Are you looking to buy a property in Thailand ? There are essentially two ways that you can buy, and neither option is necessarily better than the other. Depending on who you are, what your goals are for buying a property and how much initial money you can invest the best option for you will be different.
Regarding land ownership, only Thai citizens are allowed to own land freehold in their own names. A house or a structure can be owned by a foreigner, but not the land.
Foreigners have two avenues to choose from for land ownership : leasehold via a legally recognized lease agreement at the land office; or freehold via a Thai company holding the land as a registered asset.
This is the most common land ownership.
In this scenario, the land on which your house (the physical structure) sits, is owned in the name of a Thai citizen or Thai entity.
Upon purchasing the property, you and the land lessor will register (via a lawyer) a 30 year lease on the back of the land title deed, or “Chanote” in Thai.
This lease agreement (Land Lease Agreement – LLA) is recognized by the Thai government as a guaranteed right and prevents the land lessor from trying to negate, cancel or otherwise interfere in your rightful occupation of the land during the lease period.
At the time of this writing, the Thai law only recognizes a 30 year lease as the maximum lease period that can officially be registered at the land office. This 30 year lease is a guaranteed right by the Thai government, and the land lessee is the rightful occupier of the land, and cannot be denied access or occupation rights.
Of course the Lessee of the land is entitled to assign this land to a ny person without to obtain any prior consent from the Lessor. The Lessee has also rights to sub-lease the Land Lease Agreement to any person without to obtain any prior consent from the Lessor.
It’s usually reserved for Thai citizens only…
If you are a foreigner who prefers to own a house and land freehold, there is the option to purchase the land freehold via a Thai company.
The way this works is that a lawyer will create a Thai company with you as the majority shareholder and managing director of the company.
Foreigners are allowed to own up to 49% of a company with the remaining 51% of the company shared between a minimum of at least 2 Thais. A foreigner can still have majority ownership and can act as the managing director a sole signatory of the company, which provides the foreigner control over the company.
A lot of foreigners prefer the company ownership route, as they feel it provides better protection than a land lease and gives actual ownership rights. As a company, however, you will be required to file annual taxes and prepare a balance sheet, which an accountant must provide for you. This will cost anywhere from 12,000 – 20,000 THB annually. It is recommended not to trade on this company, as it will complicate the tax situation if/when you decide to sell the property.