Yes, yes, yes and YES!
This is a question that often comes up among the concerns of foreigners who wish to buy property in Thailand . It is entirely possible to become a homeowner.
However, certain conditions must be met and knowledge of Thai property law must be maintained.
In this article, we will try to reassure you and guide you through legislation that is still favorable to the acquisition of real estate by foreigners.
Two concepts to know in Thai property law: freehold and leasehold
In Thailand, property law distinguishes between two concepts: freehold and leasehold.
Freehold purchase:
- Full ownership of the property
- Total enjoyment of the property
- Possibility of renting or reselling the property
Buying through a leasehold agreement:
- Property leased for a term of 30 years, renewable according to the terms of the contract.
- Full ownership of the property
- Very long-term rental of the land
- Common practice for foreigners to purchase a house in Thailand
Once these concepts are understood, let's look in detail at the conditions for becoming a property owner in Thailand.
Becoming an apartment owner in Thailand
In accordance with the 1979 Condominium Act, a foreigner can indeed own an apartment in Thailand in their own name, enjoying full ownership for an unlimited period. However, certain conditions must be met.
- The apartment must be in a condominium offering full ownership
- Verify that no more than 49% of the living space in the residence has been sold to foreigners. This quota of foreign owners in the residence must be respected.
- All funds must cover the purchase of the property, originate from abroad, and be in foreign currency.
Your apartment's ownership will be registered with the land registry, where a title deed can be issued to you. Many programs offer apartments in upscale residences that meet all these requirements.
Becoming a landowner in Thailand
The nuance regarding property rights lies in this point. Foreigners cannot own land in their own name and have full ownership rights. However, they can own the house built on that land.
Foreign investors will therefore be able to obtain full use of the land through a 30-year lease, renewable under conditions agreed upon with the owner. Generally, this contract is renewable twice, for a total term of 90 years.
Furthermore, the lease agreement must be registered with the Land Department. It must include clauses regarding renewal, inheritance, lease termination, or the registration of a new lease in the event of the house being sold.
This practice is very common, inexpensive, and perfectly legal. This arrangement allows one to approach the status of full ownership.
You can also purchase the land through a Thai company with a majority Thai shareholder. If you choose this option, we recommend establishing the company with a Thai partner who contributes the capital. Consult a lawyer specializing in this type of arrangement.
Becoming a homeowner in Thailand
Yes, you can own a superb villa with a swimming pool in Hua Hin!
As we have just seen, foreigners are not allowed to buy land. However, even if you do not own the land, you can benefit from a usufruct on this land for 30 years, renewable according to the conditions stipulated in the lease agreement registered with the land registry.
However, you will own the house built on the land through a leasehold agreement. A leasehold agreement is the solution for buying a house in Thailand without owning the land.
Ownership of the house or villa will be recorded by means of a building permit if it is a house under construction or a deed of sale registered in the land registry in the case of a resale.
Practical tips for becoming a homeowner in Thailand
Take the time to check the following points before finalizing your purchase of an apartment or house.
- Always deal with a legal entity, not an individual. If the owner dies, you will face serious complications.
- Verify that the lease agreement is registered with the land registry. The agreement, written in Thai, must include the renewal terms and any changes in legislation. This procedure is mandatory for any property with a lease term exceeding three years. Failure to register with the Thai authorities will automatically reduce your 30-year lease to three years.
- Don't get involved in dubious legal arrangements that skirt the edge of legality. To facilitate property acquisition by foreigners, some practices circumvent the law by creating companies with a majority Thai shareholder. This type of procedure can quickly backfire on the investor who doesn't control the shareholding. If the authorities discover that this arrangement conceals 100% foreign investment, the company will be dissolved immediately. Be vigilant and consult a lawyer to guide this type of arrangement.
- Since the contracts are written exclusively in Thai, pay particular attention to the translator to avoid any errors or mistakes regarding your name. Ideally, send the documents to your Thai lawyer, who will ensure the translation is accurate and that the contract complies with all legal requirements.
- For condominium apartments, ensure that the proportion of foreign owners does not exceed 49% in the building. To verify this, contact the building management company and request a letter confirming the breakdown between Thai and foreign owners. This letter must be submitted to the land registry.
- The money used for finance the property must always originate from abroad and be in foreign currency.
Rest assured after reading this article. You can legally own an apartment or villa in Thailand.
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