Buying Property in Thailand

Written by admin on May 22nd, 2011

Owning Property and Securing Real Estate Investments in Thailand


As developers, and developments vary, so typically the legal structures they use to sell real estate to foreigners also varies. This can lead to confusion between what is the specific law in Thailand relating to real esate and how ‘practice and implementation’ can be different.
The main appropriate methods for acquiring real estate interests as a foreigner are:

Purchasing a “Foreign Freehold Condominium. In legally registered condominiums 49% of the registrable area (not therefore, necessarily, 49% of the units) can be sold directly and legally to foreigners.


Purchasing a lease of 30 years. The maximum term of a registered residential lease in Thailand, is, 30 years. In a direct landlord and tenant relationship, if your lease of 30 years is the equivalent price to a freehold, then you should of course look very carefully at the security of tenure under the lease.  Furthermore, numerous companies will offer ‘renewals’ to the lease term, which notably, cannot be registered but can be placed in the contract. These renewals can vary in their strength and reliability. Some developers are prepared to do their best to try and offer the lessee almost the same protection as if the purchase were freehold, and some are not prepared to assist to such a degree. Please note that foreigners can also ‘own’ buildings, so if there is a land lease of a plot and a property exists upon or is built upon that leased land, then building can be registered to the lessee. The correct paperwork for registering this building ownership should be vetted carefully.

Collective Leasehold

Purchasing a lease of 30 years, and ‘participating’ in the Thai company which controls the land and issues the renewal decision for the additional, typically 2 sets of 30 years. Please note that there is no law about the maximum number of ‘renewals’ but there are lots of myths in the marketplace about what the renewals mean. A renewal of a lease, if unregistered, can be undone or evaded if the land or property against with the lease is registered is sold or passes to a third patry. It logically follows that if the land is ‘locked’ and cannot be sold without approval of an owners committee comprising possessors of property on the land then the owners become protected by virture of their own committee. This means that the legal structure of the Owners Committee then becomes relevant to security of tenure and saleability of your legal interest in the future.  Please note that buildings can also be dealt with separately and owned separately and directly in the name of a foreigner in such a structure.

Thai Company

Using a Thai company, which is involved in conducting business in Thailand, through genuine joint venture with Thai shareholders and foreign shareholders, to acquire the property interest. There was a period of time when this option was very popular amongst foreigners, who took short cuts in relation to the way these companies were set up, and also would not recognize or acknowledge that if the structure is not legitimately business oriented, but rather solely for the purpose of acquiring a land interest in Thailand, that there would be a strong likelihood of contravention of the Land Code of Thailand, which specifically refers to restrictions on ‘Aliens’ controlling directly or indirectly land. If you own a Thai company, you have to file accounts, comply with corporate requirements relating to shareholder meetings, monitor the power of the directors and ‘maintain’ the company with a view to keeping it in good shape for a re-sale.

Shared Ownership

Increasingly popular and increasingly more marketed by developers, fractional or shared ownership of a property. If a product is being sold under the banner ‘Fractional Interest’ then there should be a legal link between the property and you, other than a contract – such as a share certificate or other corporate interest connect to the control of the real estate. Timeshare is distinguishable as timeshare relates to usage right through contract. Various matters such as the exchangeability of the interests; the associated fees for using the interest, and the longevity of ownership of the product to which the fractional relates, any usage or ‘subject to availability’ restrictions, together with an inspection of the level and management of amenities supporting the pogram should be considered.

Alternative Structures

There are some more ‘exotic’ methods of control, but anything which appears very strange; unusual; isn’t commonly used, should be scrutinized carefully and if too complicated, avoided as this may hinder a re-sale.

If you are not a resident, not married to a Thai national, and/or not operating a business in Thailand, then you will not be able to successfully obtain a mortgage from a Thai bank in Thailand to raise finance. Additionally, there are prohibitions on issuance of loans to foreigners which inhibit banks from lending in Thailand. There have been a series of efforts by Thai banks, through overseas branches, to attempt to set up structures of loans to foreigners, but such programs are lengthy and unsuitable to most timelines for a standard property transaction, and the costs involved such as paying a substantial administrative fee to the bank and paying the banks external and internal legal fees and expenses means the exercise in even its limited availability format is not regular nor timely.

Certain overseas banks will consider lending monies if they know you will be purchasing a secure legal interest in property in Thailand, and some independent financial advisers also operate in Thailand specializing in assisting leveraging monies from your financial and other foreign assets including property. As with any type of advice, due diligence on the credibility and good standing of any adviser trying to assist you is a must.

The Purchase Process

Bearing in mind the different types of legal structures available, not all transactions are the same in Thailand relating to property purchase. However, if your adviser explains the processes and timelines for your purchase at the outset, you will be able to monitor proceedings and ask questions where appropriate. You should not try to hurry along critical land title checks, as patience can assist identify and hopefully solve issues. It is reasonable to expect most transactions to start and complete within 30 days. If the seller is very organized, and the due diligence straightforward this timeline can of course be reduced significantly.

Please bear in mind that your ‘sales contract’ may be a lease agreement; a lease agreement and building purchase agreement; a freehold acquisition agreement; a share sale and purchase agreement or a combination of those and therefore you will need to consult with your advisers on the differences. In addition, there may be some ‘ancillary’ contracts, such as an estate management agreement; binding or non-binding rules and regulations; rental programs or usage right schedule.

Remembering the Rules of Business

The transactions least likely to have issues at completion, is where the purchase price is exchanged at the same time as the legal interest in the property. Where this varies, additional caution and consultation on risk is necessary.

Physical Due Diligence

In addition to taking care with the contracts, you should of course also take measures that you would take in any jurisdiction regarding compliance of the property with local building regulations, and the structural and non-structural state of the property. A check of compliance with various local rules and regulations is necessary which can extend to height restrictions, stipulation on the maximum number of rooms in the building permit; stipulation on the maximum number of units in a residential estate, environmental regulation compliance such as distance from the beach or distance from the shoreline in resort areas. You ought to engage a surveyor to conduct a survey of the property and report to you on any issues, before any monies change hands. This is common practice in other jurisdictions and there is no ‘law or custom’ of Thailand requiring you to vary this level of due diligence and inspection.

Land Due Diligence

All property is generally built on land, except some unique water based properties. Therefore, you should in Thailand’s legal framework, instruct your lawyers to conduct a full check into the history and legality of the land. In Thailand, there is no organized state compensation scheme for illegal or ‘bad land’ so the risk is the buyers and the owners. There are lots of different land titles in Thailand, and your lawyer will explain in detail, should you wish, the legal status of those titles. The most common form of land titles are known in English as Chanote; Nor Sor 3 Kor and Nor Sor 3. There are others. All of those titles, have at one time or another in Thailand, had instances of investigation which have sometimes turned into public scandals. In relation to your purchase, you can seek comfort from engaging your law firm to make the appropriate checks. They should even check the courts, to see if the land owners are in disputes in the courts about other matters.


Amazingly, access from the public road to a private property can be overlooked when due diligence is checked with a property. Additionally, some developers have a ‘unique’ approach to the right to use and enjoy property, post-purchase which can affect access. For example, developers have been known

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