Introduction

For most foreigners Thai law prevents the ownership of land or more than 49% of a Thai company. Most condominiums are available to foreigners for outright purchase, subject to certain occupancy limits and registration of the condominium unit, so purchasers need to check first. Land and houses can be owned and controlled through a Thai registered company. Before buying anything check with a property professional first.

Types of Land or Property Title

There are several types of title used to register a person's interest in the property. Many types of title are very restrictive and totally unsuitable for foreign ownership. We recommend foreigners consider only Chanote or Nor Sor Sahm Gor titles, as with all the others you will almost certainly run into problems. Nor Sor Sahm (without the ‘Gor’) can sometimes be changed into Nor Sor Sahm Gor but this should be done by the Thai owner and not by you. Titles should also be checked for encumbrances which need to be registered on the reverse of the title document to be enforceable. Your lawyer should check this carefully.

Leases are another possibility. Under Thai law, foreigners may own leases of up to 30 years. Provision can be made by contract to extend these leases at the expiration of the original term, commonly by another 30 years or 30 plus 30 years, but the legal efficacy of this has yet to be tested. That being said, it is likely that the law on foreign ownership will be amended at some time or other, but no one knows when. It would be sensible to provide for transfer of the freehold title, should the law be changed to allow foreign ownership. Beware of selling a lease as leases are treated as rent paid in advance, and not as a long-term asset, resulting in tax being assessed on the amortised rental income every year. For some reason, Thais seem to be able to avoid this as a foreigner, not a hope.

Transfer and Taxes

Land titles are transferred by a visit to the local land Department. There is usually a long wait at the Department as everything is done manually, and there are usually several parties waiting to the procedure to be completed. The process is not complicated, but it's frustrating, and if you can't read Thai, it's not advisable to try it on your own. Our advice is to have your lawyer, to arrange check the transfer for you. It should not cost too much and will save a lot of frustration with the added benefit that the lawyer can check everything is properly completed.

As with everything in life, there are taxes to pay, the calculation of which is not straightforward. In law, the bulk of the tax is payable by the seller, with a smaller proportion payable by the buyer. However, the general practice is for the taxes to be shared between buyer and seller. As part of your negotiations would purchase, you should check out the transfer taxes will be dealt with. There are several taxes and duties payable, some of these are calculated on the Land Department's assessment of value, rather than the actual sale price, so it is practically impossible to advise on the precise amount of tax payable, but it should allow for around 5% percent (2.5% for each party), this should be in the ballpark.