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Can I own land and house in Thailand?
- Land ownership is governed by the Land Code BE 2497 (1954), the Civil and Commercial Code, the Land Reform for Agriculture Act BE 2518 (1975) and the regulations issued by the Ministry of the Interior. Although you can own a house or structure in your own name, Thai law does not allow foreigners to own the land the building is erected on. However there are a number of ways in which you can circumvent this rule:
- Invest in a private Thai limited company. This involves the incorporation of a private company of which the foreigner holds a maximum of 49% of the shares. The remaining 51% of the shares must, according to Thai law, be held by Thai nationals.
- Become a Thai resident or citizen
- Invest in a new export oriented Board of Investment (BOI) approved company. The most you can currently own freehold is one Rai of land (1600 sqm.)
- Make an approved investment of 40 Million Baht or more, which has to be maintained for a specific number of years.
- 30 year lease with the option of renewal. This can be done by taking out a registered 30 year lease (residential) to the foreigner in the foreigner’s own name with pre-paid options to renew for two further periods of 30 years each. The foreigner could also be given the option to purchase the land, in case the law in respect of foreign land ownership rights changes. Under Thai law, a foreigner can own the building (for example a house) erected on the land. In order to be enforceable, any lease for a period of more than three years must be registered at the respective land office. There is a registration fee and stamp duty applicable, based on a percentage of the rental fee for the whole lease term. The originally registered lease remains in force and effective even if the property is sold.
In what situation is it possible for foreigners to purchase land in Thailand?
- The Board of Investment (BOI) may grant a foreign-owned company permission to own land if the proposed use of the land is for any activity promoted by the BOI. Prior to the purchase, the BOI must inspect the land and the construction plans, and agree that the land is suitable for the promoted activity. After the land has been bought, it may only be used for that activity and, in the event that the business conducting the activity stops operating, the land must be sold within one year of that date. Another benefit of this BOI promotion is that businesses which have been granted the right to own land under these conditions may also be eligible to conduct other business activities that would otherwise be restricted to foreign individuals and juristic persons.
Can I personally own a Condominium in Thailand?
Buying a condominium would be the simplest and easiest way for foreigners to buy property. Purchases of condominiums by foreigners come under the jurisdiction of the Condominium Act B.E. 2535 (1992).
Foreigners can own Condominiums in their own names, provided that the total number of foreign held units does not exceed 49% of the total number of units in a particular condominium block.
The money used to buy the condominium should be remitted from abroad in foreign currency to a bank in Thailand, (in the name of the person that will be registered on the title deed), with the remark „to purchase a condominium“. The prospective buyer should also obtain a “Thor Tor Sahm” form from the bank where the transferred money arrives.
The owner of each condominium obtains a certificate of unit ownership.
What are the Service Charges (maintenance fee) for Condomoniums?
Service charges are rather low in Thailand. They are used to maintain the common areas of the building like lifts, pools and corridors.
Also the sinking fund that is set up when the condo units are initially purchased, is in many cases replenished by the service charges which are payable every year.
Service charges are quite moderate, however, they vary considerably according to the degree of luxury provided by the existing infrastructure.
What should I look for in a property?
Are there property taxes in Thailand?
- There are no property taxes as such in Thailand that are exactly equivalent to the property taxes in the west, however, the most comparable taxes on properties in Thailand are the Land Tax and the Structures Usage Tax. The Land Tax levied on land is so miniscule, that in practice the body charged to collect it, rarely bothers to do so, and if they do, they usually wait several years until the amount accumulates. The second tax, the Structures Usage Tax, relates to buildings, is collected by the municipal office or district office, and is only applied to properties used for commercial purpose.
What taxes and costs are applicable for purchasing a property?
- On all purchase/sale of property in Thailand there is a stamp Duty of 0.5%, a transfer fee of 2%, a business tax of 3.3% levied against an 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 - 3.0%) on property based upon the Government evaluated price. There are no set rules on who pays the income tax, and it is just another part of the bargaining process, as with all the other costs of the transfer of ownership.