A condominium unit is the only type of property which can be purchased 100% legally into the name of a Foreigner (Non-Thai national) on a freehold base. The process of acquiring ownership is quit simple and straight forwards. Ownership is registered at the relevant land department by adding and documenting the sales transaction and new owners name into the title deed. In order for foreigners to qualify for ownership, some conditions have to be met as follows:
The funds of which the condominium unit is purchased have to come in full from abroad and the sending bank’s wire transfer message should clearly mention that the funds are for the purpose of purchasing a condominium in Thailand. The senders name should be that same as the name of which the condominium title deed will be registered in and receivers name can or be the sender or the seller. After the funds have been received by the Thai bank, a request for an issuance of a Foreign Exchange Transaction Form (formally called Tor Tor Sam) can be obtained by the receiving bank. This document is required by the land department on the day of transferring the title deed into the foreigner’s name.
The condominium should still have sufficient foreign quota of at least 49% of the total units in the building.
The condominium building shall not be situated in the area of military safety zone under the law on Military Safety Zone
The total land size the condominium is constructed on does not exceed 5 Rai (1 Rai = 1,600 sqm)
The condominium shall be situated in Bangkok Metropolis, municipality area or other local administrative area
According to the Condominium Act B.E. 2522 (A.D. 1979), a condominium is defined as a building that can be have its separate portions sold to individuals or groups for personal property ownership.
Foreigners are not allowed to own land in Thailand, however foreigners are allowed to own the house which is build on the land, subject to, that the building permission of the house has been issued into the name of the house owner, upon construction of the house.
One favorite way to gain right of habitation of the land is to construct a lease. According to Thai law, a Non Thai national can enter into a lease agreement with a land owner ( a Thai citizen or Thai legal entity) to have a legal right over the land for a maximum period of 30 years. If the lease period is longer than 3 year, the lease has to be registered at the relevant land department in order to be legally effective. The lease agreement can be constructed with an option for an additional 30 years extension; however this extension can not be registered at the land department at the same time the first 30 years are registered..
Buying land through a Thai Company Limited
A lot of foreigners choose the option of establishing a Thai Company Limited in order to purchase land in Thailand. However be aware that according to the Thai law, a company limited need to have at least 3 shareholders (since July 1, 2008) and the maximum shares a foreigner can own may not be more than 39% incase the company enters into a land purchase (otherwise 49%). We would only recommend this structure unless all Thai shareholders are genuine investors and not act as nominees for the Non Thai share holder. Please note that it is illegal for a Thai national to act as a nominee for a Non Thai national, incase this is for the purpose of owning land. Even though currently officials seems to close their eyes on the nominee issue, you have no assurance that the issue is not brought up at a later stage, as it clearly is a way to circumvent the Thai land law which simply does not allow foreigners to own land.
Securing your habitation rights with a Usufruct
A usufruct is a right granted by an owner of land in favor of a usufructuary whereby the usufructuary (Thai or Non Thai) has the right to posses, use and enjoy the benefits of the property. The usefructuary can also have the right of management of the property.
A usufruct may be created for your natural life. As an usufructuary you have the right to lease the land to a third party. With the usufruct, you are registered on the title deed. The land can not be sold or transferred by the owner of the land until the servitude is terminated.
We have outlined some important legal advice related to property ownership in Thailand. Please feel free to contact us for any further information.