Buying Property in Thailand

  Oct 27, 2012       No Comments   

Advice on Buying Property in Thailand

The following is a brief excerpt from our comprehensive guide to all aspects of buying property in Thailand. Go here to read the full guide and download a PDF copy.

Looking at investing in property or a business in a foreign country can at first seem a bit daunting. Different countries have different ways of dealing with property ownership and it can take a while to get used to the systems and rules and regulations concerning property ownership in Thailand. Here we try to give you a basic introduction to the systems, laws and general practises of the Thai property market. We will try to help you understand how and why things work and mention some of the common pitfalls that need to be avoided. But this is just an overiew and laws and regulations can often change so you shouldn’t treat this as your only source of information, which leads us to our first piece of advice below.

Use a Lawyer!
Lawyers are professionals who you pay to represent you in your property purchase. A good lawyer will have access to all the latest rules and regulations as well as information on the correct procedures and processes to be applied. It meet seem like a large expense at the time but getting a good lawyer will give you peace of mind that you are getting what you are paying for and can potentially save you a lot of trouble and expense in the future. It is a good idea to get a lawyer that specialises in property and also speaks a language that you understand. Bangkok and Pattaya, with their large property markets and large numbers of foreign residents are good places to look for an experienced, English speaking lawyer. If they come with a friends recommendation then all the better.

Foreign Ownership of Land and Property
Thailand, for some reason or other, places some strong restrictions on foreign ownership of land and property. Basically a non-Thai national cannot own land or a home in their own name. They can however own apartments. In any apartment development 49% of the floor space can be sold to foreign owners in their own name as long as the remaining 51% remains under Thai ownership.
But there are still some very secure ways to purchase land and houses in Thailand.
DO NOT let your new Thai best friend who you have known for one week pusuade you to buy it in their name – this is a really bad idea. And only buy it in the name of your Thai wife or husband if you are very, very, very confident of your relationship.
However you can set up a Thai company which you can control – there are various methods – here is where your lawyer earns their money. Then the company can buy the land and you can take out a long lease on the land or house in your own name. Currently you can make extremely long leases this way for three consecutive periods of 30 years giving 90 years in total – after which your company still owns the land. This is a secure method and is in wide usage throughout Thailand. In fact this long leashold method is often used without the purchse of a company as many people decide that 90 years is long enough and gives plenty of potential for future transfer and sale if required.

Types of Land Title in Thailand
Thailand has a bewildering range of land title types, which are described below. A basic rule to apply if confused is that Chanote and Nor Sor Sam are good and the rest, unless under very special cirumstances, are risky and to be avoided.

• Chanote
  The best and most secure of Thai land title deeds. The boundary markers of this land are measured by GPS and such land has a title deed that provides a certificate of ownership of the land.
• Nor Sor Sam Gor
  The boundaries of land with this title deed are still fairly clear, being defined with reference to aerial surveys.
• Nor Sor Sam
  The land boundaries for Nor Sor Sam are defined relative to those of neighbouring plots and errors are common. But it is still an assured title of land possession.
• Por Bor Tor/Sor Kor
  These are effectively squatters land titles. Whilst a lot of land with these title deeds on Koh Chang has in fact been developed for tourism and other businesses the development is all, strictly speaking, illegal. Legal uses of this land title are restricted to residence and farming.
• Government Owned Land
  This is particularly important on Koh Chang where huge areas of land are under government ownership. Any development on land designated as National Park is strictly illegal and to be avoided at all costs. The Thai Navy own large amounts of land on Koh Chang and it is possible to lease land from them (and other branches of government) at a very low rental for periods of 30 years. The major catch is that there is a clause in the lease that allows the Navy to take back the land if required at any time with only 30 days notice. They probably won’t but is probably good enough for you?
• NB – Thailand is trying to phase out the weaker land title deeds and so it is potentially possible to apply to have one of these less secure forms of land title upgraded to Chanote. In practice this can take years and may never happen. If someone tells you that ‘their’ land will be upgraded then wait until it has been and you have seen all the paperwork before going any further. It is not uncommon for the ownership of land with Por Bor Tor or Sor Kor title to be disputed. It is probably best to only consider land with Chanote, Nor Sor Sam Gor or, at a pinch, Nor Sor Sam land title.

Thai Land Measures
In Thailand Land is measured in Rai, Ngan and Wah which correspond to the following metric land measures:

1 Rai             =      1,600 sq.m
1 Ngan         =         400 sq.m
1 Wah          =              4 sq.m

Or alternatively, for imperialists:

1 Acre           =            2.53 Rai
1 Hectare     =            6.25 Rai

Further Reading
The above is a very brief summary of a comprehensive guide on how to buy real estate in Thailand which you can find, read and download at koh-chang-guide.com.