It would appear in the first instance that the laws relating to property ownership for foreigners in Thailand are complex and complicated. This is not in point of fact the truth. The laws are understandable and in matter of fact very easy to comprehend if you are given the correct information to start with.
I will start by putting to bed the mythology of property ownership in Thailand.
Question: Foreigners cannot own property or land Thailand period.
Answer: Yet another old wives tale generally created by foreigners living here who for reasons best known to themselves decide to say this.
Question: I have decided to lease a property but I can only get a 30 year lease.
Answer: Once again not true 30 + 30 year leases can be legally registered at the land office.
Question: You can only buy a property in Thailand if you put everything in your Thai girlfriends or a Thai national’s name.
Answer: Absolute rubbish this is the standard answer given the unsuspecting somewhat naive farang who has neither the brains nor ability to think for themselves. OK that might be a little harsh. There are instances where this is a perfectly acceptable scenario, I myself have done this and not encountered any problems. I would however suggest that you take a long hard look at the Thai entity involved and make a qualified decision based on facts and not your emotional connection with this entity. The fact is quite simple if the property is wholly owned paper by a Thai entity and for any reason that relationship goes south, you will be left with little more than your blushes.
Question: A foreigner can only own a property in Thailand if he is a resident here/on a work permit/or super rich.
Answer: Balony, many speculators and foreigners who are seeking a home in the sun or a second home buy homes in Thailand.
Question: If I set up a company with 51% Thai shareholders, do I have to pay them dividend every year. Only 3 Thai persons are enough for setting up a Ltd., as of 3 September 2008.
Answer: Once again not true. In essence what you are doing is running a company that makes no profit and no losses and no dividend is payable.
The above questions and answers are probably the five most often asked questions in the event that you have any further questions please do not hesitate to contact us we will endeavour to assist you.
The information below will further explain Thai property law: There are two main ways in which you can legally own property in Thailand. Both of these are 100% legal and will ensure your interests are protected.
Thai Limited Company
This is the most commonly used way to buy a property in effect it is the Ltd. company that is buying the land, not an individual entity. The freehold title to the land belongs to the Ltd. company. You are the sole director of that company and you are the only person who can legally bind the company to any transaction including selling the house or the land that is built on. This legislation written into the memorandum of articles effectively gives the minority share holder control of the company.
One of the other benefits of buying a property in this way is that in the event that you chose to sell your property all you have to do is transfer your shareholding to the new buyer. This is beneficial for two reasons; firstly there is no land transfer tax on this transaction and secondly there is no requirement to register the property at the land registration department.
One must remember that in this instance in the event that you chose to sell your property that you are actually selling a company which has an asset being your property.
Most foreigners who “own” land and houses (as opposed to condos, which can be owned outright) go for a leasehold agreement of typically 30 years, with one prepaid 30 year renewal, this gives you 60 years. The lease will include clauses that automatically allow freehold ownership if the laws of foreign ownership change in future. Checkout more about Thai Lease law on www.samuiforsale.com/other-miscellaneous/translation-thailand-lease-law.html
Buying a condominium is perhaps the simplest and easiest option to own property in Thailand. Living in a condominium is quite inhabited in Thailand and in fact they are mostly very luxurious. A condominium block mostly has its own swimming pool, sauna, fitness centre and restaurant.
Condominium ownership is much more straightforward, you simply buy it on your own name. There is a law that stipulates that in event that the condominium block was to be more then 49% foreign owned you would have to revert back to the Ltd. company scenario. In our experience this is most unlikely…
The above information is in no way meant to deter you from purchasing a property in Thailand much the opposite; it is a statement of fact. If you follow the rules and take due diligence it’s actually quite easy. At Hua Hin Land And House Consultancy Co., Ltd., we are there to assist you with your perspective purchase and will be there to help you every step of the way this is the part of the personal service you are guaranteed when purchasing a property from Hua Hin Land And House Consultancy Co., Ltd..
Of course buying property in Thailand will brings along legal papers much the same way as anywhere else in the world. We have listed below an essential check list for any prospective buyers.
A Title Deed is the only form of evidence that an individual actually owns the property or peace of land he is trying to sell. Title deeds are given only for areas of Thailand which have been surveyed.
Chanotte Ti Din is title deeds with land accurately surveyed. If you have a Chanotte Ti Din title deed, it gives you incontestable possession of the land. It is worth notice only approximately 15% of land is under this title. Most titles around the country Are Nor Sor Sam or Nor Sam Kor. They are title deeds in as much as clear records of ownership are maintained, and they may be sold or leased. The two titles mentioned above should give you ownership as good as a Chanotte.
IF YOU ARE OFFERED ANY OF THE THREE FOLLOWING TITLE DEEDS PLEASE BELIEVE US, THEY ARE NOT EVEN WORTH THE PAPER THEY ARE WRITTEN ON TO YOU.
The Sor Bor Kor is also a true title deed, accurately surveyed and pegged (like a Chanotte). But the big but is that they cannot be leased, sold or transferred.
Special attention needs to be given to the Sor Kor Nung, Tor Bor Tor Hoc and Tor Bor Tor Ha. They are squatter’s rights registered at the district office for a small fee. Unlike the Chanotte and the Nor Sor Sam, they cannot be legally sold, nor can you build on the land.
The taxes in Thailand are not comparable to the West. But currently Land Tax and Structures Usage Tax are claimed. The Land Tax levied on land is so miniscule that in practice the board charged to collect it, rarely bother to do so, and if they do, they usually wait several years until the amount is accumulated. The Structures Usage Tax relates to buildings and is collected by the municipal office or district office.
It is only applied to properties used for commercial purposes.
On all purchase/sale of property in Thailand there is a stamp duty of 0,5%, a transfer fee of 0,001%, a business tax of 0,11% levied against the owner who has been in registered possession of the property less than 5 years, and Income Tax. There is no Capital Gains Tax in Thailand, unlike many countries, and Income Tax (usually between 1.0 and 3.0%) on property is the comparable replacement.
There is another new Law change, there is a recent renewed law which makes it possible for a foreighner to be the only person listed on an Ltd., however this is only for big investments (50,000,000+) and they have to be approved by the BOI (Board of Investors) and is has to be proved by this Board that the investing capital will be of great benefit for the Thai Economy. So this is not ment for people who want to buy a House or a piece of Land, only for big investors abroad.
The information above is based on the educated opinion of Hua Hin Land And House Consultancy Co., Ltd., we cannot however be held responsible for any losses incurred by using the above information. We would however like to point out that as mentioned before if you use due diligence and professional services your property purchase would be an enjoyable and worthwhile experience.