Under Thai law a foreigner may not own the freehold to land, however, a freehold title for a building which sits on the land can be purchased.
There are a number of different purchase options available to the overseas buyer and most property developers will offer buyers both freehold and leasehold alternatives:
Purchasing the land leasehold and the property freehold
The land on which the property sits can be purchased by a foreigner as leasehold. The developer will lease the land to the purchaser for a period of 30 years with an option to extend, at minimum cost, for a further two 30 year periods to give effectively a 90 year lease. A good leasehold contract should include a clause which states that if the land law in Thailand changes, making a freehold option available, the title may be converted from leasehold to freehold at the leaseholders request.
The property which sits on the land may be purchased by the individual or a company such as a BVI (British Virgin Islands) company set up by the buyer.
It is usual for the purchaser to set up a BVI company which holds the lease on the land and the property freehold title.
If the BVI option is taken it makes the resale process very simple as the company can simply be transferred to the new owner and changes to the land title and lease are unecessary.
Phuket Ocean Villas are able to advise you on this process and can recommend legal professionals to help you with the procedure.
Buying a condominium
Purchasing a condominium is the simplest process for overseas buyers as Thai law allows foreign freehold ownership of condominiums. It states that 49% of a condominium block may be owned by non-Thais, some blocks may even allow 100% foreign ownership if the developer has acquired the appropriate condominium license.
Developers will usually offer a choice of two ownership options, “freehold” or “leasehold”.
A freehold may be purchased if a condominium block is within its' quota for foreign ownership i.e 49% . The freehold will give you rights over the building but not the land.
A leasehold will be offered if the condominiums have had their freehold quota to foreigners fully subscribed. The initial lease duration with an option to renew for two additional 30 year terms effectively giving the buyer a 90 year lease.
The land on which a condominium sits is owned collectively by the individual condominium owners with a majority Thai shareholding. It is governed by a corporate body which is usually set up by the owners.
To qualify for freehold ownership of a condominium in Thailand overseas buyers must send the funds for the purchase in foreign currency from a bank outside of Thailand. They must be accurately recorded as such by a Thai bank in the form of a foreign Exchange certificate, “Thor Tor 3”,
This certificate provides evidence of the sale or deposit of foreign currency in an authorized local bank. This form must bear the bank's authorized signature and seal in the authorized bank column. The Thor Tor 3 must specify that the purpose of the remittance of foreign currency is for the purchase of a condominium unit or units and must in total equal or exceed the price of the condominium. The Thor Tor 3 certificate is readily available from all major banks in Thailand.
The other circumstances in which a foreigner can purchase the freehold to a condominium are;
1. Individuals who are permitted to have residence in Thailand under the Immigration Act.
The documents required are either a passport, residence permit and house registration.
2. Individuals who are permitted to enter Thailand under the Investment Promotion Act.
The documents required are a passport plus a letter from the Board of Investment of Thailand certifying permission to live in Thailand under the Investment Promotion Act.