A mix of rich culture, natural resources, vibrant economy, and great weather make Thailand a great place to own land as a foreigner. However, there are several restrictions put on foreign ownership of land to prevent land prices from getting out of hand and keep control of the land with the residents. Foreigners are not allowed to own land on freehold in their names. How then can foreigners buy property in Thailand? Here are options that you can pursue.
The law allows foreigners to lease land in their names for up to 30 years. Moreover, the law allows you to renew the property leases for up to three times in a row. Therefore, you can lease the land up 120 years. This is an ideal way of property in Thailand for foreigners for short-term investments. However, the renewal of the leases depends on whether the owner of the land agrees.
If you are looking for land for investment, you can lease land with a secured leasehold structure. In this case, you control the freehold land title through an offshore company. Through the company, you secure the renewal of the lease for the two consecutive terms through a contract. The contract enhances the security of your investment.
Buy a condominium
Buying a condominium in Thailand as a foreigner is an easiest and most straightforward method to invest in real estate. The Thailand Condominium Act allows foreigners to own up to 49 percent of the available condos on freehold. (This is about 49 condominiums in every 100 units). You can own these units in your name. However, you must request a Letter of Guarantee that is then transferred to the Land Department when the transfer of title is completed. By a freehold title deed (also called Chanote), it means that there are no time limits for the ownership of the property.
Purchase land through a Thai company
A limited Company registered in Thailand is legally allowed to purchase land in Thailand on freehold title. Foreigners are allowed to own up to 49 percent of the company and the rest owned by legal Thailand persons. The land is registered under the name of the company.
To ensure that the locals control ownership and use of land, a threshold of 75 percent vote when determining the use of land, can be added to the Articles of Association during the incorporation of the company. If the managing director of the incorporated company is a foreigner, there must be at least two other shareholders that are Thai nationals for the land purchase to be legitimate. The foreigner, who is the director, can also choose a 30-year lease on the land for himself for enhanced security of the property. This is the most common option for buying land for investment in Thailand for foreigners.
Residential investment in freehold land by foreigners
The Real Estate Law of Thailand allows foreigners to buy and own freehold land up to the size of 1600 square meters (also called one rai) and put up an investment of up to 40 million Thai Baht. However, the land must be used for residential purposes only.
Moreover, the investment must be in the form of government bonds or assets that are beneficial to the Thai economy. The ownership of the real estate land is not transferable through inheritance. Therefore, if you go for this option, the property cannot be inherited by your relatives and family members when you pass on.
Marrying a Thai spouse
You can buy land in Thailand as a foreigner if you are married to a Thai national. However, you do not get rights to the property. Therefore, you do not have any claim on the land. In addition, the land cannot be in your name but that of your Thai spouse.
You can also be made to sign a declaration at the Land Department that the funds used in the purchase of the land are separate funds of the Thai spouse. The land is not considered marital property. In case of a divorce, you cannot claim the property at the divorce court.
When buying property in Thailand as a foreigner, you can choose any of the above options for land ownership. Choose the option that provides the lowest risk for your investment.