Can Foreigners Buy Property in Thailand?
Can foreigners buy property in Thailand? This is definitely one of the most frequently asked questions that we receive.
You’ve probably heard that Thai laws do not allow foreigners to own any property in Thailand, but then you’ve seen lots of foreigners buying properties in popular tourist destinations like Phuket, Pattaya, Samui, Bangkok, Chiang Mai or even in the Northeast.
We at Phuket Condo.net have plenty of property in Thailand for sale, with our client base being almost exclusively non-Thai citizens. It is confusing, isn’t it? Not really.
Let’s make everything clear once and for all; a non-Thai citizen can only own a condo or apartment freehold in Thailand.
Now, why only condominium units you might ask?
How to Buy a Condo or Apartment in Thailand as a foreigner
According to 1979 Thai Condominium Act, any type of property in Thailand can be owned up to 49 percent by foreigners, which also goes for condos and apartments, but in this case, the law applies to the unit space and not individual units.
As an example, let’s say there is a condominium project consisting of 100 equally sized units. According to the law, 51 of those units can be owned by Thai citizens and the remaining 49 units can be owned by non-Thai citizens.
The only requirement that foreigners need to meet in order to be granted a foreign freehold land title (or “chanote”) for a condominium unit is that the funds used to purchase the condominium must be transferred into Thailand from abroad, (thus the law is a very good way for Thailand to attract foreign currency to its shores).
Upon receipt of overseas remittances, Thai banks will issue a Foreign Exchange Transaction Form (FETF) which needs to be presented at the land office when transferring a unit.
Typically, in any condominium building that is in a destination popular with foreigners, the 49% foreign freehold quota will be filled first.
Foreigners can still purchase a unit on the Thai side of the quota but the ownership of this unit will remain with the developer (usually a Thai company) which will then lease the condo for a period of 30 + 30 +30 years. A 30-year lease is the longest lease that currently be issued under Thai law so each 30-year lease needs to be renewed.
Most developers selling new condominium projects charge a premium for the buyer who wishes to own the unit under the foreign freehold land title.
This is mainly done for two reasons:
1) Developers wish to discourage foreign buyers to a certain extent from purchasing the foreign freehold so they are not left holding the generally less desirable units which can only be leased to foreign buyers.
2) A foreign freehold condo has a higher resale value in comparison to the resale value of a lease.
Can Foreigners Buy Land, Houses or Villas in Thailand?
If you want to buy a house in Thailand as a foreigner, you can buy houses and villas as well as land in Thailand by setting up a Thai company.
The company will be be owned 51% by Thais and 49% by foreigners to accommodate the law. Owning a property this way is referred to as Thai Freehold, as the Thai company will own the property as an asset just as if a Thai citizen would own it under their own name.
The company ownership is structured in a way so the foreigners have full control of the despite owning the minority (49%) of the shares. This is a common way for foreigners to do business and own property and 100% legal: even multi-billion dollar international business chains are operating this way in Thailand, not only when it comes to property.
There are thousands and thousands of land parcels and properties owned under this kind of company structure. Many legal consulting companies offer this type of services to foreigners at very reasonable rates. This way you can own any type of property in Thailand under your own company name.
The cost of setting up a company in Thailand is approximately 45,000 THB. Yearly costs are roughly 20,000 THB for a company solely set up to own a property and not doing any business.
You can use this company to setup an actual business, get a work permit or visa that will allow you to stay in Thailand legally so it is possible to kill two birds with one stone. Owning an asset will also increase the company’s credibility for future business actions.
Another way for a foreigner to own property by proxy is via a Thai citizen such as a spouse, or trusted partner. This has obvious drawbacks and comes down to a personal decision.
What is a Leasehold Title?
As mentioned above briefly in relation to condominiums, another way for a non-Thai to own property in Thailand is through the purchase of a lease.
This is the cheapest and easiest way to own property in Thailand. Thai laws don’t allow anyone to lease a property more than 30 years. It is possible to sign extendable contract for 90 years which will be 30 + 30 + 30 years. This can be prepared by a lawyer easily.
Important part to be careful with is to make sure all the data and information on the title deed is correct, and the land you are leasing has the proper title. It should have a correct contract duration, purchaser’s rights to resell it and the registration fee.
Do You Still Have Hesitations?
According to official statistics more than one billion Thai Baht is invested yearly in Thailand by international buyers. Even though it is a big decision to make, and a big step in your life, don’t forget that thousands before you have invested.
Thai law is also very strong and clear in relation to ownership rights. We recommend that you do homework, get all the information straight, find a good property agent and a good lawyer to help you go through the final part of the process. For ethical reasons we don’t recommend a specific lawyer, however, there are very trustworthy and professional law firms out there that you can find with a quick research.
Let Us Know Your Requirements
If you have any questions please do not hesitate to contact us. We provide free consultation and no obligations to use our service and are happy to answer all your questions on how to purchase property in Thailand as a foreigner. Let us know what your dream property in Phuket look like and we’ll be happy to put together a package with properties tailor suited for your needs and specifications.