Buying a Home in Thailand: A Guide for Foreigners

Thailand’s tropical climate, rich culture, and beautiful landscapes make it an attractive destination for foreigners. Whether you’re looking for a holiday home or a permanent residence, understanding the legal aspects of property ownership is crucial. Here’s a comprehensive guide on what you need to know about buying a home in Thailand as a foreigner.

Foreign Ownership of Property in Thailand

Foreigners cannot own land in Thailand, but they are permitted to lease land and own the buildings on it. This arrangement requires a registered land lease agreement with the Land Department.

Ensuring the correct legal ownership of the building on leased land can significantly enhance your rights and long-term interests in the property. The right to own a building on leased land is linked to the land lease term and potentially an additional right of superficies.

Ownership Documents for a Building

In Thailand, land comes with a title deed, but buildings on the land do not have separate ownership deeds, except for condominium units.

Ownership of a building can generally be established through a land lease granting the right to build and a building permit issued in the lessee’s name.

Alternatively, a Thai script sale of a structure document from the local land office can serve as proof of ownership.

Transferring Ownership of an Existing House

Transferring ownership of a structure separate from the land involves a few key steps:

Announcement of Sale: Both seller and buyer must announce the sale at the local land office. If one party is unavailable, a proxy can be appointed using the land office power of attorney form (Tor-Dor 21).
Documentation: Necessary documents include the Tor-Dor 21 (if applicable), building permit, previous land office sale agreement, Ta Bian Baan (house book), and IDs of the parties involved.
Public Notice: The land office issues a notification form, which must be publicly posted for 30 days to allow for any ownership contests.
Completion of Sale: After the 30-day period, the parties must complete the sale at the land office, following the official transfer procedures.

For developers, offering a construction agreement alongside a land lease agreement is another option, which involves charging VAT and issuing a building permit in the purchaser’s name.

Transfer Tax and Fees for a House

Normal property transfer fees and taxes apply to the transfer of ownership of a house separate from the land.

These fees are based on the actual sale price or the government appraised value of the house, which considers location, floor area, and construction materials.

Additional Taxes

Land and Buildings Tax: When leasing both land and house, a yearly building and land tax of 12% of the annual lease value is charged to the owner. Owning the structure on leased land can reduce this tax liability.
Rental Tax: Properties used for commercial purposes or rented out must pay a rental tax at 12.5% of the annual rental value or the assessed rental value, whichever is higher.
Owner-Occupied Residences: The first owner-occupied residence is exempt from the building and land tax, but additional properties are not.
Company-Owned Properties: Foreigners owning property through a Thai limited company must pay building and land tax, irrespective of rental income.
Local Land Tax: A small tax on undeveloped land depends on location, size, and use.

Future Property Tax Reforms

Thailand plans to introduce a new property tax system, replacing current taxes with a general tax on immovable property. The proposed tax rates are:

Up to 0.5% for commercial use
Up to 0.1% for private residences
0.05% for agricultural purposes

These rates vary by district and will apply to all property owners, including foreigners.

Why Choose Closer Law?

Navigating the complexities of Thai property laws can be daunting, but with the right legal guidance, foreigners can successfully own buildings on leased land.

At Closer Law, we specialize in real estate law and are here to assist you every step of the way.

If you have any questions or need legal assistance regarding property ownership, our experienced team at Closer Law is here to help.

For personalized legal advice and to ensure your property transactions are seamless, contact us today!

We provide:

Expert legal advice tailored to your specific situation
Assistance with documentation and fair practices
Representation in negotiations or, if necessary, in court

Together, we can safeguard your success and ensure your peace of mind.

Contact us today

📞 Call us: +66 (0)61 645 8553