Types of Buying Property in Thailand

Thailand’s property market is attractive for both local and international investors due to its beautiful landscapes, robust tourism sector, and relatively affordable real estate prices. However, purchasing property in Thailand involves navigating a unique set of rules, especially for foreigners. Understanding the different types of property ownership and buying structures is crucial before making any investment.

This article explores the main types of buying property in Thailand, including the legal framework for foreigners, forms of ownership, and practical considerations.

1. Freehold Ownership

Freehold ownership is the most complete form of ownership in Thailand and is typically available only to Thai nationals and Thai companies. It allows the buyer to own the property and the land outright indefinitely, with full legal rights to sell, lease, or transfer the property.

For Thai Nationals:

• Thai citizens can freely own land, houses, and condominiums under freehold title.
• Ownership is registered at the Land Department, with a Chanote (title deed) issued.

For Foreigners:

• Foreigners cannot own land under Thai law, but they can own buildings (like condominiums or villas) constructed on leased land or through other legal mechanisms.

2. Condominium Ownership (Foreign Freehold Quota)

One of the most straightforward ways for foreigners to own property in Thailand is by purchasing a condominium unit. Under the Condominium Act B.E. 2522 (1979), foreigners can own up to 49% of the total saleable area of all units in a condominium building.

Key Conditions:

• The funds must be remitted from overseas in foreign currency and properly documented.
• The buyer must obtain a Foreign Exchange Transaction Form (FETF) from the bank.
• Ownership is registered at the Land Office, granting full title (freehold) to the foreigner.

This option is ideal for foreign investors or retirees looking to own property in popular urban or resort areas such as Bangkok, Phuket, Pattaya, or Chiang Mai.

3. Leasehold Ownership

Leasehold is a widely used legal structure for foreigners who wish to use land or property long-term without owning it outright. Thai law allows a maximum lease term of 30 years, which can be renewed (though not automatically guaranteed).

Common Applications:

• Leasing land to build a house
• Leasing villas or houses within gated communities
• Leasing commercial spaces for business

Key Features:

• A registered lease must be executed in writing and registered at the Land Department.
• Lease agreements can include renewal clauses (e.g., 30 + 30 + 30 years), but these are not legally binding unless re-registered each time.
• The lessee cannot mortgage, sell, or sublease the property unless the contract allows it.

Leasehold arrangements are popular among foreign retirees and long-term residents who want property control without navigating company ownership structures.

4. Buying Through a Thai Company

Some foreigners opt to purchase land through a Thai majority-owned company, allowing indirect control over freehold land. This method is legal but heavily scrutinized to prevent misuse.

Key Conditions:

• The company must be a legitimate business with Thai shareholders holding at least 51% of shares.
• The business must be active, and not set up solely to acquire property (which is illegal under Thai law).
• Foreigners may act as directors and control decision-making via preferred shares or other corporate structures.

Risks:

• The government monitors “nominee” structures and may dissolve companies not conducting real business.
• Legal and tax compliance is crucial.
• Ownership is indirect, and disputes among shareholders can create complications.

Professional legal advice is essential when using this method to ensure the structure is legitimate and compliant with Thai laws.

5. Usufruct and Superficies Rights

These are civil law rights that offer alternatives to leasehold for foreigners seeking long-term use of land or property.

Usufruct:

• Grants the right to use and benefit from someone else’s property for life or a specified term.
• The foreigner can live in or rent out the property but cannot sell or transfer it.
• Typically lasts up to 30 years or for the lifetime of the usufructuary.

Superficies:

• Grants the right to own buildings on land owned by another person.
• Ideal when a foreigner wants to own a house built on land leased or owned by a Thai spouse or partner.

Both rights must be registered at the Land Department to be legally enforceable and are often used in family or long-term partnership arrangements.

6. Buying Through a Thai Spouse

A foreigner married to a Thai national may acquire land through their spouse, but there are specific legal requirements to ensure compliance:

• The foreign spouse must sign a declaration stating they have no rights over the land.
• The land is registered in the Thai spouse’s name only.
• The property remains separate (personal) property of the Thai spouse unless it is agreed otherwise.

This method poses a risk to the foreign partner if the marriage ends, as the land remains in the Thai spouse’s legal ownership.

7. Off-Plan and Pre-Construction Purchases

Foreigners and Thais can also buy off-plan properties, usually condominiums, directly from developers before construction is completed. This method offers:

Benefits:

• Lower prices and flexible payment plans
• Opportunity to choose units, finishes, and designs

Risks:

• Delays or project cancellations
• Incomplete or changed specifications
• Issues with title transfer or foreign quota compliance

Due diligence on the developer’s track record and legal status of the project is critical.

Conclusion

Buying property in Thailand offers a range of opportunities for both Thai nationals and foreigners, but it also comes with unique legal complexities. Foreign buyers, in particular, must carefully consider which type of ownership suits their needs and complies with Thai law.