Thailand property laws: rights and risks when buying

Thailand’s property laws require distinguishing between a unit in a registered condominium, a separate building and a plot of land. A foreigner may consider ownership of a unit if the registration conditions are met; rights to a house and land must be assessed separately. A lease gives the right to use the property, but does not make the lessee an owner.

Start with a simple question: exactly which right are you being offered for the stated price? An advertised name such as “villa” or “apartment” does not explain this. Below we cover the foreign quota, the investment exemption for land, lease terms, bank documents and the costs of transferring the right.

Conditions may change. Before the deal, confirm the current conditions with the relevant authority and an independent lawyer. This will help match the seller’s promises to the documents, understand the restrictions, and agree on refund terms before a deposit is paid.

What foreigners can own outright

The Varsovia Estate property overview describes the possibility for a foreign citizen to own a unit in a condominium outright, provided the foreign share limit by area is observed. Whether this option applies to the chosen unit and the specific buyer must be checked before payment.

The property and the right are different parts of the offer. Ask the seller to state the legal status of the property and show the documents on which the right will be registered in your name.

For a condominium, ask for documents explaining what belongs to the unit as separate property and what rights attach to the common property. Do not treat these as a separate plot held in personal ownership. For a villa, also separate the documents for the building and the land.

The general sequence is explained in the guide “buying property in Thailand”. Comparing property types in Thailand is useful even before discussing price: similar-looking properties may be offered with different rights.

Which laws govern property and contracts

Thailand’s property laws cover several separate issues. Land regulation concerns the basis for holding a plot, and condominium regulation concerns units and common property. Contract issues relate to payment, leasing and the parties’ obligations, while corporate issues relate to the involvement of a company.

The main acts are called: Land Code (B.E. 2497 — 1954) — land ownership; its Chapter 8 restricts foreigners’ rights to land. Foreign Business Act (B.E. 2542 — 1999) sets out which activities foreigners and companies with foreign participation may engage in. Official English translation of the Land Code is published by the Department of Lands, the report on applying the Foreign Business Act — Department of Business Development.

The Varsovia Estate property overview links foreign ownership of a unit to the Condominium Act. The name of the law alone is not enough to assess a deal: a lawyer needs to identify the parties, the property and the type of contract.

Ask for the documents to be reviewed stage by stage:

• the reservation and deposit terms;
• the preliminary agreement and obligations before the property is transferred;
• the final payment and the conditions for the seller to receive it;
• the registration of the chosen right;
• whether the prescribed form of contract with the developer applies to the parties and the type of transaction.

A document’s title does not replace its content. Ask for an explanation of what obligations arise after each contract is signed and what happens if the next stage does not take place.

A clear translation helps match the property description, payments, refunds and the parties’ liability. Check that the language versions match and ask for any discrepancies to be explained before signing. Requirements from the description of a separate administrative procedure should not automatically be applied to every sale.

The 49% quota: floor area of units and confirmation before the deal

The Thai government portal describes the limit on foreign ownership in a condominium: it must not exceed 49% of the total floor area of units. The quota is measured by floor area, not by the number of units or buyers. Counting foreign surnames on the list of residents does not confirm it.

The government guidance on transferring a unit requires a letter from the condominium’s management company confirming the foreign share. In the procedure described, this letter is submitted to the Department of Lands. An oral assurance from an intermediary that “there is room in the quota” does not replace such a document.

Before making a reservation, request:

• information about the unit and its registered owner;
• the allocation of floor area and documentary confirmation of the foreign share;
• an assessment of whether the transfer to the chosen buyer can be registered;
• a list of documents needed for registration;
• the terms for refunding the deposit if the transfer turns out to be impossible.

It is easy to make a mistake here: the same number of units does not mean the same floor area. That is why the foreign quota in a condominium requires documentary verification, not a rough count.

If the quota is used up, do not draw a general conclusion about every transfer between foreign owners. Consider the specific unit, seller and buyer. If a lease is offered instead of ownership, compare the terms again: the right being acquired changes, even if the advertised price and the property’s name stay the same.

Land: restrictions and the investment exemption

Foreign land ownership is restricted, so buying a plot cannot be assessed under the same scheme as buying a condo unit. But the claim that “there are no exemptions” is also wrong: the Thai government portal describes an investment exemption.

The explanation of this exemption lists the conditions:

• investment of at least 40 million baht;
• use of the plot for residence;
• area of no more than one rai;
• approval from the Minister of Interior.

A separate published government explanation specifies maintaining the investment for at least five years. This period must be considered together with the other conditions and the permit procedure, not as independent confirmation that a purchase is possible.

Meeting the amount does not mean automatic approval. Before taking on any financial commitments, ask a specialist to assess the permitted investment instruments, the requirements for keeping the investment in place, the characteristics of the plot and the sequence for obtaining permits. The result should be a clear explanation of the basis for acquisition in your specific case.

Do not confuse this exemption with grounds linked to the Board of Investment (BOI). If an agent refers to a special regime, ask them to name it and explain whether it applies. For a house on someone else’s land, separately examine the right to the building and the right to use the plot: buying the building alone does not answer the land question.

Long-term lease (Leasehold): term, registration and extension

A long-term lease gives the right to use the property on the terms of the contract. Assess the term, permitted use and circumstances for ending the lease alongside the price. A lease does not create ownership of the property.

The lease under the Civil and Commercial Code is described in the Department of Lands guide on registering leases. The guide provides for a term of up to 30 years, the possibility of a following period of up to 30 years, or an option for the life of the lessor or lessee.

The procedure described provides for registering leases longer than three years. Documents are submitted to the land office responsible for the area where the land or building is located. The consequences of a specific registration must be assessed under the contract and the applicable rules.

Before signing, go through:

• what registration and documentation are required;
• which uses of the property are permitted;
• whether the lease can be assigned and the property sublet;
• what happens if the owner of the land changes;
• how the death of a party will affect the contract;
• which terms apply to the next period;
• what will happen to the building and improvements after the right of use ends.

A promise of renewal is not the same as an already formalized right. Ask for the current term to be separated from obligations that must be fulfilled later. Extending a lease in Thailand requires reviewing the contract terms and possible changes to the parties, not just an advertised general term.

If you plan to build a house, discuss in advance the permitted works and how the right to the building relates to the lease of the plot. Do not assume that all rights will be preserved automatically after the contract ends.

Superficies (right to a building) and Usufruct (use of property)

The Global Law Experts legal overview describes superficies as ownership of buildings or structures on someone else’s land. Usufruct is the right to possess, use and receive the fruits of another’s property, that is, to derive benefit from its use.

The Civil and Commercial Code of Thailand addresses superficies in Sections 1410–1416 and usufruct in Sections 1417–1428. The Department of Lands registers both rights; according to its handbook, superficies is established for a term of no more than 30 years or for the lifetime of the landowner or right holder (the department’s handbooks are in Thai: on superficies and on usufruct).

These instruments answer different questions. Neither definition means ownership of the land and neither describes the full registration procedure. The conditions for the chosen property should be examined separately.

The table helps you frame questions for a specialist; it does not set the same terms for every transaction. Ask for permitted actions to be explained in plain terms: living in the property, construction, renovation, letting, sale or transfer of the right.

If a right to a building is combined with a land lease, compare the documents. Examine how the termination of each right affects the other. The combination of instruments itself does not guarantee “double protection” or automatic transfer to heirs.

Thai company: why shareholding percentages are not enough

Buying property through a Thai company requires a separate assessment of the corporate structure and the land transaction. The distribution of shares by itself does not confirm that acquiring land is permitted or that control over the property is expected.

The rights of the company and the rights of a shareholder must be kept separate. Find out who will own the property, what the company member receives, and what document secures their use of the house.

Include the following in your review:

• restrictions that apply to the company and its activities;
• the actual participants and their roles;
• the source of funds of the participants and the company;
• the authority of directors and the decision-making process;
• property documents and the seller’s authority;
• company obligations that could affect the property;
• the terms for changing participants, management and exiting the structure.

Do not accept the proposal of nominal shareholders as a sufficient solution to the land question. Ask directly: who puts in the money, makes the decisions and bears the obligations? The answers must match the documents and the participants’ actual relationships.

The absence of dividends, considered on its own, should not be taken as proof of nominal status. The structure and activity as a whole must be assessed. If your goal is to live in the house, also ask for an explanation of the consequences of a corporate dispute, a change of director or a sale of shares for your right to use the home.

Money transfers and bank documents for buying a condo

Start preparing payment before sending any funds. The expat portal Expatica describes the requirement for proper confirmation that money for the purchase arrived from abroad in foreign currency to register foreign ownership of a condo.

This explanation does not establish a single form of document for all buyers. Treat the foreign exchange transaction (FET) document, the proof of payment for registration and the bank’s customer due diligence check as separate matters to agree on with the bank and a lawyer.

Recommended order of preparation:

1. Before the transfer, tell the receiving bank the purpose of the payment and agree on a suitable route.
2. Before paying the seller, discuss with your lawyer the documents needed to register the chosen purchase.
3. Check the buyer’s name, the parties to the transfer, the recipient and the purpose of payment.
4. Once the funds arrive, obtain confirmation of the transaction and match it against the contract.
5. Before registration, assemble the contract, bank documents and payment confirmations into an agreed set.

Do not postpone agreeing on documents until registration. If money is sent by another person or the payment is split into parts, examine in advance how to confirm the link of each payment to the buyer and the unit. Ask the bank and lawyer to explain how to reflect this link in the documents.

The practical preparation is continued in the guide “transferring money to buy property”. Keep confirmations of sending, receipt, currency conversion and payment to the seller. No single route from Russia is assumed here for every transaction: agree on an available option with the receiving bank.

Taxes and fees on transfer of property

The property price and registration costs are different parts of the budget. Fees on buying property in Thailand must be assessed for each specific transfer, taking into account the seller, the tax base and the contract terms.

The Thai government portal lists the base transfer fee and the rate of the Specific Business Tax. The Revenue Department explains the stamp duty procedure and its relationship to the Specific Business Tax.

According to the Revenue Department’s explanation, when the Specific Business Tax is paid, no stamp duty is payable on the transaction. Do not add up all the rows of the table into a single overall rate.

Reduced transfer fee of 0.01%

Reduction of the transfer fee from the usual 2% to 0,01% is described in a government announcement on the conditions for the reduced fee. The recipients of the measure are buyers who are individuals with Thai citizenship acquiring their own home.

The announcement sets out the following limits:

• the sale price of the housing does not exceed 7 million baht;
• the assessed value of the housing does not exceed 7 million baht;
• the mortgage obligation under the contract does not exceed 7 million baht.

This reduction must not be automatically included in the calculation for a foreign buyer. Before registration, confirm the current conditions of the measure and whether it applies to the parties to the transaction.

For the final calculation, ask for the Specific Business Tax base, any possible exemptions, any withholding tax and other transfer-related payments to be determined. Record the allocation of costs in the contract: a promise that “fees are included” must be accompanied by a list of the payments covered.

For a separate review, see property taxes in Thailand. Plan annual taxes and building upkeep separately from the costs of transferring the right.

Inheritance, sale and use of the home

It is better to discuss the future of the property before buying. A unit, land, a lease, superficies and usufruct each require a separate assessment of the consequences for inheritance and transfer. A casual name such as “my house” does not explain which right has been registered.

For each right, put these questions to a specialist:

• who will be able to receive it after the death of the owner or a party to the contract;
• which restrictions may apply to a foreign heir;
• which documents will be needed for registration;
• how the contract deals with the death of a party and the transfer of the right;
• what will be required for a sale;
• which powers can be delegated to a representative;
• how a will relates to other family documents.

Do not reduce inheritance of a unit to a single quota check. For land, do not set a general sale deadline in advance without defining the basis and the start of its countdown. For leases and separate property rights, ask for a standalone explanation of the consequences.

If the owner will be away for a long time, plan for storing contracts and payment confirmations, maintenance, contact with the management company and the representative’s authority. Assess possible rental of the home based on the right to the property, the contract and the applicable restrictions. It is useful to agree on a management plan before leaving.

The right to property and visa stay conditions are separate matters. Do not use the fact of purchase as evidence that the requirements of a visa program have been met. The possibility of residence must be assessed on its own terms.

How to check the property and contract before the deposit

Checking property in Thailand should produce a clear result: which right can be registered, which restrictions remain and under what conditions you transfer money. An independent lawyer when buying property helps examine these questions; here, such support is a practical recommendation.

Agree on the scope of the check and get an explanation of the results. The actions in the table below are also recommended for preparing the deal and do not set a universal mandatory set of documents.

For a house, separate the documents for the land, the building and the use of the plot. Do not replace the title check — the document establishing the right to the property — with a review of a website or a copy from an intermediary. Ask where the encumbrance information was verified and which questions still require documents.

Project and intermediary

For a completed property and a project under construction, find out which permits and environmental documents apply. When buying from a developer, check its documents, payment schedule and liability for non-performance. The track record of completed projects may supplement the check but does not replace the documents for the chosen property.

If an agent is involved, look into how to choose a real estate agent in Thailand. Find out whom they represent, what they are paid for and what authority they hold.

Contract and money

Before the deposit, match the property description with the promised right, get a clear translation of the contract and check that the versions correspond. Agree on payments, bank documents, costs and refund if registration is impossible.

Escrow can be considered as a mechanism for releasing money after agreed conditions are met. Check the provider, how funds are held, and the grounds for payment and refund: the name alone does not guarantee protection from every dispute.

Do not pay a deposit based only on verbal assurances. The general process of buying property will help link the checks to the stages of the deal.