Property Thailand | Foreign Property Ownership | What can Foreigners Buy?
What can Foreigners Buy?
Foreign Property Ownership
There is a general perception that Thai property law is complicated. Actually, the opposite is true: the laws relating to what foreigners can buy and foreign property ownership in Thailand are quite clear. It is the interplay between the type of legal ownership and the various possible holding structures that make Thai property law seem complex.
Property ownership is ultimately defined in terms of legal concepts, which grant owners legal rights corresponding to the particular ownership type. Each type of legal ownership, in turn, lends itself to various choices in regard to how assets can be owned, influenced by Thai laws relating to foreign property ownership.
Where things get complicated is in the methods and legal structures employed by lawyers on behalf of foreign clients to "get around" the rules on foreign ownership of land and property Thailand. The most common of these is the use of Thai companies by foreigners to buy land. These methods and legal structures are legal, though they might not be in the true spirit of the law intended.
Foreigners can buy and own "freehold condominiums". In a registered condominium, 49% of the units in the building can be sold and owned under the freehold condominium quota. Freehold is the most complete and absolute ownership interest that can be held in property.
Due to the fact that condominiums are a special form of property that foreigners can own, many aspects of condominiums are governed by legislation contained in the Thai Condominium Act, which clarifies the law for property developers and provides a degree of consumer protection for foreign property ownership.
Foreigners can buy and own buildings and structures, such as villas (as distinct from the land on which they sit). Structures can be owned by foreigners in Thailand. The structure (villa) can be owned separately either in a personal name or in an offshore company name.
In Thailand, foreigners cannot own land as freehold.
Leasehold is an interest in land or property whereby the leaseholder does not actually own the land but is granted the right of exclusive possession and use of the property. A lease is not just a contractual agreement; it is also a registrable legal interest against the freehold title document. Once registered, the lease becomes a lien upon the title deed which serves as notice to anyone who attempts to purchase the underlying land that the lease exists and that by purchasing the land they would be subject to the lease.
Foreigners can take a 30-year lease on a property, registered at the land office and private contracts can add leasehold extensions.
The land offices in Thailand refuse to register land, apartment or condominium leases for more than 30 years, although they do allow private agreements to contain lease renewals. Consequently, great efforts are made by registered condominium developers to provide buyers the opportunity to acquire longer leasehold periods.
It is common to come across a 90 (30+30+30) year condominium leasehold structure in Phuket. But to be clear, when you buy property in Thailand through leasehold the longest it can be legally registered at the land office is 30 years. The contract then grants extensions to the lease for foreign property ownership.
The foreign property ownership laws together with the legal structures used to circumvent them appear to provide a balance of convenience for both sides: foreigners get to buy properties in Thailand and Thailand benefits from purchase money coming into the country, increased employment in the construction industry and increased tourist revenue from visiting property owners especially in the retirement segment.
These legal structures have been used in various forms for many years and will continue to be used in the future on property Thailand.
Property Thailand: Call us today for more information regarding what foreigners can buy and legal property ownership at +66 93 606 0906.