Thailand has always been a popular place for tourists, with Phuket being the centre of attraction for prospective house owners.
Phuket offers a lot of sunshine, beaches and a serene view to the young generation with wild parties and adventure. However, Phuket also offers a peaceful lifestyle with just as much adventure to retirees looking to relocate and look for a new place to call home. the same can be said for Investors too as Thailand offer great property opportunities, to make high returns on property investment and currently, investors are the main audience for the Thai real estate market.
Top Ways Foreigners Can Legally Own Property in Thailand
With the help of an agent and a lawyer to smooth things over, it is possible for foreigners to own real estate in Thailand as per the laws. This being said, there are a few rules and regulations to keep in mind as some types of properties can be owned, while others cannot.
Freehold Ownership of Condominiums
Freehold Condominiums are the most popular choice for foreigners looking to invest in property. This is because as per the laws of the country, up to 49% of any and every condominium unit can legally be sold to buyers from foreign countries. If the condo units abide by the laws of the set percentage, then anybody can own the purchased condo permanently until the day they decide to sell it.
Not only can you as a foreigner legally hold the title to the condo but you will also be entitled to a benefit known as “fractional interest.” This empowers you to have small ownership of all common and shared areas, as well as have a vote in the homeowner’s association.
Freehold Ownership of Condominiums
Freehold Condominiums are the most popular choice for foreigners looking to invest in property. This is because as per the laws of the country, up to 49% of any and every condominium unit can legally be sold to buyers from foreign countries. If the condo units abide by the laws of the set percentage, then anybody can own the purchased condo permanently until the day they decide to sell it.
Not only can you as a foreigner legally hold the title to the condo but you will also be entitled to a benefit known as “fractional interest.” This empowers you to have small ownership of all common and shared areas, as well as have a vote in the homeowner’s association.
What are Condotels?
For most buyers, Condotels are the best of both worlds as they combine the freedom and structure of Condominiums with the facility and convenience of a hotel. This perfect property investment is both safe and legal to own by foreigners provided a few things are kept in mind.
The first is that buyers who would like to invest can purchase any selected individual condotel and then rent it out as per that hotel’s accommodation. This statement implies that owners can typically use the condotel to stay in for 2 weeks to a month at max every year and for the rest of the calendar days, the condotel is rented by the hotel as part of their hotel’s establishment.
Condotels are one of the few investment opportunities that either offer a guaranteed return or entry via an organized pool system. This organized method is known as a rental pool system, wherein the owners combine their own rental income and then take a share of it as per the rules and regulations of the rental pool. There are many companies that choose to rent out Condotels from foreign property owners, and Airbnb is one of these options.
Own Luxury Properties in Thailand
A Luxury Property is better known as a branded residency and can be in the category of either private villas or luxury Condominiums. According to the local legal laws of this tropical country, the Thai owner’s percentage must be 51% while the foreigners owned percentage can be at a very maximum of 49%. This would also make luxury branded properties eligible to be called Freehold properties.
Branded property investments come in a package deal with top builder names, the best of fixtures, fittings, crème da la crème amenities and many more premium perks. This investment is ideal for high-net-worth buyers and can also be combined with the luxury Condotels option, provided the rental pool system is adhered to.
Condo Purchase Through Offshore Investment Firms
In the whole of Thailand, most buyers that are seeking to buy condos through Offshore investment banking establishments often choose British Virginia Island for good reasons. This island offers low operational costs, and competitive pricing for properties and has a top-notch reputation for hiccup-free administration.
Foreign buyers who are considering an investment in Thailand’s real estate market for the sole purpose of inheritance planning often choose to buy through Offshore Investment Firms. Keep in mind that if you ever wish to choose your investment then this is a cinch. You can do this effortlessly through offshore company shares that will be directly transferred to the new buyers.
Landed Houses, Town Houses and Other Properties
While foreigners are allowed to own many types of properties, land can only be owned legally by the citizens of Thailand. Landed properties refer to houses built on sand, soil, ground, and rocks in Thailand in the form of houses, townhouses and individual villas. These properties are not part of a commercial establishment such as Condotels or not part of shared establishments such as Condominiums.
The only exception to this rule, which is in reality a workaround, must be done legally and correctly with the help of advisors who know the laws immaculately. The workaround is to set up a Thai company that follows all set legal norms. The firm has to be a money-generating legitimate business that has Thai shareholders. The shareholders should also be legit investors and hold a 51% share of the landed property that is bought through the firm.
If you go ahead with this option, ensure to find both legal and real estate aid through solicitors, lawyers and professionals who are well-versed in this form of property investment. This investment option can be worth your time provided it is done in the right manner without taking any shortcuts.
Leasing Properties, Plots and Land
Leasehold properties allow foreigners the peace of mind and satisfaction of staying in Thailand in their chosen property as long as the lease is valid. Leasing basically works for leasing the land on which freehold property is built. Through this option, foreign investors can lease the land or plot and build their perfect home on it while they are in the country.
Keep in mind that you can lease land for 30 years at maximum.
Secured Property Leases
This option in Thailand is better known as collected leases as well as protected leases. This gives the right to foreign investors to legally agree to a lease while at the same time signing the sale and purchase agreement with the local land or property developing company.
This usually works by the Thai company developing a series of collections of villas, that are later on leased on to foreign property buyers. In a nutshell, it can be said that the foreigners who have chosen to lease such properties collectively pool and own the shares of the offshore establishment. Under this option, no guaranteed lease renewals are allowed and Thai Shareholding laws have to be followed to the letter by foreigners at all times.
This implies that foreign investors sign a 30 years lease contract, and the offshore establishment has a small shareholding in the lessor’s firm. This in turn gives foreign buyers a say and voice, that can be used to direct the Thai company’s directions in all property matters. This in turn can ensure renewal and well as succession rights to the buyer. Keep in mind that secured leases tend to get challenged in court as per Thai laws so choose this option only if you have excellent legal and real estate aid on your side.
Secured Property Leases
This option in Thailand is better known as collected leases as well as protected leases. This gives the right to foreign investors to legally agree to a lease while at the same time signing the sale and purchase agreement with the local land or property developing company.
This usually works by the Thai company developing a series of collections of villas, that are later on leased on to foreign property buyers. In a nutshell, it can be said that the foreigners who have chosen to lease such properties collectively pool and own the shares of the offshore establishment. Under this option, no guaranteed lease renewals are allowed and Thai Shareholding laws have to be followed to the letter by foreigners at all times.
This implies that foreign investors sign a 30 years lease contract, and the offshore establishment has a small shareholding in the lessor’s firm. This in turn gives foreign buyers a say and voice, that can be used to direct the Thai company’s directions in all property matters. This in turn can ensure renewal and well as succession rights to the buyer. Keep in mind that secured leases tend to get challenged in court as per Thai laws so choose this option only if you have excellent legal and real estate aid on your side.
Landed Properties with Joint Declarations
As a foreigner, if you are married to a lady of Thai origin and citizenship then you cannot co-own land. This, however, also means that your wife can buy property in the name of your spouse, provided both spouses sign a legally abiding joint declaration that the funds used to buy the land were entirely your Thai spouses.
The flip side is that your Thai spouse can choose to legally rent out, lease or sell the land without your consent. The best way to ensure that you can stay on the property without a hitch is to take the land on lease from your wife for a 30-year lease term. This will give you the right to stay in the house without any legal issues as long as the lease is valid. It is important to note that the agreement can opt to void the agreement in as less as 12 months from the start date.
Buy Landed Properties Through Thai Friends
If you have Thai friends that you trust and are willing to buy a property for you to stay in then this is an option as well provided some things are kept in mind. The first is that the money has to be invested by a citizen of Thailand, the second is that foreigners cannot legally own the deed to the land, and the third is that your Thai friend can choose to rent, lease, sell, dispose of the property at any time without your consent.
Also, keep in mind that this option is considered not completely legal thus if the authorities are alerted about this then your Thai friend would be considered an illegal and invalid nominee as per Thai laws.
You can choose to lease out the property from your Thai friend for up to 30 years to ensure that your investment is safe and that you are not evicted from the property as long as the lease is valid.
Exceptions to Owning Landed Property In Thailand By Foreigners
As per Thailand’s Land Code Act, any foreigner who has the resources to make a Prescribed Investment of a minimum amount of 40 million Thai Baht can legally own up to 1 Rai of land. This can be done with the help of an offshore establishment as well.
Another exception is that, if any foreigner promotes a business or chooses to invest a large sum in Thailand through the Board of Investment is guaranteed a special privilege of owning land.
A must-known fact is that this privilege is given through the Investment Promotion Act to the business and not the individual who is promoting or investing in the business. Foreigners who choose to utilize the Board of Investment option for owning land are in fact additionally given legal control of the chosen property.
This is a lot to take in and digest, buying property in Thailand can be complicated but with the help and network of professionals, you can rest assured that you will be able to legally own property in Thailand. Silk Estate is one of the most established and largest networks of real estate buying and selling platforms in Thailand. If you would like to rent, buy or sell property in Thailand and promote your property to foreign investors, then we are the best choice.
Book a call with the Silk Estate team and let’s discuss finding you your dream home in Thailand.
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