Your Guide to Buying Property in Thailand

Thailand is a paradise for expatriates and investors, offering everything from city life in Bangkok to beautiful beach living in Phuket or the serene hills of Chiang Mai. Owning a piece of this paradise is a common goal, but the rules for foreign ownership are unique and complex. At Foreigners of Asia we've exclusively outlined all you need to know.

Before you start browsing beachfront villas, you need to understand the fundamental difference between owning a condominium and owning land, which is the single most important factor that determines the ease and legality of your purchase.

1. The Easy Route: Condominium Ownership

If you’re looking for a hassle-free investment or a primary residence, a condo is your best option. Foreigners can own condominium units in Thailand outright, meaning you hold the freehold title in your own name.

The 49% Rule

This is the golden rule of Thai condo ownership:

• Foreign Quota: Foreigners can collectively own up to 49% of the total usable floor area of any registered condominium project.

• Thai Quota: The remaining 51% must be owned by Thai nationals or Thai-owned entities.

As long as you buy a unit within that 49% foreign quota, the process is quite simple.

Funding the Purchase (The Crucial Step)

To legally register a condo in your name, you must prove that the funds used to purchase the unit were transferred into Thailand from abroad and denominated in a foreign currency.

• The Document: For new builds or if you're transferring large sums, your bank will issue a Foreign Exchange Transaction Form (FET Form) (previously called a Thor Tor 3).

• Why it Matters: The FET form is the proof that the money came from outside Thailand. This document is essential for the Land Department to register the foreign freehold title in your name. Never pay for a condo purchase with cash or funds already sitting in a Thai bank account without the proper paper trail, or you risk being unable to finalize the title transfer.

2. The Complex Route: Land, Houses, and Villas

The Thai Constitution strictly prohibits foreigners from holding freehold ownership of land. This is the biggest hurdle for buying a standalone house, villa, or land plot.

While you cannot own the land, you can own the structures built on it. To acquire a house or land, foreigners use two main legal structures: Leasehold or Thai Company Ownership.

Option A: Leasehold (The Safest Route for Houses)

Leasehold is the most common and secure way for a foreigner to control residential property built on land.

• What it is: You enter a long-term contract with the Thai landowner (often the developer) to lease the land for a fixed period.

• The Term: The maximum initial term for a residential lease is 30 years. Thai law allows this lease to be registered with the Land Department, giving you legal certainty.

• Renewals: While a guaranteed 30+30+30 year lease is often marketed, only the initial 30-year term is registered and legally secure upfront. Renewals are subject to the law and the owner's willingness at the time.

• Your Rights: You own the house (the structure) built on the land, and you have exclusive use of the land for the duration of the 30-year lease term.

Option B: Thai Limited Company (High Risk, High Maintenance)

This complex structure is generally reserved for business owners or high-value investment properties.

• How it works: A Thai Limited Company is established to purchase the land and property. You own a controlling minority stake (e.g., 49%), while Thai nominees own the majority (e.g., 51%).

• The Risk: The company owns the land, not you. You control the company via shareholder agreements, preferential shares, and directorial power. This method is heavily scrutinized by the government to prevent misuse of nominee structures and requires annual corporate filings and tax compliance. Always seek advice from a specialized international lawyer before considering this.

3. Key Property Buying Terminology

Term	Definition	Implication for You
Freehold (Chanote)	Full, absolute ownership of the property (land or condo unit).	You can only get this for condos (within the 49% quota).
Leasehold	A long-term right to use a property, registered for a maximum of 30 years.	The standard legal option for foreigners buying landed property (houses/villas).
Common Area Fee	A monthly fee paid to the condominium management for maintenance of pools, security, landscaping, etc.	Mandatory for condo ownership; budget accordingly.
Sinking Fund	A one-time lump sum fee paid on completion of a condo unit, used for major future repairs (e.g., roof, façade).	A standard, large initial expense for a new condo purchase.

Final Checklist before Buying

1. Hire a Lawyer: Do not skip this step. Hire an independent, licensed Thai law firm that specializes in property law and is fluent in English. They will conduct Due Diligence on the title deed, check for encumbrances, and ensure the contract protects you.

2. Verify the Foreign Quota (Condos): Ensure the developer or current owner confirms that the unit falls within the 49% foreign ownership quota.

3. Ensure FET Compliance: Make certain that every transfer of funds for the purchase is correctly documented by your bank with a Foreign Exchange Transaction Form (FET).

4. Confirm the Building Permit (Houses): If buying a house, your lawyer must verify that the building has the correct construction permit and is legally registered on the land.

Buying property in Thailand is an achievable dream, especially if you stick to the straightforward condominium route. If you choose to pursue a house or villa, an experienced lawyer is essential for navigating the complexities of land law.