The Ultimate Property Purchase Guide in Thailand
In Thailand, buying and selling real estate can be different and complex for foreigners because Thai land laws prohibit foreigners from owning land. This often requires foreigners who want to own houses, land, or condominiums to study and understand the laws before engaging in real estate transactions. Therefore, we prioritize providing basic consultations to our clients.
FAQs About Condominium Ownership in Thailand.
- Can a condominium building in Thailand be 100% foreign-owned?
No, according to Thai law, at least 51% of the condominium building must be Thai-owned. Foreigners can own up to 49% of the total floor area of all units combined.
- Can a Thai company own a condominium unit on my behalf?
While this practice was common in the past, new regulations aim to prevent the misuse of Thai nominee shareholders by foreigners. Thai law now prohibits the use of dormant holding companies for foreign ownership of condominiums.
- Can ownership of a condo be passed on to my children?
The right of foreign ownership of a condo in Thailand is granted to the individual foreigner, not to their successors. Foreign heirs who inherit a condo must individually qualify for ownership or sell the unit within one year.
- Can I buy a condo leasehold?
Yes, when foreign freehold ownership reaches the limit, remaining units may be leased to foreigners under a 30-year lease agreement. However, leasehold contracts in Thailand are considered personal tenancy contracts with limited transferability and other restrictions.
- Can I buy fractional ownership?
Fractional ownership typically involves unregistered leasehold apartments, not individual ownership of condominium units. These schemes usually offer interests in holiday apartments or hotel buildings.
- Can a foreign company own a condominium?
Yes, foreign juristic entities can register ownership within the 49% foreign ownership quota of a condominium, following certain procedures and requirements similar to those for foreign individuals.
- Is joint ownership with my Thai wife considered foreign-owned?
If the condo is registered in your Thai wife’s name or jointly between you and your Thai wife, it counts as full foreign ownership. However, there are exceptions if it can be legally proven that the funds used for the purchase are the Thai national’s personal property.
FAQs About Land Title Deeds and Property Rights in Thailand.
- What is a land title deed in Thailand?
A land title deed, issued by the relevant Thai government department, shows a person’s rights to land, such as ownership if it is a Chanote title deed, and any registered encumbrances like mortgages or leases.
- Can foreigners own land in Thailand?
No, foreigners are not allowed to own land in Thailand. However, they can hold certain rights like leases, usufructs, or mortgages, which can be registered in their name on the land title deed.
- What are the main types of land title deeds issued by the Land Department in Thailand?
The main types of land title deeds include Chanote (Nor. Sor. 4 Jor), Nor Sor Saam Gor (N.S. 3 G.), and Nor Sor Saam Khor (N.S. 3 K.), each offering different levels of ownership or possession rights.
- What is a Chanote and why is it considered the true ownership title deed?
A Chanote (Nor. Sor. 4 Jor) is a certificate of true ownership for land in Thailand. It is accurately surveyed, marked by unique numbered marker posts, and offers unrestricted ownership rights.
- What are other common types of land title deeds in Thailand?
Other common title deeds include Nor Sor Saam (N.S. 3), Nor Sor Saam Gor (N.S. 3 G.), Nor Sor Saam Khor (N.S. 3 K.), and Sor Kor Nung (1), each with varying rights and limitations.
- Can all types of land title deeds be upgraded to Chanote?
No, not all types of land title deeds can be upgraded to Chanote. The possibility of upgrade depends on factors such as the land’s location, type of title deed, and government regulations.
- What are the restrictions on certain types of land title deeds?
For example, Sor Kor Nung (1) land has limited rights and is mainly used for farming. It may be upgraded to a more secure title deed, but this is no longer possible with the Land Department.
- Are there any risks associated with certain types of land title deeds?
Yes, for instance, Nor Sor Saam (3) titles may lead to boundary disputes due to the lack of accurate surveyed boundaries, potentially affecting land transactions and ownership rights.
- What are the land documents issued by other government departments?
These include Sor. Por. Gor. 4-01 (S.P.G. 4-01), Sor. Tor. Gor. (S.T.G.), Por. Bor. Tor. 5 (P.B.T. 5), Nor. Kor. 3 (N.K. 3), and Gor. Sor. Nor. 5 (G.S.N. 5), each serving different purposes and subject to specific regulations.
- Can untitled land be upgraded to full title deed?
In certain circumstances, untitled land like Tor.Bor.Ha (T.B.5) may be upgraded to full title deeds, but approval is often difficult to obtain and may be subject to scams or irregularities.
FAQs About Owning Property Separate from Land in Thailand.
- Can foreigners own land in Thailand?
No, according to Thai law, foreigners cannot own land. However, they can own buildings (houses) separately from the land through specific legal arrangements.
- How can I own a house separate from the land in Thailand?
There are two main ways:
- Build a house on leased land, either with or without the right to use the land for a specified period.
- Purchase an existing house separately from the land and obtain a land lease.
- What is involved in transferring ownership of an existing house?
If you’re buying an existing house, the transfer must be in writing and registered with the local Land Department. This process typically involves a 30-day public announcement of the sale, followed by completion of the transfer by the Land Department.
- What is a Tabien Baan (House Registration Book)?
Tabien Baan is a government-issued booklet that records the official address of the house and the residents living in it. There are different types for Thai nationals and foreigners. The blue Tabien Baan is for Thai nationals, while the yellow one is for foreigners. Both record the official address and residents of the house, but the yellow one may not necessarily state the owner’s name for foreigners.
- How can I prove ownership of a house separate from the land?
Proof of ownership is usually established through a Thai construction permit issued by the local authority or an official Thai land office sale agreement in the case of transferring ownership of an existing house.
6. Are there any restrictions on owning a house separate from the land as a foreigner?
While foreigners can own houses separately from the land, it’s essential to comply with Thai property laws and regulations. It’s recommended to seek legal advice to ensure proper ownership and registration.
7. Can I rent out a house that I own separately from the land?
Yes, you can rent out a house that you own separately from the land. However, it’s advisable to review any lease agreements and ensure compliance with local rental laws and regulations.
- What happens if a Thai national acts as a nominee owner for a foreigner?
If a Thai national purchases land on behalf of a foreigner or acts as the agent in a land purchase, it could be considered a nominee ownership situation. While this structure is legal if the Thai national retains absolute ownership rights, both the foreigner and the Thai national could face fines or imprisonment if ownership rights are deemed to lie with the foreigner.
FAQs About Property Ownership in Thailand for Foreigners Married to Thai Nationals.
- Can foreigners married to Thai nationals own land in Thailand?
No, according to Thai law, foreigners married to Thai nationals cannot own land in Thailand or have ownership interest in jointly owned marital property.
- Is there any way for a Thai national married to a foreigner to own land?
Yes, the Land Department allows a Thai national married to a foreigner to own land as personal property after a joint statement with the foreign spouse declaring that the money used to purchase the land is the personal property of the Thai spouse.
- What does it mean for the land to be owned as personal property of the Thai spouse?
This means that the land (and sometimes a house or condominium) is purchased and registered solely in the name of the Thai spouse. It does not become jointly owned marital property between husband and wife (Sin Somros).
- How is ownership confirmed in such cases?
A certification letter is issued, based on the principle of section 1472 of the Civil and Commercial Code, stating that if personal property has been exchanged for other property (in this case, land), that property shall remain personal property of the Thai spouse.
- What rights does the foreign spouse have in this situation?
The foreign spouse has no direct ownership rights in the assets based on Thai family laws governing property between husband and wife. The Thai spouse appears as the sole owner and manager of the land.
- What happens to the land in case of divorce?
As the land is considered personal property of the Thai spouse, it is not automatically subject to division of assets according to divorce laws. However, legal advice should be sought to clarify specific circumstances and ensure legal protection.
FAQs About Usufruct Contracts in Thailand.
- What is a Usufruct contract?
A Usufruct contract is an agreement that grants the right to use or occupy another person’s real property for a specified term, typically up to 30 years or for the duration of the grantee’s life, whichever is shorter.
- How does a Usufruct work in Thailand?
In Thailand, a Usufruct gives the holder the right to use and manage a property during their lifetime, after which ownership reverts back to the original owner.
- Who commonly receives a Usufruct in Thailand?
Usufructs are often granted to family members, such as a foreign spouse, to ensure protection in case of the Thai spouse’s death.
- What is a Usufruct contract and how does it relate to married couples in Thailand?
A Usufruct contract grants the right to use or occupy another person’s real property for a specified term, often up to 30 years or for the lifetime of the grantee. It is commonly used to protect a foreign spouse in case of the Thai spouse’s death, allowing them to use and manage the property during their lifetime.
- What are the rights and obligations of a Usufructuary?
The Usufructuary, or the holder of the Usufruct right, has the right to use and manage the property but cannot sell it. They are also responsible for maintaining the property and must take normal care of it. Failure to do so may lead to termination of the Usufruct by the owner
- Can a Usufruct be terminated before the grantee’s death?
Yes, the owner of the property has the right to terminate the Usufruct if the Usufructuary fails to maintain the property or if there is a breach of the agreement.
- What happens to the property after the Usufructuary’s death?
After the Usufructuary’s death, ownership of the property reverts back to the original owner.
- Are there any legal implications or liabilities for the Usufructuary?
Yes, the Usufructuary is liable for any loss of value or damage to the property unless they can prove that the damage was not their fault.
- Is a Usufruct always the best option for protecting a foreign spouse’s interests in Thailand?
While a Usufruct can be a useful tool for protecting a foreign spouse’s interests, it may not always be the best option in certain circumstances. It’s important to consider all options and seek legal advice before entering into a Usufruct agreement.
FAQs About Buying Real Estate Through a Foreign-Controlled Thai Company.
- What is the practice of buying real estate through a foreign-controlled Thai company?
It was common practice for foreigners to form Thai companies to purchase land or condominiums beyond the foreign ownership quota in Thailand. This allowed them to legally acquire properties as long as the company had majority Thai shareholdings.
- Are there any recent changes to this practice?
Yes, the government is now restricting the illegal use of Thai companies and nominee shareholding structures by foreigners. New regulations for land offices and business registration departments require officials to prevent such unlawful practices.
- How do these regulations affect the process of buying property through a Thai company?
Under the new procedures, when a foreigner is advised to buy property in Thailand through a Thai company, the foreigner generally will not appear on the company formation documents initially. Only after the property has been transferred to the 100% Thai company will up to 49% of the shares be transferred to the foreigner.
- Why is using a Thai company formed as a front for foreign property ownership illegal?
Such practices lead to unlawful foreign ownership due to the purpose and Thai nominee shareholding structure. A company that owns real estate must appear to be a normal active business entity, conducting business activities, holding shareholder meetings, and complying with accounting and foreign business laws.
- Can a Thai company solely serve as a property holding entity for a foreigner?
No, a Thai company formed solely for the purpose of holding land on behalf of a foreigner, without engaging in any legitimate business activity, is illegal. It must operate as an active company and comply with all relevant laws and regulations.
- What are the risks of using nominee shareholding structures for property ownership?
Using nominee shareholding structures to conceal foreign ownership can lead to legal consequences, including fines and potential seizure of the property. It’s crucial to ensure compliance with all regulations and seek legal advice when purchasing property in Thailand.
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