Property in Thailand. What you need to know.
On this page you will find some basic information about buying property in Thailand. We suggest that if you are interested in having a second home in Thailand that you consult with a good lawyer before signing any contracts.
Can Foreigners own a house and land in Thailand?
Under Thai law, any person can register any type of building in their own name. So the good news is that foreigners can own their houses. However, the ownership of land is restricted. It is virtually impossible for a foreigner to own land freehold. Therefore, most buyers will opt to own their house, but lease the land it is built on.
Foreign buyers can have a 30 year lease with a prepaid option to renew for a further two periods of 30 years each, making a total of 90 years. The contract will also give the foreigner the option to purchase the land should the law change in the future and to sell or transfer the land at any time. The lease will be registered at the local government land office. If this is not done the enforceable period of any lease, regardless of what is written on the contract, is only 3 years.
It is also possible to have a lawyer set up a Thai registered company that is controlled by the foreign buyer. The company can then own land Freehold. Three shareholders are needed, at least one must be Thai. The Thai shareholder has to hold at least 51% of the shares. But the lawyer will set up the company so the foreign shareholders have the voting shares and therefore they control the company and it’s assets and bank account. Even if you don’t use your company for any business you still have to do accounts and an annual audit. The cost to set up a company with a good English speaking lawyer is from around 30,000 Baht up.
These are very low in Thailand. On a lease agreement you will only have top pay approximately 1.1% of the purchase price in taxes when you register the lease at the government land office. If you were buying freehold the tax would be approximately 5.3% of the purchase price.
** As of mid-2008, the Thai government announced that property taxes would be lowered to approx 0.2% of the selling price in order to stimulate house sales. **
Land Title Deeds in Thailand
There are four types of Land Title in Thailand:
Chanote – A Chanote is a title deed that has been issued by using GPS to set the area and boundaries of the land, which is a very accurate method. This is the most secure type of land title.
Nor Sor Sam Kor – This title deed is basically the same as a Chanote. This title and the Chanote are the only ones that a Thai bank would take as mortgage collateral from a Thai customer. The front of the title deeds will show the current owners name, the land area and also have a small map of the plot which will show any boundaries such as the sea, river, roads etc. The rear of the title deed shows the names of previous owners and also if the title has been used to secure loans or has been leased to a third party.
The above two titles are the ones that a registerable right of ownership or lease can exist, and so are the only titles that most buyers will consider.
Other titles include:
Nor Sor Sam – Land with this title cannot be transferred immediately, a 30 day public notice must be posted before any sale can occur.
Por Bor Tor Ha / Sor Kor Neung – These are farmland title deeds. Only for Thai buyers and expats married to Thais who understand the local way of doing things will consider land with these titles.
You will see large plots of land listed as being a number of ‘Rai’. Smaller housing plots often use ‘Talang Wa’.
1 Hectare = 6.25 Rai
1 Acre = 2.5 Rai
1 Rai = 1,600 sqm = 4 Ngan
1 Ngan = 400sqm = 100 Talang Wa
1 Talang Wa = 4sqm