If you are planning to become a property owner in Thailand, here is some useful information.
First of all, the general principle is that a foreigner is not allowed to own land in Thailand, but of course, we will discover below the different possibilities to legally acquire land or real estate.
Foreigners can hold:
– An apartment in a “condominium”.
– A villa on land owned by a Thai or a Thai company (Thai people separate ownership of the land from ownership of the building).
– A lease contract registered with the land services for a period of 30 years (renewable).
– 49% shares in a Thai company (support for the acquisition of land or a building).
A foreigner may own in his own name a plot of land of a maximum of 1,600 m2 in Thailand only in one case: to obtain this right, he must invest a minimum of THB 40 million for a minimum of 3 years in an economic activity beneficial to Thailand as defined by the BOI. The capital invested for the acquisition of the property is added to this amount.
Acquisition of a condominium:
Foreigners may acquire in their own name and for an unlimited period of time one or more apartments in a residence that has benefited from a “condominium” licence issued by the government.
This license then allows the developer to sell up to 49% of the residence to foreign investors; they must then ensure that they receive a letter of guarantee when they acquire their apartment confirming that the apartment in question is indeed one of the 49% eligible for acquisition in their own name by foreigners (Condominium Act 1979).
The remaining 51% will be marketed either to Thai investors or to foreigners who will then have incorporated a company under Thai law for the purpose of this acquisition.
The three conditions to be met are as follows:
– Ensure the existence of the “Condo” license is related to the real estate program.
– Make the transfer of the transaction amount from an account located abroad and prove the reality of this transfer by showing the form (Foreign Exchange Transaction Form (FETF)) that is given to you when this transfer is made.
– Buy in a residence intended for 100% marketing.
What is the “Foreign Exchange Transaction Form”?
As previously mentioned, this document issued by the Thai bank receiving the funds will be used both by persons wishing to acquire one or more units in a condominium in their own name; and by foreigners wishing to repatriate the funds brought to Thailand to their country of origin, without legal or tax complications.
NB: Please note that this FETF is only issued for the equivalent of 20,000 US dollars; in addition, your transfer must clearly state the reason for the transfer, the name of the beneficiary as well as the name of the residence and the number of the lot you are buying in this residence.
To benefit from a legally valid FETF, your transfer in Thailand must be made in the currency of the issuing country and then changed to Thai Baht once received in Thailand.
Acquisition of land:
Under current Thai law, foreigners may hold a long-term real estate lease and thus, enjoy real estate for a period of 30 years (renewable); foreigners are not allowed to become the owner of land or more than 49% of the shares of a Thai company holding real estate.
Long-term real estate lease or “Leasehold”
The lease usually granted for a period of 30 years (renewable twice) must be registered (as well as the renewal(s)) with the state land services; once this lease is signed, you will be able to build a villa in your own name if the land is vacant (it will revert to the owner of the land at the end of the initial lease or at the end of its renewal(s)).
The leasee of the land may also choose to dismantle the constructed facilities and return the vacant land to its owner.
First of all, you must turn to competent people (real estate agents or lawyers) to draft your long-term lease and then do not forget to register at the Land Office in order to make it enforceable against third parties.
You should be careful to include clauses in your rental contract relating in particular to:
– The renewal of the contract at the end of the first 30-year period
– The possible modification of laws (in case of a change of the right of ownership on the land and giving you the right to use it)