PROPERTY: Ownership of Land by Foreigners
The ownership of land by foreign individuals or foreign companies in Thailand is prohibited by law, with very few exceptions (among which are individuals investing over THB 40 Million in government bonds, and companies with Thailand Board of Investment privileges).
Generally-speaking, foreigners wishing to invest in buildings and/or land in Thailand must consider alternate structures or mechanisms available under the law, the most popular of which are the property holding company; leasehold ownership; and various modes of land occupancy, among others.
Since 2006, Thai governments of the day have reviewed current laws and regulations, made some proposals for statutory changes, and implemented some new regulations. This eventually led most law firms in Thailand to revise their recommendations to insure their clients were in compliance with not only the letter of the law but also its intent. New mechanisms evolved that meet Thai legal requirements, and these must be reviewed with any investor prior to signing an agreement to purchase Thai property.
The classification of land under Thai law is complex, and only some categories of land carry clear ownership rights. Land designated as forest or agricultural land frequently does not carry freehold status and cannot even be leased to individuals, be they Thai nationals or otherwise. So it is important that any foreign or Thai investor intending to make an investment in land or buildings consult with professional legal advisors before committing to any property purchase in Thailand
Chiang Mai Property Lawyers, with extensive knowledge of the property market in northern Thailand, is best placed to help any potential investor navigate his or her way through the complex issues of land title deeds, purchase agreements, mortgages and Land Office regulations and fees.
Our Chiang Mai real estate attorneys and foreign advisors are available to meet with potential property investors concerning residential or commercial land and buildings. It is best to meet with an advisor prior to making any firm commitments to purchase or lease.
PROPERTY: Condominium ownership
Whereas land ownership by foreigners in Thailand is generally prohibited, the freehold ownership of condominiums by foreigners is legal, easy and straight-forward. Foreign nationals, including foreign companies, may outright own a condominium unit anywhere in Thailand. The only condition that applies to such purchases: a maximum of 49% of the combined total living space in any one condominium project can be owned free-hold by foreign nationals; the remaining units can be purchased by foreigners on a lease-hold basis, using mechanisms similar to those used for the ownership or occupancy of land (see Ownership of Land in Thailand by Foreigners).
Because of the simplicity of the rules of condo ownership in Thailand, it is the most popular form of property investment by foreigners in the Kingdom today. The property market in Thailand is buoyant, as it is built around the inflow of foreign tourists and retirees, an important segment of Thailand’s economy. Condominium projects are located not only in Bangkok and its suburbs, but throughout Thailand’s tourist destinations, the largest of which are Chiang Mai, Phuket, Pattaya and Ko Samui.
Foreign investors considering the purchase of a condominium in Thailand should engage the services of a professional lawyer at the very outset of their planning, in order to better understand the legal agreements, procedures, timeframes and requirements concerning the inward remittance of investment funds and other related matters.
Chiang Mai Property Lawyers of CNX legal & Real Estate Consult, with its extensive knowledge of the property market in northern Thailand, is well qualified to give you the best advice in such matters—and at a cost that will represent a tiny fraction of your total investment.
PROPERTY: Other Property rights
There are a number of property rights that can be granted to foreigners in Thailand by contract with land-owners. Among these:
- LAND LEASE IN THAILAND: A foreigner can be granted a lease over a plot of land which allows the “Lessee” to live on the land or otherwise make use of that land for a period not exceeding 30 years under current Thai law. The lease, if for a period longer than three years, must be registered at the Thai Land Office in the area where the land is located. Recording of the lease in this way constitutes a “lien” and prohibits the land owner from interfering with the rights of the lessee for the agreed period of the lease. The rights under such a lease may also be passed on to the heirs of the lessee should the lessee die during the term of the lease.
- PROPERTY MORTGAGE IN THAILAND: An individual or company (Thai or foreign) may lend money to a Thai land owner and obtain a lien on the property as collateral for the loan. This mortgage is recorded at the relevant Thai Land Office and can stipulate that the title deed is held by the lender until the loan is fully repaid; and that failure to repay the loan by a certain date then allows the lender to take full right of possession without further involvement by the land owner. This mechanism is sometimes used by foreign nationals to exert control over use of land over which they have a financial interest while skirting the prohibition against foreign ownership of land.
- SUPERFICIES UNDER THAI LAW: An individual or company may secure from a landowner the right to build a house or set up a plantation on land for a period of time as may be agreed in a contract. Once the term of the agreement is reached, the land must be returned to the landowner in its original condition; if a permanent structure was built on the land with permission of the landowner, but not removed at the end of the agreement, the structure’s ownership reverts to the land owner.
- RIGHT OF USUFRUCT UNDER THAI LAW: An individual (“beneficiary”) may gain temporary ownership rights over a parcel of land in Thailand for a period of time through this legal mechanism. It may allow, for example, the beneficiary to cultivate the land for profit or otherwise to use the land for any purpose that doesn’t in any way destroy the property. The maximum term for a usufruct contract under Thai law is 30 years or the lifetime of the beneficiary, and should be recorded at the Land Office in the district where the property is located.
- SERVITUDE: A servitude is defined under Thai law as a right granted to an individual by a landowner which involves access in some way on the landowner’s property (“right of way”). It frequently allows an individual who legally owns an adjoining parcel of land to erect a road allowing access through his neighbor’s land to a public road.
The negotiation and drafting of legal documents outlining such rights must be conducted by experienced and legally-trained individuals such as the advisors and property lawyers at Chiang Mai Legal and Real Estate Consult. They will also insure that the required legal documentation is recorded at the Land Office where the property is located by submitting a Thai copy of the signed agreement.
PROPERTY: Thai Property Services offered by Chiang Mai Lawyers
Chiang Mai Legal and Real Estate Consult in northern Thailand has a professional team of real estate lawyers and advisors experienced in the planning, drafting and execution of all types of agreements concerning land, condominiums and other forms of property.
The firm can provide the following services to those wishing to invest in Thailand property:
- Title search: A title search is conducted at the district Land Office where the property is located. Copies of Thai title deeds are maintained at those offices and those can be viewed by parties wishing to verify the legal status of the property in question.
- Due diligence: When contemplating the purchase of a property in Thailand, or entering into an agreement involving a right to occupy or use such property, Chiang Mai Lawyers can conduct an investigation of the current landowner, his right over the property in question and his financial and business bona fides. This will provide an assurance to CNX Legal & Real Estate Consult’s client that the seller or landlord, as the case may be, is legally and financially capable of fulfilling his or her terms of the agreement with a reasonably high level of confidence.
- Drafting of a contract concerning the transfer of Thai property or granting of a right over property is a critical part of the legal process. Only an experienced legal advisor can insure that the terms of the contract conform to the law and grant all the necessary protections afforded by the law. Chiang Mai Lawyers’ team of contract specialists will draft the proposed agreement and present it to the two parties for their review prior to signature.
- The proposed property action (sale, lease, mortgage, etc.) must then be recorded at the Land Office of the district where the property is located. Chiang Mai Legal & Real Estate Consult’s real estate lawyers will dispatch a representative on the client’s behalf to the Land Office and insure the transaction is recorded in compliance with the law and relevant regulations.
- Chiang Mai Legal & Real Estate Consult has also developed a list of properties in the northern region of Thailand that are currently available for purchase from interested buyers. These properties are inspected prior to listing, and can be viewed within three business days by any client contemplating an investment in land.
- CNX Legal & Real Estate Consult has also affiliated with a small number of licensed and knowledgeable land agents in the northern region of Thailand who can assist clients wishing to invest in property for commercial or residential purposes.