Land and houses in Thailand
Foreigners may purchase houses in Thailand, but no land! There are only few exceptions for investors or by means of special permission.
In a condominium housing area, foreigners may be involved in up to 40% of the floor space. The land does however still belong to the communal housing
association of the condominium area. The foreigner must either prove that he has investor privileges, that has enough money originating from his homeland or possess or permanent residency permit.
The purchase of a condominium does however contain the following risks:
- The further maintenance of the building is sometimes neglected, which also lowers the value of the individual dwelling.
- If the remaining condominium units in the project do not sell well, a ghost town living situation can develop. Living as the only resident on a floor is surely not particularly pleasant.
- The temperature and noise insulation do not usually correspond to European standards. The floors of the dwellings have usually no sound-proof screens
and the walls are very thin and therefore also not sound-proof. Depending on the neighbours, you should reckon with noise and disturbances.
- If the operator of the housing area owns the majority of the housing units, the danger exists that he will constantly increase the living expenses for the units.
- If the builder goes bankrupt before completion of the project, all invested
costs are usually lost.
Therefore it is sometimes better to simply rent a condominium dwelling. Then you always have to possibility to move out if any problems surface.
If a fire breaks out in such a dwelling, the danger to your own life is considerably increased in comparison to a normal family house. For this reason, you should pay
special attention to fire protection measures, such as functioning smoke detectors and fire sprinklers, as well as secure escape routes.
Land acquisition by Thai marriage partners
If a Thai, who is married to a foreigner, wants to purchase land with a house, they must insure that the amount originates from their own personal means, or the foreigner must confirm that they will not try to stake a claim on the property in the
future. If the marriage should unexpectedly break up, the foreigner loses all investments made into the property.
The foreigner can safeguard himself with a 30 year rental contract (with extension option) which is entered in the state office’s land register. However it is still in question whether this popular financial safeguard will continue in this way. Since
2006 lots of state offices are refusing to enter rental and loan contracts among married couples in the land register.
As alternative to the lease contract, the Pattaya-Focus Nr. 16/2002 referred to the relatively unknown Renting Transfer Right Contract: The "Usufruct Contract". It is handled is the same way as the "30 years" lease specified above, however
possesses a lifelong validity. The lifelong validity makes inheritance impossible.
You should clarify any details with a lawyer.
Any loan agreements signed by a Thai marriage partner surely represent no considerable security. If the marriage partner is in debt (e.g. gambling debts) the house can taken to cover the costs. Then without any means, the loan agreement
might have to be used only for sanitary purposes.
Land acquisition by Thai Companies
As possession of land by foreigners is generally prohibited, many people tried to attain land by setting up a limited company. However, since a foreigner cannot attain the majority of shares in a Thai company, this idea is not quite so unproblematic. As a company is not usually managed actively and therefore never
excluded from the fact that the court lays out the validity of Thai law. With the purchase of land, the contract became ineffective. I have not yet heard of such a case. Apart from this, even an inactive company must keep accounts and tax records.
Examination of companies with foreign shareholders
In March 2001 the Thai press repeated that it was pointed out that the Thai
authorities want to examine all Thai companies with foreign shareholders and therefore preventing getting around the rules regarding non-acquisition of properties for foreigners. If this really does happen, remains to be seen, as the implementation of an authority measure often runs into a dead end.
All of the above information is provided without responsibility!