The Property Laws for Foreign Investors in Thailand

Have you been considering purchasing properties in Phuket?

Not to burst your bubble, but foreigners are technically not allowed to purchase properties in Thailand. To put it simply, the country’s laws prohibit foreigners from owning and having their names attached to Thai properties. However, with suitable ownership structures, you can avail of exceptions and own your prospective properties. 

If you are an interested foreign investor, here are Thai property laws you might find applicable.

Control Buildings and Land Structures

As defined in Thai laws, any individual, including foreigners, may register for any building type or structure erected on the land. This does not conflict with land ownership rules as this arrangement means that the erected building and the land are separate entities. Hence, under Civil Law, the property is not considered a component of the land where it is placed. If duly registered under the Land Office, building owners are protected whenever the lease agreement applies.

Purchase Condo Units

Foreigners generally prefer to buy condominium units when engaging in Thai properties. This is because it is more convenient to avail of freehold ownership among individual condo units.

Under Thai laws, foreigners can purchase up to 49% provided that the other 51% has been allocated to local ownership. Foreign-owned condos are registered under the owners’ names making condos a form of freehold property. This means that there’s better value in the purchased property in case of a resale or other related real estate investments.

To purchase condominiums, foreign investors need to observe the correct process to ensure ownership of the property. First, the money for purchase must be sent through one’s foreign country account and needs to be converted to Thai Bhat upon transaction. Such is done through completing a Foreign Exchange Transaction Form (FETF). Your real estate agent should also assist you in ensuring your condo purchase’s legalities and attaining its best value.

Invest in Leasehold Property

The Thai property laws also give foreigners the option to purchase leasehold properties. By definition, leasehold properties pertain to land or building on a lease from its landlord or owner. 

Leasehold properties are becoming more popular among foreign investors as it gives them more options.  Unlike freehold properties that limit one to purchasing condos, leasehold rights extend to land and other properties available in Phuket, including villas, townhouses, residential houses, and the likes. Leasehold properties are also accessible in more areas in Phuket which is conducive for more investment opportunities. Another advantage is how lease properties are not restricted to board controls, common among freehold properties. 

In terms of longevity of lease, the laws guarantee a 30-year lease contract agreement that may be extended to two subsequent renewals, totaling 60 to 90 years. Within this period, the Land Department recognizes property rights that prevent unprecedented or abusive measures from landlords and building owners that may disrupt occupation of the leased property.

Regardless of whatever means foreigners want to purchase Thai property, especially in Phuket, the secret is finding the right agency to help find the best option and assist in ensuring the smoothness and ease of the real estate investment.