Buying Property in Thailand

Introduction

If you are a foreigner living or traveling in Thailand, you might be curious about the benefits and risks of investing in or buying property in Thailand.

Thailand offers a variety of properties for different budgets and tastes, from affordable condos to luxurious villas. Thailand also has a favorable investment climate, with policies that support foreign ownership of condos and other legal options for buying houses or land. However, buying property in Thailand is not without challenges, and you should be aware of the legal and market conditions before making a decision.

One of the benefits of investing or buying property in Thailand is that you can own a condo as a foreigner. The procedure for buying a condo is subject to rules and allocation of units.

However, if you prefer to buy a house or land, you will need to explore other legal avenues, such as setting up an operational Thai limited company or entering into a long-term lease agreement in Thailand. You can also consider usufruct rights or, Sap Ing Sith rights, which were introduced in 2019. We recommend that you seek professional legal advice from a reputable law firm before signing any contract.

Another benefit of buying property in Thailand is the attractive prices compared to other countries. You can find properties that suit your budget and preferences, from condos starting at around 80,000 THB per square meter in Bangkok’s suburbs to luxury villas costing several million dollars in Phuket or Chiang Mai. However, you should also be aware that property prices in Thailand can vary widely depending on the location and type of property, and they can also change over time. Therefore, it is important to do your homework and work with a reliable real estate agent to find the best deal for you.

Thai Limited Company

One of the ways to protect real estate investments or when buying property in Thailand is to set up a Thai limited company. A Thai limited company is a legal entity that can own land and property in Thailand, and can be controlled by foreigners as long as at least 51% of the shares are held by Thai nationals or legal entities. However, setting up a Thai limited company involves some costs and risks, such as paying taxes, complying with regulations, and finding trustworthy Thai partners. The company must also be operational and trading, not just set up to hold land.

Usufruct

Another option is to obtain a usufruct, which is a right to use and benefit from someone else’s property for a certain period of time, usually your lifetime. A usufruct can be registered at the Land Department but cannot be inherited by the usufructuary’s heirs. A usufruct can allow a foreigner to enjoy the use of land and property in Thailand without owning it, but it also has some limitations, such as not being able to sell or transfer the property, and having to maintain it in good condition.

Building Permit in a Foreign Nationals Name

A third way to protect real estate investments in Thailand is to build a house with permits in a foreign national’s name. A foreigner can legally own a house or building in Thailand, but not the land on which it stands. Therefore, a foreigner can build a house on leased land or land owned by a Thai spouse or partner, and register the ownership of the house at the Land Department. However, this method also has some drawbacks, such as having to obtain a construction permit, paying for the construction costs, and relying on the landowner’s cooperation.

Superficies

The right of Superficies which is a right to own structures on someone else’s land for a certain period of time, usually up to 30 years (renewable) goes hand in hand with the building permit

A superficies can be registered at the Land Department and can be transferred by the superficiary. A superficies can allow a foreigner to own a house or building on leased land or land owned by a Thai spouse or partner, but, as above, it also has some disadvantages, such as having to pay rent for the land, and having to renew the superficies contract when it expires.

Lease Agreement

A fifth way to protect real estate investments or when buying property in Thailand is to enter into a lease agreement with the landowner. A lease agreement can grant a foreigner the right to use and occupy land and property in Thailand for up to 30 years, with an option to renew for another 30 years. A lease agreement can be registered at the Land Department and can include clauses that protect the lessee’s interests, such as allowing subleasing, mortgaging, or transferring the lease. However, a lease agreement also has some risks, such as being subject to the landowner’s consent, paying rent and fees, and facing possible termination or breach of contract. A lease can be left in a last will to an heir.

Sap Ing Sith

A sixth way to protect real estate investments or when buying property in Thailand is to apply for a sap ing sith, which is a new right since 2019.

A sap ing sith can allow a foreigner to own up to 1 rai (1,600 square meters) of land for residential purposes for up to 30 years. However, a sap ing sith is more difficult and more expensive to obtain, that said it provides more protections than a lease for example. Read more here, https://isaanlawyers.com/practice-areas/sap-ing-sith/

Loan or Mortgage

A seventh way to protect real estate investments or when buying property in Thailand is to place a loan or mortgage against the title or property. A loan or mortgage can help a foreigner protect the purchase of land or property in Thailand, as well as secure their ownership rights. By registering a loan or mortgage against the title it should stop other loans being taken out against the title deed or stop unwanted sale of the land or property by the title holder, spouse, family etc.

Due Dilligence

Finally, one of the most important ways to protect real estate investments or when buying property in Thailand is to conduct due diligence and to have contracts reviewed by Isaan lawyers. Due diligence is the process of verifying the legal status and condition of the land or property before buying or leasing it. Due diligence can include checking the title deed, land survey, zoning regulations, encumbrances, taxes, utilities, environmental issues, and other relevant factors. Reviewing contracts by Isaan lawyers is the process of ensuring that the terms and conditions of the sale or lease agreement are fair and lawful.

Isaan lawyers can negotiate with the seller or lessor, can assist in drafting or revising clauses, registering documents at the Land Department, and resolving disputes.

Conclusion

BUYING PROPERTY IN THAILAND

These are some of the different ways to protect real estate investments or when buying property in Thailand. Each method has its own advantages and disadvantages that should be carefully considered before making a decision. Investing in or when buying property in Thailand can be a rewarding and profitable venture, but it also requires caution and diligence.

Contact Isaan lawyers who have been assisting expats and overseas nationals with buying property in Thailand since 2006

Contact our commercial team today

www.isaanlawyers.com

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0844715775

In Pattaya you may wish to contact our sister firm www.anglosiamlegal.com

Buying Property in Thailand