Laws ... Many people who are interested in real estate in the Kingdom of Thailand are most frightened by this word. As a realtor, I have to tell my clients every day about the laws of the Kingdom. In this article, I would like to describe all the schemes for acquiring real estate in Thailand that I and my clients use, and to point out the pros and cons of all forms of property used by individuals and companies.

The first thing I would like to draw attention to is the Thai Land Code. This code of laws has been developed quite nationalistically, in favor of the Thais (I will not say that this is bad, since there is nothing wrong with the fact that the Kingdom makes great privileges to its citizens in the first place). The main rule concerning foreigners is: 'Foreigners do not have the right to own land (There are certainly exceptions, but they are so rare that it is pointless to talk about this, so let's consider this as an axiom).'

Henceforth, all subsequent forms of ownership, all possible schemes, which are invented both in a legal format and in a semi-legal one.

So, we will analyze how it is better to buy a foreigner property in Thailand with minimal risks. There are the following forms of ownership:

1. Foreign Freehold is for me the most optimal, simple and reliable way to purchase real estate in Thailand. It has a fairly large history of origin, we will not dive into it, I will only say that the conservative way of the country has recognized this form of ownership not long ago, when they saw a great potential in foreign buyers. FOR FULL FOREIGN PROPERTY you can only buy apartments in condominiums. According to the law of the Kingdom of Thailand, 51% of the residential area of ​​the condominium should be owned by Thai / Thai companies, while the remaining 49% may belong to foreigners. There are no annual property taxes in Thailand (a very big advantage), but there are fees when registering real estate for a buyer, after which Chanote is issued (a document confirming ownership). Fees consist of:
- Registration fee (2%)
- Stamp Duty (Stamp Duty 0.5%)
- Special Business Tax (3.3%) - Generally should be paid by the seller
- Witholding Tax (1%)

Totally, we receive 6.8% of the contract value of the property. Usually this amount is divided between the seller and the buyer, although for my personal reasons it would be fair for the buyer to pay only the registration fee.

2. Leasehold (Long-term possession), in my opinion, is the most popular form of property on the island of Phuket, and throughout Thailand. Speaking schematically, there is a contract between a seller and a buyer, about long-term lease. The maximum period under the laws of the kingdom is 30 years, not 90 as some many think. This term can be extended twice, if it is prescribed in the terms of the lease agreement, i.e. in fact get possession of 30 + 30 + 30 years, each time registering a 30-year tenure. The most correct approach, if this contract is drawn up between a legal entity (a Thai company, usually a developer) and a person, a foreigner acquiring real estate. In my practice, there were cases where the secondary real estate was sold and an agreement was drawn up between the Thai individual and the foreigner, in this case it is necessary to select a very good lawyer and prescribe all the points about inheritance and renewals of possession. Here only registration fee is paid 1.1% and is usually divided 50/50 between the seller and the buyer.

3. Thai Company Freehold (Owning through a Thai company) - I will immediately say that this form of ownership is semi-legal. It looks like this: The foreigner opens a Thai company with the help of Thai lawyers, in which he owns 49%, the rest 51% is the property of Thai citizens. This company also records real estate acquired by a foreigner. If, by means of an audit of the company, it turns out that the Thai owners and the company are in fact created to bypass the Land Code, problems may arise. In my practice there were no cases when after the audit of the company, there were difficulties with owning or selling real estate, but since it is forbidden to open companies for owning land or real estate under the laws of the Kingdom, I do not recommend this form of ownership. There are several possible options for the purchase and registration of real estate in the Kingdom. For more information, contact our specialists. Investments in foreign real estate must be correct! When choosing a good realtor, everything becomes much easier and more understandable.