How to Buy Property in Thailand

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Land Titles

What are the main types of land titles?

The land title deed is a Chanote (Nor Sor 4 Jor). The Nor Sor 3 Gor and Nor Sor 3, are equivalent to a land title deed for all practical purposes as the land can be sold, leased or mortgaged. However, the boundaries are less accurately surveyed compared to land with a Chanote. There are a number of other land titles though these do not afford the owner many rights to the land under Thai law.

 

Chanote

True land title deeds are officially called Nor Sor 4 Jor or more commonly Chanote. This is a certificate for the ownership of land and can be used as evidence confirming the right to government authorities. It is issued by the Land Office using GPS to accurately plot and survey the boundaries of the land. This is the most secure type of land title but land with a chanote can often be hard to find.

Nor Sor 3

The Nor Sor 3 is a document certifying the use of land issued and maintained by the District Land Office to the proprietor of the land but is not a possessory title. That is to say the person holding the Nor Sor 3 has the legal right to possess the land in question and can use it as a legal document. Nor Sor 3 is a floating map with no parcel points issued for a specific plot of land and not connected to other land plots, but its boundaries are recorded according to its neighboring plots. Therefore, it may cause some problems in verifying boundaries due to lack of accurate surveys. Any change in ownership of the land must be publicized for 30 days before it can be registered.

Nor Sor 3 Gor

The Nor Sor 3 Gor has the same legal basis as the Nor Sor 3, with the difference being that in general Nor Sor 3 Gor has parcel points on the map of the land area set by using an aerial survey with a scale of 1:5000. It is a more accurately surveyed title as each plot is crossed referenced to a master survey of the land area and a corresponding aerial photograph. Therefore, it is possible to verify the boundaries of the land. However, it is still less accurately surveyed compared to a Chanote.

Sor Kor 1

Sor Kor 1 is a notification form of possessed land, which shows and maintains the existing rights to the particular land. On December 1st 1954, the government advised all land proprietors to notify their possession of land to the government using a 'Sor Kor 1' form. After it was proven that such a proprietor had possessed and used the benefit of the land legally, the government would then issue 'Nor Sor 3' or 'Nor Sor 3 Gor' as an evidence, which are legal certificates stating the owner's name that they have the right to such land according to the principle land administration law. This right will be protected by the law and can be used as evidence in any dispute with a private individual or the government.

Condominium Title

A condominium title is a title to a part of a building or buildings with multiple owners, a fractional interest in the land, other common assets (such as a swimming pool) and common parts of the building (such as the stairwell or lobby). The title will state the floor area of the private apartment, the ground area of the common land and the percentage interest, in which that apartment has in the common property. This percentage also represents the voting interest in the condominium company or owners association.

Building Transfers

Buildings other than condominiums do not have any form of title document, but their sale or long lease can be registered at the District Land Office. Proof of ownership must be established either from proof of construction or a document showing sale and purchase. Do not confuse this with the House License document, which is only a registration of the house occupants. Transfer of a building, as distinct from its land, requires the posting of 30 days public notice, to see if anyone wishes to contest the ownership. Foreigners may own a building distinct from its land and register such transfer of ownership into their names at the Local District Office or Amphoe.

Land measurement in Thailand

Metric units are generally used in the construction and measurement of buildings, but land is usually measured in Wah or Rai.

The units you will come across most often are talang wah and rai. Talang means squared, so 1 talang mett is 1 sqm. Metric units are used when dealing with buildings.

Thai to Metric

Metric to Thai

  • 1 Wah = 2 m

  • 1 Talang Wah = 4 sqm

  • 1 Rai = 1600 sqm

  • 1 Rai = 400 Talang Wah

  • 1 Rai = 0.40 Acre (approx.)

  • 1 Rai = 0.16 Hectare

  • 1 Ngan = 100 Talang Wah

  • 1 m = 0.5 Wah

  • 1 sqm = 0.25 Talang Wah

  • 1 Acre = 2.53 Rai

  • 1 Hectare = 6.25 Rai

 

Purchasing Land

Are foreigners allowed to own land?

According to Thai law, foreigners are prohibited from purchasing freehold land and not more than 49% of the shares in a Thai limited company that owns freehold land under the company's name. However, foreigners may own a building distinct from its land, such as a unit in a condominium.

How can foreigners own land in Thailand?

The safest and easiest methods for circumventing the law prohibiting foreigners to own land include using a leasehold agreement or setting up a Thai limited liability company.

What are the advantages of setting up a Thai company to buy land?

Unlike land leasing, the ownership of such land is permanent as long as the company exists. Using this method is also convenient if you were already planning to set up a business in Thailand. This method is also suitable if you wish to purchase land as part of an investment as it is possible to mortgage or subdivide the land for resale, which is not normally possible with a leasehold.

What are the disadvantages of setting up a Thai company to buy land?

Unless you are an American, as a foreigner you cannot own more than 49% of the shares in the company. This means that you need Thai shareholders who will sign over control of their shares to you. The minimum number of shareholders is 7, so you can have 1 foreigner and 6 Thai shareholders. However, even though you control these shares, proper legal procedures need to be put in place in order to protect your investment.

You also need to make sure that the regulatory compliance of the company is maintained. Inactive companies that are not generating income may be de-listed, so you need to make sure that balance sheets are filed annually and that the company's address is maintained.

 

Land Leases

Do you have to register the land lease at the Land Department?

Leases up to 3 years don't need to be registered. Leases that are 3 years or longer must be registered at the Land Department.

What is the maximum lease term available?

The maximum lease term is normally 30 years with an option for an extension of 30 years and a further 30 years after that. Each lease renewal must be registered at the local land office. Land for industrial purposes may be leased for up to 50 years by a foreign company under certain circumstances with a possible lease extension of a further 50 years.

What are the disadvantages of leasing a property?

Its possible that the land owner may refuse to sign the registration for the lease extension after 30-years. The lessee can sue for breach of contract, but the entailed legal process is costly and time-consuming. Other disadvantages include the difficulty in obtaining a mortgage for the lease, a lower resale value and potential lawsuits from the land owner for lease violations.

 

Purchasing Condominiums

How is a condominium defined under Thai law?

A condominium is basically defined as a building with distinct portions that can be sold for personal ownership.

What are the requirements for a foreign individual or organization to purchase a condominium in Thailand?

  • A foreigner must have permanent residence in Thailand in accordance with Thai Immigration Law.

  • A foreign legal entity is in accordance with the Announcement of the Foreign Business Act B.E. 2542 (1999) and has been granted an Investment Promotion Certificate in accordance with the Investment Promotion Law.

  • A foreigner or foreign legal entity, who brings foreign currency into Thailand, or brings in Baht currency from the account of a person living abroad, and uses foreign currency from their deposit account. This requirement is normally met by the presentation of a Dor Tor 3 form, which is provided by the bank receiving an incoming remittance from abroad.

Are there restrictions to owning a condominium?

A foreigner or foreign legal entity can acquire up to 49% of the total number of units in a building. However, more than 49% of the ownership may be allowed in certain condominiums in Bangkok and other urban areas.

Are condominium long-term leases available?

Condominiums can be leased for periods of up to 30 years, which can be renewed. Leases of more than three years are required to be registered with the Land Department.

 

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