Thailand Real Estate Law
In the past, foreign ownership of land in Thailand was restricted. However, recent policy changes allow foreigners to purchase property by signing a joint declaration with their Thai spouse. This new policy also allows them to take advantage of tax benefits.
Condominium freehold titles are a popular choice for investors. These properties offer a share of common facilities like car parks, gardens, and pools.
Buying real estate in Thailand requires a thorough understanding of the country’s land law. This includes a knowledge of the laws regarding usufruct, servitude, superficies and the right of heirs. It is also important to understand the process of registering property ownership in Thailand.
Foreigners cannot own freehold land in Thailand, but they can purchase condominium units within the quota set aside for foreign ownership. They can also own leases and minority positions in limited companies that own land. However, it is advisable for foreign investors to consult with a legal professional before acquiring any properties in Thailand.
Non-Thai residents can acquire a life term interest in some types of land rights, such as a right to use (usufruct) and the right of superficies. These rights must be registered on the land title deed to be valid. Some developers have clauses in their sales and purchase addendums stating that leases will be renewed for 30 + 30 years, but these are not legally binding because they do not appear on the land (property) title.
Condominium law in Thailand covers the rules and regulations of owning and managing a condominium building. It also covers the ownership of common areas such as walkways, gyms, and pools. Moreover, it establishes a system of governing the condominium and setting fees for its management. It also establishes inheritance laws for condo units.
When a person buys a condo in Thailand, they have to pay several taxes and fees including transfer fee, stamp duty, and withholding tax (personal or corporate). The amount of these taxes is usually split between the buyer and seller in resale agreements.
Generally, foreigners can own up to 49% of the space in a condominium building, but they must meet certain requirements to qualify for ownership. For example, they must have a valid passport and visa. They must also produce a Foreign Exchange Transaction form from a bank authorized by the Thailand government. The original copy of this form must be submitted to the Land Department for registration.
A usufruct (known as
The usufruct can’t be sold or transferred (even through inheritance) and only lasts for the life of the person who has it. It also can’t be used to circumvent Thailand’s law against foreigners owning land.
Most expats opt for a usufruct when buying a house in Thailand, as it protects their spouse’s interest in the property should they die before the 30 year period has elapsed. However, you should ensure that the length of time is clearly stated and that the usufruct is registered on the back of the title deed and not the front, as this can be misleading.
A lease is a legal contract between the lessor and the lessee. Its terms are governed by the Civil and Commercial Code chapter ’Rent of Property’. The law requires that any lease agreement must be in writing and registered with the Land Department to be enforceable. This includes any agreement for a period longer than three years.
In Thailand it is possible to buy a long-term leasehold interest in immovable property. However, it is important to note that this type of purchase must comply with strict Land and Housing Development laws. A lease structure that does not comply with these rules could be deemed as a sale of land without a building procedure or right of superficies according to Thai Law.
It is also crucial to note that the rights holder’s heirs do not automatically receive ownership of the leasehold asset. It is therefore important to include a transferability clause in the lease agreement to ensure that heirs can continue to rent the property.