EFAM | Escape From America Magazine

Can Foreigners Legally Own Real Estate in Thailand?

For anyone who is looking for a country to retire to – or just a warm bolthole for escaping the winter blues – Thailand is a place that is pretty hard to beat.  The country already has a very large ex-pat population, attracted by the low cost of living, the friendly and accommodating people, warm tropical climate where temperatures rarely drop below 80F, the golden sandy beaches, blue skies and lush rainforests, not to mention the world-famous local cuisine.

In the past, there was a barrier for anyone wishing to spend lengthy amounts of time in Thailand, which was the country’s strict and less than generous policy with regards to issuing visas.  However, Thailand is now actively attracting retirees to the country – providing that they bring a little cash with them when they come!

Pattaya is the home to Thailand’s biggest expat community after Bangkok.

In order to be eligible for a ‘Non-Immigrant Type O-A Retirement Visa’, applicants need to be age 50 or over,  pass a simple medical exam, invest a minimum of THB 800,000 (around $25,500) in the country and show that they receive a regular income, such as a pension or investment income, of no less than THB 65,000 (around $2,000) per month.  The minimum investment of THB 800,000 is just about enough to buy a small condo in Pattaya, which is home to Thailand’s biggest ex-pat community after Bangkok, and buys a lot more than that outside the main tourist areas of the country.  Rents in the more desirable parts of the resort cities can be relatively expensive – it’s hard to find somewhere nice for much less than $600-700 per month.  However, with no rent to pay, $2,000 a month is enough for anyone to enjoy a very pleasant lifestyle in the country.

It’s hardly surprising, therefore, that the numbers retiring to Thailand each year and investing their minimum THB 800,000 into real estate so that they can live rent-free are increasing constantly.

The question most often asked by those interested in purchasing real estate in Thailand is, “Can I legally own real estate on a freehold basis in Thailand in my own name?”

If you’re happy living in a condo (which is going to be the only option available to you unless you’re able to invest substantially more than the minimum), the answer to this question is a resounding YES! As a result of revision to the Condominium Act in 2008, foreigners are now able to own up to a maximum of 49% of the total habitable area of any project registered as a condominium.   There are now many projects – both finished and under construction – which are classified as condominiums, so there should be plenty of choice available in the most popular areas of Thailand.

While the Thai nightlife is legendary, days can be spent recovering at tranquil beaches such as this one near Pattaya.

But what if a condo is not what you are looking for?  Maybe you have your heart set on retiring to a villa in the country with its own garden?

Ah – now things get a little more complicated!

While foreigners are able to own property on a freehold – i.e. the bricks and mortar that the building is built from – they are not able to own the land beneath it.  But are there any ways around this law that will allow a foreigner to live in a villa of his or her own?

Yes there are, but none of them are ideal.  Here are your options:

1.  Buy in your spouse’s name

Many single guys come to Thailand looking for love.  And many of them find it remarkably easily!  If you have found the love of your life and are 100% sure that the pair of you are going to live happily ever after, the easiest way of owning real estate is to buy it in your spouse’s name.  Be aware, however, that the real estate will belong to your spouse and your spouse alone – it won’t be in joint names.  So you need to understand that if your Thai marriage does not have a fairy tale ending, you’re probably going to end up homeless.

While getting one of these women to put your house in their name may be possible, it should definitely not be your first choice for how to legally buy property in Thailand.

2.  Buy on a 30-year lease

Foreigners are able to lease land for a maximum period of 30 years.  After the 30-year period, ownership of the land will revert back to the lessor.  Many companies trying to sell land on a leasehold basis will try to reassure you that it will not be a problem for them to renew the lease for 30 years after that – and another 30 years after that too – for a total of 90 years.  Unfortunately, however, it’s not that simple.  Leasehold agreements for longer than 30 years are not legally binding and so a lot will depend on the goodwill of the original seller (and whose lawyer drew up the lease agreement).

3.  Become a big-time investor

Have you got a spare THB 40 million ($ 1.27 million) to invest in Thailand?  If so, you will be welcomed into the country with open arms and will be allowed to own one ‘rai’ (around 17,250 square feet) of land on a freehold basis.

4.  Buy as the minority partner in a Thai company

The most common method of owning land is to form a Thai company of which you own a maximum of 49% of the shares.  The remaining 51% must be owned by a minimum of two other nominee shareholders, both of whom must be Thai citizens.

“But they own most of the company – they can just take it away from me!”

This is the most common fear from people given this option.  This is not something you need to worry about though.  Your shares can all be ‘Preference Shares’, with ten voting rights for each of your shares versus just one vote for each ‘Ordinary Share’ that the nominee shareholders own, so you are guaranteed total control over the company and all its assets.  The costs for forming such a company is around $1,000 to establish it in the first place, plus around $300 for an accountant to file the company’s annual returns each year.

Sounds simple enough, doesn’t it?  And many tens of thousands of villas and apartments are currently being held by foreigners in such a way, with none of them having faced any difficulties.  So where’s the problem?

The problem is that, according to the letter of the law, owning real estate by means of a Thai company which uses nominee shareholders is illegal.  Currently it is the Thai shareholders that are most at risk, because they have to sign a declaration that they are not acting as nominee shareholders and may face prosecution and possible jail time if they are found to have lied during the company formation process.

To date, no Thai citizen has ever been prosecuted for making a false declaration and no foreigner has ever lost his or her property this way.  However, there are regular rumblings from inside the government that more action should be taken to stop foreigners owning land in such a way and that seizures should be made.  Thai politicians have been making such suggestions for many years now and no action has ever been taken.  However, should you decide to own real estate in such a way, always be aware of the fact that you are technically in breach of the law and so there is always a risk involved – probably only a slight one, but a risk still the same – in using this method of ownership.

One final word of advice/warning should you look to purchase land using any of the methods outlined above – you should always take legal advice before buying real estate.  Good legal advice is only going to cost you a few hundred dollars, but could possibly make the difference between your keeping hold of your little piece of paradise, or losing it.

Nick Pendrell is an international real estate analyst, journalist, author and realtor living in Pattaya, Thailand.  His latest book, Pattaya Property and Thailand’s Real Estate, was published in August.  Feel free to contact him with any additional questions you may have at nick@informerbooks.com.

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10 Comments

  1. Paul September 20, 2012 at 2:44 pm

    I believe the retiree visa requirement is 800,000 baht kept on deposit with a Thai bank for 3 months OR 65,000 baht ($2,000) a month pension etc. One or the other, and the 800K is free to use the other 9 months of the year.
    Buying real estate is not needed but separate from visa requirement.

    • Fool’s Errand November 11, 2012 at 8:08 am

      Anyone buying real estate in Thailand is mentally challenged. There are thousands of stories of people who have lost everything. But every year, another group of suckers steps up to the plate, thinking they’ve found a solution. The 49% ownership solution btw, is totally unstable as on any future date the government (ie: a local politician) can take your house.

      There are so many countries that allow true ownership. Why anyone would buy in Thailand is beyond me.

  2. Peter Oyeniran October 21, 2012 at 5:41 pm

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  3. Paul November 5, 2012 at 3:43 am

    The author of this piece it should be noted is a real estate salesman and is economical with the truth to say the least. His first lie is to say that Thailand is cheap, yes it is if you only want to live on rice. Even a simple locally made brand name beer is double the cost in a bar than anything you will find in the UK for example.

    Anything imported has between 250 – 450 % import duty added, so forget any wine tasting parties and a simple can of beans, that staple of a Brits breakfast, will cost you 3 x times the price of the same brand in the UK. just as a small example.
    As this article seems designed to appeal to Americans they should be aware that a car in Thailand will cost them double or perhaps triple the cost of one in their own country. The cost of gasoline is at least double the cost of gas in the US and is comparable to the cost of gas in Europe. The gasoline in Thailand has ethanol added these days so forget driving around in an old banger they can’t use ethanol for long before becoming clapped out so you will be buying fairly new model at what you will think are an extortionate rate. Even used cars here are extraordinarily expensive and all seems to suffer from odometer amnesia.

    The political instability of Thailand cannot be ignored whilst it holds the world record for military coups and there always appears to be one looming just around the corner.
    The police are a law unto themselves in places like Pattaya and if they want to stop you and place a fine on you for any reason they surely will or worse if you end up in jail and have nobody to speak up for you or come and rescue you, expect to rot there until you come up with whatever money they demand. The extraordinary high death rate of foreigners in Thailand, not often mentioned at all by travel writers and foreign media in general and others with vested interest remains one of life’s mysteries here and even if death isn’t the main issue, mostly nobody can expect any help from their embassy here except to make one phone call to your next of kin that you are deceased. The British embassy for example is one of the worse for not helping it’s citizens in distress and actually employs a troop of Ghurka soldiers to stop it’s citizens from entering their fortress in Bangkok which should tell you all you need to know.
    Bangkok is now becoming unlivable with pollution levels at eye watering and seriously health damaging levels and traffic jams are predicted to reach permanent grid lock in the not too distant future with the public transport such as the very good BTS skytrain already at bursting point. The air quality of both Bangkok and Pattaya the writer forgets to mention is at critical levels for any person to feel comfortable in and will have you choking for air in no time. There are many other facets of Thailand that will not appeal to the westerner used to certain standards of living in his own country and all westerners should be aware that you have no security at all in Thailand and you are and always will be classed as a FARANG and will never be accepted as an equal in the so-called land of smiles. For those of you who decide to marry and take on the family of, for example, an E-sarn girl (from the north east of Thailand) then good luck to you, you get what you pay for and then some. After 17 years in the kingdom and having had to rescue or advise hundreds of ill fated western males over the years who fell for the infamous LONG GAME practiced by these particular girls, who are even looked down upon by their own Thai people in general. ANY MAN needs to know, especially if she has been bought out of a bar, that you can take the girl out of the bar but not the bar out of the girl EVER.
    And don’t think for one moment that you are immune from all of this if you didn’t have to buy her out of a bar, the name of the game in Thailand is get the other person’s money as quickly and easily as you can, the girl who achieves this will have a peer group who will hail her as a winner and claim her as some kind of roll model for turning over as many foreigners as she can in the shortest space of time. Even the Chinese chroniclers wrote about this phenomenon 400 years ago, when warning their sailors about such women then known as Khmer’s.

    Thailand remains an enchanting place to visit for a great holiday, the hotels can be exceptional for the price and for the most part beautiful beaches remain intact, but as far as setting up home here, I would advise caution, the complex property laws which are fundamentally designed to put you off when you think about it , tell you that they simply don’t want you here as a permanent fixture. Take note!!

  4. Somchai November 16, 2012 at 8:20 am

    If you go to Thailand just rent a serviced apartment, do not get a car, rent a motorbike, do not fall in love with a bar girl marry her and put your house in her name( Geeez!), do not get drunk and get into fights, pay your bills, smile, respect the culture, embrace the fact that you will always be an outsider and enjoy this wonderful friendly country.

    You can live for about 1/3 the price that you can in most western cities. If you like Thai food you can probably live for less. If you feel the need to import French wines and British beans yes you will pay more. However, there are plenty of excellent Western style restaurants that are inexpensive compared to European standards.

    I always felt the people were more aggressive in the US and Europe. I found the Thais to be quite hospitable (just pay your bills and smile.) Maybe they are faking it but I never have been against a good fake.

    I would check out some of the other areas besides Pattaya and Bangkok. Chiang Mai is a lovely peaceful city. It is not a perfect place but neither is the place where you are right now. Keep your head on your shoulders, your eyes open and enjoy this very special land.

  5. Jon November 17, 2012 at 7:00 am

    i agree with the comments on owning real estate is fairly pointless for a foreigner. Usually a Western concept of owning land is that you can put anything you want on the property as long as it doesn’t infringe on your neighbor. Thailand is more of a cash-based society; and is best suited for those who live ‘in the present moment’. The real estate laws and the visa laws make it clear that for 95% of the foreigner population, you don’t own anything. If you want to stay, you can. If you bring your money, better. You can control all which you can take with you, and control a space or property as long as the lease is there. But outside of that, you are just a passerby-er. This isn’t anything personal, but it’s how Thailand remains a paradise. Way too many people that come here and flop is because of one or more of the following

    1) They try to ‘convert’ Thai people to western thinking/beliefs/way of life.
    2) They try to live like Westerner in Thailand. (Why are you in Thailand?)

    If you bring all (or a good portion) of your western attachments to Thailand with you, of course it will be more expensive. Bar girls have their place, But I found most of them were honest about what they wanted. Are you being honest about what you want? If you are looking to extend within the country for 1 year so that you do not have to leave, your only options are either retirement or marriage. And be prepared for the ridiculous amount of paperwork required EACH YEAR to extend, not to mention the seasoned money requirement (400,000 or 800,000 baht, or the monthly income affidavid). School (ED) based extensions are typically 90 day extensions. The multiple entry visa is much easier to obtain, and would allow up to 15 months stay in the kingdom, but you have to do a border run every 90 days from your last entry.

    You can live as cheap as you want here, and at the same time spend your money on the things you love. Frugality is extremely difficult in western countries UNLESS you are receiving some kind of gov’t handout. Rent, food, and other basics are expensive, and even with a good job, you are usually 2 paychecks away from the poor house as it becomes difficult to save anything worth saving to keep you afloat for that rainy day.

    I wish life was this easy. No major obligations or expectations that I cannot reasonably fulfill, yet I can live comfortably on $550 a month. In fact, there is a website that breaks it down that this is possible.

  6. Peter Hoxx November 26, 2012 at 4:45 am

    Thailand is a very good place to stay and by seeing the advantages the country provides we can invest if we have money. The real estate is also growing rapidy in recent years according to thailand govt stats.
    -Peter

  7. LollipopMoon November 30, 2012 at 1:06 am

    Yes peter. You said it was true.The real estate in Thailand has very good atmosphere.


    Thanks@LollipopMoon

  8. Bruce February 13, 2013 at 11:35 pm

    Hi all, two points:

    1. Renting is cheap if you do your homework about the market first and get help from a trusted Thai friend. It is also recommended for all expats for at least the first year until they are VERY sure they want to stay long-term. It is difficult to sell (used) real estate here, and tragic to see people desperate to sell and move back to the west but unable to find a buyer

    2. There are many methods potentially available to westerners to buy or control land or buildings here, but ALL have their pluses and minuses (depending on your specific individual circumstances), and all have some degree of risk and/or legal uncertainty. You must investigate all options, and see what is the best fit for YOU, before you get anywhere close to signing a contract. Rush in at your peril!

  9. Maria Susan July 13, 2013 at 7:04 am

    Yes, Foreigners can also invest legally in Thailand.

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