Buying Property in Thailand
Thailand is a popular destination for foreign property buyers, thanks to its beautiful landscapes, thriving economy, and attractive real estate market. However, purchasing property in Thailand can be complex due to ownership restrictions on foreigners, legal requirements, and necessary due diligence.
This guide provides a detailed overview of buying property in Thailand, including legal structures, property types, ownership restrictions, due diligence, sales contracts, title transfers, taxes, and key considerations.
1. Can Foreigners Buy Property in Thailand?
Ownership Restrictions for Foreigners
Foreigners cannot own land in Thailand, but they can legally purchase:
- Condos (Freehold ownership)
- Buildings (Without owning the land)
- Land (Through leasehold or Thai company ownership)
2. Types of Property Foreigners Can Buy
1. Condominiums (Easiest Option for Foreigners)
Under the Condominium Act (1979), foreigners can own freehold condos as long as:
- The condo is in a building where foreign ownership does not exceed 49%.
- The purchase funds are transferred from abroad and properly documented.
Benefits:
✅ Full ownership rights
✅ No need for a Thai partner or company
✅ Can be resold or rented out
2. Leasehold Land and Villas
Foreigners can lease land for up to 30 years, with an option to renew. This is a common way to own villas or houses in Thailand.
Key Lease Terms:
- Lease agreements should be registered at the Land Office.
- Ensure a renewal clause is included for future extensions.
Benefits:
✅ Long-term security
✅ Legal and widely accepted
3. Thai Company Ownership (for Land and Houses)
Foreigners can set up a Thai Limited Company to buy land, but:
- Foreigners can only hold 49% of company shares (Thais must own 51%).
- The company must be genuinely operational (not a nominee structure).
Benefits:
✅ Can own land legally through a company
✅ Long-term control through company management
4. Marrying a Thai Citizen (Spousal Ownership)
If married to a Thai citizen, foreigners can buy land in the spouse’s name but must sign a declaration waiving ownership rights.
3. Due Diligence Before Buying Property
Before purchasing property in Thailand, proper due diligence is essential to avoid legal and financial risks.
Key Due Diligence Steps:
✔️ Title Deed Verification – Check the land title at the Land Office to confirm ownership.
✔️ Land Office Records – Ensure there are no encumbrances, mortgages, or legal disputes.
✔️ Environmental and Zoning Regulations – Verify that the land is suitable for your intended use.
✔️ Developer Reputation – For off-plan properties, check the developer’s financial health and past projects.
✔️ Infrastructure and Utilities – Confirm access to roads, electricity, water, and drainage.
4. The Buying Process for Property in Thailand
Step 1: Find a Property and Negotiate Price
- Work with a reputable real estate agent.
- Negotiate the terms, including payment schedule, deposit, and conditions.
Step 2: Hire a Lawyer
- A lawyer can review contracts, conduct due diligence, and ensure compliance.
- Legal fees typically range from 1-3% of the property price.
Step 3: Sign a Sales Agreement and Pay a Deposit
- The Sales and Purchase Agreement (SPA) outlines the terms and conditions.
- A deposit (usually 10-30%) is required to secure the property.
Step 4: Transfer of Ownership at the Land Office
- Both buyer and seller visit the Land Department to complete the transfer.
- Foreigners must provide proof of foreign currency transfer (FET Form).
- Fees and taxes must be paid before registration.
Step 5: Receive the Title Deed
- For condos: Chanote title deed is issued in the buyer’s name.
- For leasehold properties: The lease is registered at the Land Office.
5. Property Titles in Thailand
It’s important to understand Thai land titles to ensure clear ownership rights.
1. Chanote (Freehold Title) – Best Title
- The most secure and official land title in Thailand.
- Allows clear ownership rights and land boundaries.
2. Nor Sor 3 Gor – Can Be Upgraded to Chanote
- Recognized legal ownership, but land boundaries may not be fully surveyed.
3. Nor Sor 3 – Requires Public Notice Before Transfer
- Less secure title that may require a 30-day public notice before sale.
⚠️ Avoid land with lesser titles (Sor Kor 1, Por Bor Tor 5) as they do not provide full ownership rights.
6. Taxes and Fees When Buying Property in Thailand
Buyers and sellers must pay various taxes and fees at the time of purchase.
1. Transfer Fee: 2% of the property value
- Paid to the Land Office upon ownership transfer.
2. Stamp Duty: 0.5% (if exempt from business tax)
- Paid by the seller.
3. Withholding Tax: 1% (for companies) or based on personal income tax
- Paid by the seller.
4. Specific Business Tax (SBT): 3.3% (if sold within 5 years)
- Applies to sales within 5 years of acquisition.
5. Lease Registration Fee: 1% (for leasehold properties)
- Payable at the Land Office when registering a lease.
7. Financing Options for Foreign Buyers
Most Thai banks do not offer mortgages to foreigners, but some options include:
- Foreign bank loans (from Singapore, Hong Kong, etc.).
- Developer financing for off-plan projects.
- Personal loans from international banks.
8. Risks to Consider When Buying Property in Thailand
1. Foreign Ownership Restrictions
- Land ownership is strictly regulated for foreigners.
- Avoid illegal nominee structures, as they can be nullified by the government.
2. Developer Risks (Off-Plan Properties)
- Some projects face delays, financial problems, or poor quality construction.
- Always research the developer’s track record before buying off-plan.
3. Leasehold Uncertainty
- Lease extensions beyond 30 years are not guaranteed.
- Ensure a well-drafted lease contract with clear renewal terms.
9. Best Practices for Foreign Buyers
✔️ Work with a Lawyer – Legal support is essential for safe transactions.
✔️ Choose Freehold Condos for Simplicity – Easiest legal ownership option.
✔️ Avoid Verbal Agreements – Ensure all contracts are legally documented.
✔️ Verify the Title Deed – Always check the property’s legal status.
✔️ Be Cautious with Leasehold Properties – Make sure lease agreements are legally binding.
10. Conclusion
Buying property in Thailand can be a rewarding investment, but it requires careful planning, legal compliance, and due diligence. While foreigners face restrictions on land ownership, options like freehold condos, leaseholds, and company ownership provide viable alternatives.
By understanding the legal landscape, ownership laws, and transaction process, foreign buyers can make secure and profitable real estate investments in Thailand.