Thailand Property Ownership for Foreigners: A Legal Guide

Foreigners can buy real estate in Thailand, and the most straightforward form of ownership is through Freehold Condominium Titles (Condos)

Thailand, known as the Land of Smiles, is often considered a dream relocation and retirement destination. The country’s unique culture, lifestyle, and the friendly nature of its people make it an attractive choice for many. Moreover, Thailand serves as a vibrant economic hub in Southeast Asia, making it a prime location for international companies to establish their operations and tap into the Southeast Asian market. These socio-economic advantages have resulted in increased foreign investment, job creation, and significant business and career opportunities.

If you are an expat already living the “Thai Dream,” a frequent traveler, or an investor seeking diversification, it’s not uncommon to contemplate purchasing property in Thailand.

So, can foreigners buy property in Thailand?

The simple answer is “yes.” Non-Thais can buy real estate in Thailand, but with certain restrictions. Foreigners are not allowed to buy land or landed properties such as villas or townhouses in their own name. However, they can acquire condominiums freehold which grants them full ownership rights.

Non-Thais interested in land or landed property also have the option to purchase it on a leasehold basis. According to Thai law, the maximum leasehold term is 30 years. However, residential developers often provide leasehold renewal options to buyers. It is common to find villa projects that come with two guaranteed contractual extensions, effectively extending the leasehold term to 90 years of ownership.

Now, let’s delve deeper into the subject of foreign property ownership in Thailand.

Ownership of Freehold Condominiums (Condos)

The most straightforward way for foreign homebuyers and investors to acquire real estate in Thailand is by purchasing a Freehold Condominium Title, commonly known as a condo. When buying a condo, the foreign buyer’s name appears on the property’s Title Deed, with no limitations on transfer and duration of ownership.

According to the Thai Condominium Act B.E 1979, a Freehold Condominium Title refers to the division of a residential building into individual condos. Each condo represents a partial co-ownership of the building, including common areas and the Juristic Management Office.

It’s important to note that, under the Thai Condominium Act, foreign buyers can own up to 49% of the condo’s registrable area, while the remaining 51% must be owned by Thai nationals or entities. This rule is commonly referred to as the “Foreign Quota” (49% available to foreign buyers) and the “Thai Quota” of a condo project.

In simpler terms, in a condo project with 100 units, only 49 units can be sold to non-Thais. This nuanced legal exemption, effectively maintains Thai control over the condominium.

Ownership of Land and Landed Property

As mentioned earlier, direct ownership of land and landed property remains out of reach for foreign homebuyers and investors.

However, where there is demand, legal options often emerge for buyers willing to take indirect paths to ownership and control of real estate.

Option 1: Leasehold

Foreigners can opt for the relatively straightforward choice of buying landed property on a leasehold basis, allowing them to enjoy the property for a period of 30 years, with possible extensions.

Many residential developers, particularly in coastal cities like Phuket, Pattaya, and Hua Hin, facilitate this process by offering foreign buyers the opportunity to purchase villas and houses on long leasehold terms (90-year leases). It’s important to note that leasehold extensions are contractual agreements between the developer, landowner, and property buyer. Thus, there is no guarantee that extensions will occur if the developer or landowner fails to fulfill their contractual obligations.

Option 2: Buying through a Thai Company

According to the spirit of the law, land ownership is technically only possible for Thai nationals and Thai entities. Consequently, foreign owners can buy land indirectly by setting up a Thai company.

However, this option comes with a caveat—the shareholding structure of the company must still have a majority Thai shareholding of 51%. Finding Thai shareholders can be a challenge.

It’s also important to note that the holding company must comply with annual tax filing obligations, resulting in ongoing administrative expenses.

Despite the complexities involved, purchasing landed property offers buyers unique control, lifestyle benefits, and independence that may be preferable compared to condos. For instance, homeowners have control over the property’s design, structure, and potential building extensions. Furthermore, it is worth noting that historically, investing in land as an asset class has demonstrated significant capital appreciation returns. 

Therefore, establishing a business as a holding vehicle for landed property is a common practice, particularly in Phuket, Pattaya, and Hua Hin, where many homebuyers and investors opt for villas and houses.

Option 3: Indirect Ownership through a Spouse

Some foreign buyers choose to purchase landed property under their spouse’s name. According to Thai law, assets acquired after marriage are jointly owned, meaning that any eventual sale or transfer would require the authorization of both parties.

This method of ownership provides an indirect way to acquire real estate, although it requires a high level of trust between spouses. Buying real estate is often a highly personal decision, and individuals should carefully assess their goals, lifestyle, and personal situation.

Changes to Thai Real Estate Ownership Laws?

In recent years, there have been frequent media announcements regarding possible changes to Thai ownership laws, particularly with regards to allowing foreigners to own land.

Some proposed changes include allowing foreigners to own landed properties over specific budgets, within designated projects, and with location restrictions. The most recent proposal was to implement a foreign quota system similar to condos for housing projects above a certain value.

Another concept floated by lawmakers was to allow foreigners to exceed the current 49% foreign quota limit in condominiums, albeit with certain restrictions on control of the Juristic Management Office. Additionally, there has been talk of extending the minimum leasehold period from 30 years to 50 years.

The topic of foreign land ownership is highly debated, with critics warning of potential uncontrollable asset bubbles and the crowding out of local buyers if laws were to be amended. Land ownership remains a contentious subject in Thailand.

The recent economic struggles caused by the COVID-19 pandemic have fueled speculation about whether foreigners should be allowed to own land. Many supporters in the business community see this as a potential boost to the local real estate market. However, immediate legislative changes to real estate ownership laws are unlikely in the coming years!

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