by a power of attorney, a lawyer or some other person to act on your behalf.
Are foreigners allowed to own land in Thailand?
Under strict application of the existing law it is officially prohibited for foreigners, including both individuals and juristic entities (e.g., companies or partnerships), to own land in Thailand. However, there are exceptions to the prohibition found in the law itself. There are also other methods of arranging for the purchase of land in Thailand.
The Land Code has been amended to allow foreigners to own land if all of the following requirements are met:
- The land is for residential purposes.
- The land does not exceed one rai (in area; see conversion to western units below).
- No less than 40 million baht is remitted into Thailand for investment.
- Foreigners abide by Ministerial Regulations governing the nature of the business that the foreigner will engage in, the period of time for maintenance of the investment, and the location of the land owned.
- Permission is granted by the Board of Investment (BOI). According to section 97 of the Thai Land Law, the definition of a foreigner includes a Thai registered company or partnership in which more than 49% of the capital is owned by foreigners or of which more than half the shareholders or partners are foreign citizens. This does not happen often.
What taxes, fees and costs are applicable to purchasing a property in Thailand?
The following taxes apply for purchases of property in Thailand:
- Transfer Fee of 2% ( 0.01% until April 2010) of land assessed value.
- Business Tax of 3.3% (0.11% until April 2010) of the sales price or the assessed value, whichever is higher, must be paid in cases that a seller has a property in his possession for less than 5 years.
- Stamp Duty of 0.5% of the appraised price must be paid only when a specific business tax is not applicable.
NOTE: the matter of who pays for these taxes is negotiated at time of offer. It is very common that these taxes are shared equally between buyer and seller.
Are there Property Taxes in Thailand?
There are no property taxes as such in Thailand that are exactly equivalent to the property taxes in the west. The most comparable taxes on properties in Thailand are the Land Tax and the Structures Usage Tax. The Land Tax levied on land is so miniscule, that in practice the body charged to collect it, rarely bothers to do so, and if they do, they usually wait several years until the amount accumulates. The second tax, the Structures Usage Tax, relates to buildings, is collected by the municipal office or district office, and is only applied to properties used for commercial purpose.
What taxes, fees and costs are applicable when I sell a property in Thailand?
The taxes when selling a property are the same as when buying, except there is also a withholding tax. This tax ranges form from 0 to37%. The tax rate varies based on the income of the seller as follows:
- 0 to 80,000 THB: 0%
- 80,001 to 100,000: 5%
- 100,001 to 500,000: 10%
- 500,001 to 1,000,000: 20%
- 1,000,001 to 4,000,000: 30%
- 4,000,001 and above: 37%
The basis of the tax is the government appraised value less a deduction of between 50% and 92%, depending on how long you own the condo. The longer you own the condo, the lower the deduction from the appraised value, and therefore your withholding tax liability is higher. Specific withholding rates are as follows:
- 92% if you have held the property for one year,
- 84% for two years,
- 77% for three years,
- 71% for four years,
- 65% for five years,
- 60% for six years,
- 55% for seven years,
- 50% for eight years or more.
As with buying property, the following taxes apply for purchases of property:
- Transfer Fee of2% ( 0.01% until April 2009) of land assessed value.
- Business Tax of 3.3% (0.11% until April 2009) of the sales price or the assessed value, whichever is higher, must be paid in cases that a seller has a property in his possession for less than 5 years.
- Stamp Duty of 0.5% of the appraised price must be paid only when a specific business tax is not applicable.