Foreigners living in Thailand are having a buzz these days over news about foreign land ownership which basically change previous land laws pertaining to foreigners not allowed to own any property in Thailand except that which is covered by the Condominium Act of Thailand. The news article came out on February 11 and has since elicited online and offline queries from the numerous farangs living in Thailand for many years.
Teera Phutrakul, Certified Financial Planner, and Chairman of the Thai Financial Planners Association (TFPA) came out with an article in response to the overwhelming interest generated by the February 11 article. Phutrakul explained that one has to read the fine print carefully to avoid misunderstanding. Under the Thailand Land Code Act of 1954, ownership of land by foreigners is allowed under the provisions of a treaty. Unfortunately, the last treaty that carries such provision was terminated in 1970. In 1999 the Land Code Act was amended permitting foreigners to own land up to one rai or about 1,600 square meters under Section 96 for residential purposes through the Board of Investment. In effect, a foreigner is required to have a 40 million Baht investment in Thailand to be able to own a piece of land in the Kingdom. Investments can take the form of specified assets, government bonds or businesses beneficial to the Thai economy.
Assuming a foreigner decides to make the qualifying investment, there are strict conditions that still apply which only allow foreigners to buy land in specified areas with the approval of the Interior Minister. Additionally, this ownership cannot be transferred by inheritance and is limited to the approved and granted holding period.
You can check this article on how can a foreigner legally own a property in the Kingdom.
Alternatively, a foreigner married to a Thai national may own a land by inheritance if the foreigner outlives the Thai spouse. But then again, there is a restriction that says, that the foreigner as a statutory heir of the deceased Thai spouse, may inherit the land under Section 93 of the Land Code Act, but must be disposed within a year from acquisition date.
The other remaining alternative such as establishing a Thai-registered limited company having 51 to 49 ownership in favor of the Thai counterparts, is designed to discourage foreigners from pursuing the option considering the cumbersome process that one has to go through. From some farangs’ point of view, it’s not worth the time and resources.
One popular option to acquire a property in Thailand is through long-term leasing. The maximum leasing period allowed under Thai Law for non-commercial use is 30 years and for commercial use, it’s 50 years. Thai laws in this regard are friendlier to individuals leasing land than through a Thai company.
Essentially, the only permitted option is buying a condominium unit as stipulated in the provisions of the Condominium Act. Foreigners are allowed to acquire up to 49% of the usable space in a condominium block. Long-term leasing of 30 years prepaid is also allowed in condominium units. And like the conditions in land leasing, it may be renewed for an additional 2 terms of 30-year period.
In the end, there was nothing new. Conditions of foreign ownership of land in Thailand remain the same – restrictive to foreigners.