Buying Property in Thailand – The Successful Way!

By | July 25, 2013

If you have been thinking about Buying a Property in Thailand for either investment or retirement purposes,and like me you spend a lot of time “scouring” the internet studiously carrying out research on anything & everything before you make any investment decisions.

Then you will understand that to suggest the subject is “slightly muddy” would be a vast understatement !!.

Buying Property in Thailand

The bottom line is that Buying land in Thailand as a foreigner is simply not allowed.

It is possible that you can own land via a legally registered company, but you have to follow the rules.

The rules are 49% foreign investment, 51% Thai (with a minimum of 3 Thai Shareholders).

What that means is that 51% of the company’s capital must come from the Thai Shareholders.

The only thing the Thai administration asks is that the Shareholders are real, what business the company does, and if the company pays tax.

The government also wants to know how the Thai Shareholders came by the money and, most importantly, did they pay tax on that money !.

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 Buying Property in ThailandIF you are looking to move to Thailand and start an active business then this is a completely legal & above board route, as it also then allows you to acquire both a work permit & Non-Immigrant “B” visa.

However IF you are only wanting the company to be a “shell” or non-trading company DO NOT GO DOWN THIS ROUTE.

Many foreigners over the last 10 years who did exactly that, could now be at risk of either being forced to sell, or having their properties “confiscated” by the Government Land Office, because it is obvious that they are not trading companies merely “nominee structure companies” and are therefore illegal, and as such could be closed down.

Buying Property in Thailand

These rules really are no different to what your own countries governments implement, the only difference here in Thailand is that for several years the Thai government “turned a blind eye” to this practice.

So if you decide to buy land via the “Thai Company” route just make sure you follow the rules, and run the company legally. Do this, and you can be sure you will not have any problems !!.

Having decided to make a purchase, the next area you need to understand are the various different types of Land Titles that both prospective land & houses sit on.

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Buying Property in Thailand

YES, you can own either a house or condominium in Thailand in your own name, the law is very clear about this:

1/ Leasehold – You can enter a lease agreement with the land owner, and register the house in your name, the only thing you have to do, is to register yourlease contract every 30 years and pay tax (1% of the lease value), to be prepaid ahead of commencement of the lease.

The important thing if you follow this solution is to use a good lawyer to review your lease contract, and your rights.

I personally would recommend that you also apply for “superficiary rights”, this will add a little cost to the lease but gives you clear ownership rights over EVERYTHING you build on the land, is and is a completely recognised within the laws of Thailand.

This is a very common solution for Thais and is also fully accepted by the banks when it comes to financing the purchase.

2/ Condominiums – Foreigners can own a freehold condominiums under Thai law.

According to the condominium act, foreigners collectively can acquire up to, but not exceeding 49% of the total space of a condominium project.

Once the 49% threshold is passed all remaining condominiums must either be sold to Thai purchasers or sold as leasehold.

Buying Property in Thailand

Brief Summary of recommendations:

* If you intend to start a new life & business in Thailand, the Thai company structure is perfect for you. The house or land you buy will be part of the “capitalisation” of the company.

* If you are looking for either a retirement home or a holiday home, go down either the leasehold “superficiary” route, or buy a condominium freehold.

* If you looking to buy purely as an investment, check with the developer AND your lawyer as to which is the best route for you.

Before you do anything, please consult a registered law firm to ensure you know exactly what is involved !.

 

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