How to buy a property in Thailand as a foreigner?
When it comes to buying property in Thailand as a foreigner, you will find that there are various restrictions on what you can do. This guide will help take you through the basics and give you an understanding of what can be done, and what cannot be done.
-
The limitations on foreign property ownership
-
Can foreigners buy property in Thailand?
-
How to buy property in Thailand as a foreigner?
-
-
How to buy a property through a leasehold?
-
How to buy a property through a freehold?
-
How to buy a property through a limited company?
-
Limitations
-
Advantages
-
-
How to buy a property through a close Thai friend or by marriage?
The limitations on foreign property ownership
Can foreigners buy property in Thailand?
Most countries have some sort of limitations on foreigners buying properties, and Thailand is no exception.
To help prevent foreign investors from driving up the price of land and apartments to levels beyond the financial reach of most Thais, Thailand has specific property ownership laws and generally speaking, foreigners can buy a property but are not permitted to own the land. This applies not only to individuals but also to foreign companies.
How to buy property in Thailand as a foreigner?
If you live out of Thailand or if you are an expat and that you want to invest in real estate in Thailand, bear in mind that there are some exceptions, such as foreign companies promoted by the Thai Board of Investment and some individuals may be granted permission to buy 0.4 acres of land but the requirements make it prohibitive for the vast majority of people.
Therefore, workaround solutions exist to purchase a land in Thailand:
- It is possible for an expat to open a business which can then purchase the land.
- A leasehold on a land can also be a solution to own a land for up to a maximum of 30 years at a time.
Although a foreigner cannot buy lands, it is possible to purchase buildings that sit on a Thai land, and expats have the possibility to purchase a condominium in an easier way.
How to buy a property through a leasehold?
As mentioned above, a foreigner can purchase a leasehold on land in Thailand.
A leasehold basically means the leasehold owner has purchased the right to occupy the land for a given length of time. In essence, it is a type of long-term rent. In Thailand, the upper limit to a leasehold is 30 years.
It is possible to have the leasehold extended but there is no obligation on the owner of the land to grant an extension. Many developers and agents will grant a clause that promises further extensions. However, such clauses are not bound by law.
The obvious advantage of a leasehold when buying property in Thailand as a foreigner is that it is just like owning a freehold, only for a limited amount of time. During the time the leasehold is valid, the owner of the leasehold has exclusive rights over the property. They are even able to apply for planning permission to build houses on the land.
The main risk is that the leaseholder can end up owning a house on the land they have no rights to.
If you are interested in owning a land in Thailand, visit our lands for sale in Koh Samui.
How to buy a property through a freehold?
A freehold means that the foreign investor is “free to hold” the property with no restrictions on time. The owners have exclusive rights to the property and can pass the freehold onto whomever they like (provided the person they are leaving it to is not a foreigner).
Although a foreigner cannot hold a freehold on land, foreigners can take the advantage of a freehold condominium.
This is provided the number of foreigners owning units in a condominium complex does not exceed 49% of the total number of units overall. This is a relatively popular option for foreigners in Thailand because the freehold does not expire, and the unit owner is also able to sell the unit whenever they wish to.
Advantages of owning a freehold property includes having the property for as long as you wish to keep it. Disadvantages include the higher upfront cost and the fact that the property might depreciate in value, although this is not usually the case.
If you are interested in owning a freehold in Thailand, visit our apartments and condos for sale in Koh Samui.
How to buy a property through a limited company?
Limitations
It is possible for a foreigner to own a property through a Thai company, which itself can own the property. However, there are certain limitations around this.
The main limitation is that a foreigner cannot own more than 49% of a Thai company, even if they are the founder of the company. However, a minimum of three shareholders is required, meaning a foreigner who owns 49% will be the majority shareholder. The other shareholders can also sign over their company rights to you, which is usually the case.
Advantages
The advantages of this are that you will retain control over the land for as long as you own the company that owns the freehold. Perhaps the main disadvantage is the need to open a company in order to facilitate the purchase of the land, although this will be no disadvantage to people who already have a Thai company or were considering opening one anyway.
How to buy a property through a close Thai friend or by marriage?
Another solution regarding owning a Thai property is to have the freehold put under the name of a close Thai friend.
Some foreigners may also look to marry a Thai national to acquire land they wish to purchase. This process will be a private agreement between you and the other parties involved and will typically involve you funding the purchase.
The advantages of this are that it will help you to cut through a lot of the bureaucracy. You can own an actual house or villa as opposed to a unit in a condominium building. It also means you do not have to open a Thai company and do everything else that comes with owning a company.
While this would appear to be the easiest and simplest option, it is also the riskiest. Foreigners are not allowed to own a freehold by law, meaning you have no rights to the land at all. If the person who put the freehold in their name reneges on their part of the deal, then there is next to nothing you can do about it. It is a solution that would need to be approached with caution.