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Legal Advice

Can A Foreigner Own A Condominium In Thailand?

The simple answer is yes, you can. Under Thai Law, 49% of the internal area of a condo building, excluding the common areas, can be owned by foreigners. Buying a condominium is easily the simplest option available to foreigners. The only stipulation when a foreigner purchases a condominium, are that the funds used for purchase were received from abroad and this is recorded by the receiving Thai Bank, who will issue you a document called a Tor Tor Sam. The purchases of condominiums by foreigners come under the jurisdiction of the Condominium Act B.E. 2535 (1992).
The owner of each condominium is issued with a title deed of ownership (Chanote) which also states the certified property area (which here also includes the balcony, if any.

What Is A Tor Tor Sam?

A Tor Tor Sam (3) is the official bank document issued by the receiving bank upon the receipt of foreign currency into your bank account in Thailand. It is important you request a Tor Tor Sam from your bank when you have remitted funds for the purpose of purchasing property. The Tor Tor Sam must clearly state that the remittance transferred is solely for the purpose of purchasing property.

Can A Foreigner Own A House And Land In Thailand?

Although Thai law prohibits foreigners from owning land in the country, there are certain ways in which you can establish the controlling interest in a Thai registered limited Liability company that owns the land or you can own a lease for the land in your, which will comply with existing Thai laws. Ownership of land in Thailand is governed by the Land Code, the Land Reform and the Agriculture Act BE 2518 (1975)

Limited Liability Company

This is the most popular way of purchasing property with foreigners as the Articles of Association can be set up to allow greater protection for the foreign minority shareholders as the majority Thai ownership (as required under the Alien Business Law) of 51% of the shares should be held by Thai juristic persons. Any company with more than 40% foreign owned shares that purchases land will be investigated by the Central Land Office to ensure that the company has not been set up in an attempt to circumvent the laws that prohibit foreign ownership of land. Therefore this results in the foreign ownership of the company being limited at 39%, but with changes to the Articles of Association, the foreigner can be the sole director of the company and the only official of the company who can sign for any contractual effects, giving the minority shareholder total control over the company.

Nominee Lease

It is possible you can use a Thai nominee to purchase the land and have a legal 30 year lease on the house and a possible additional lease of a 30 year + 30 year option from the nominee. The only drawback to this lease is the fact that the parties can contractually agree to renewals, by means of a separate contract, but this contract cannot be registered at the Land Office and is not effective against a purchaser of the property. The lessee cannot sublease, sell or transfer his interest (without the lessor’s consent). The original registered lease agreement remains in force and is effect even if the property is sold.

Mortgage With Nominee

This is also proving a quite popular method for the foreigner who can use a Thai nominee to purchase the house and land by taking out a mortgage (registered with the appropriate land department office) on the property in the Thai nominee name and making a 30 lease agreement in your favour. In some cases the Thai courts have ruled that this was not a bona fide mortgage but a way to circumvent the land ownership laws of Thailand prohibiting foreigners owning land. It is important to note that only the owner of the land is entitled to mortgage the land; the lessee of land does not have the same privilege.

Can Thai Wife’s Own Land?

Prior to 1998 a Thai woman who married a foreigner would automatically lose her right to purchase land in Thailand, however she could retain any land that she owned prior to marrying the foreigner. In 1999 the regulation changed to allow Thai national's married to foreigners the right to purchase land but the Thai spouse must be able to prove that the money used to purchase the land is legally and solely hers with the foreign spouse having no claim to it. It is usual for the foreign spouse to sign a declaration stating that the funds used for the purchase of property belonged to the Thai spouse prior to the marriage and he has no claim to the money.

Are There Land Title Deeds in Thailand?

The Title Deed (known as the ‘Chanote’) is the certificate of land ownership. It ensures an easy but effective property transfer with one original being kept in the District Land Office where the registration of property transfer takes place and the other original being given to the new owner of the property.

How is Property Valued in Thailand?

Thailand has no central property valuation system as used in European countries, any valuations are usually carried out by the real estate offices who generally have the data to compare like for like in the area.

What Are The Costs Payable When Purchasing a Property?

These figures are for guidance only as the Land Office, where property transfers take place, do increase and decrease these rates with minimum notice. There is stamp duty of 0.5%, transfer fee 2%, business tax  03.0% which is levied against the owner if he has been in possession of the property for less than 5 years and finally withholding tax of 1% of the Government valuation or the value declared at the Land Office, whichever is the higher. At the moment there is no Capital Gains Tax to pay. Who pays the above costs? Usually these are split on a 50-50 basis between the seller and buyer however this is part of the final sales price negotiations!

Legal Advice

If you are planning to purchase real estate in Pattaya or Jomtien in which to live, or as an investment, we strongly recommend that you seek the services of an independent and qualified lawyer, as the Thai property laws relating to property and land ownership are very different to those from your home country.

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