Expats looking to move to Thailand may decide to set down more permanent roots by buying a permanent home in the country. There are certain restrictions that foreigners coming into Thailand should be aware of although the purchase process is fairly straightforward.

Buying land in Thailand is possible but foreign investors need to be aware that they will not be able to own the lease on the land. Land is not sold as a freehold to foreign buyers. However, if buying a plot of land that has a property on it then the property can be owned freehold. In this instance the land will still not be freehold. As the land will only be sold to foreign investors as leasehold property developers will usually lease the land to the owner of the property for 30 years. The option to increase this for a further two more 30 years periods will be available which should give a total lease length of 90 years. Contacts to this effect will usually also state that if the current Thai laws regarding foreign investors changes then the option will be there to buy the lease.

It is also possible for the purchaser to set up a company in order to buy the lease on the land. The BVI Company (British Virgin Islands) option will also make resale to foreign investors simple as the company can be transferred to the new owners. This means that changing the title deeds on the land and the property will be unnecessary.

Many expats and other foreign investors buy condominiums in Thailand as the process to do so is very simple. Thai law allows foreign investors to own the property completely (freehold) although most buildings are only allowed to have 49 per cent of its condos owned by non-Thai citizens. If a building has the correct permits then there is no limit to how many homes within the block are owned by foreigners. If it is a new development then there may be the option to own the property leasehold or freehold. The lease hold option is usually offered on properties within buildings that have already met their 49 per cent quota of foreign ownership.

For a foreign buyer to be able to purchase the freehold ownership of a condo in Thailand the funds for the purchase must be transferred from a bank outside Thailand to a Thai bank account. The Thai bank will then need to record this transaction and issue a foreign exchange certificate known as a Thor Tor 3. This should state that the funds are for the purchase of a condo and must be at least equal to the value of the property. If an expat is an official Thai resident then they can purchase this freehold without the need to transfer the funds. The documentation needed in this instance includes a passport, residence permit and a house registration document.

Negotiations in property purchase are usually handled by an estate agent. They will look into all the items included in the sale and any issues relating to leaseholds. Buyers should hire a law firm to carry out a comprehensive title search and land survey. This is to ensure that the person selling has the title to both the property and the land on which it sits and it is not uncommon for a person to have taken out a loan using the land as collateral, which means that it officially belongs to the bank until the loan is repaid. If you are purchasing a condo then the title report should tell you if there are any outstanding fees on the property.

An engineer’s inspection is recommended to ensure that the property is structurally sound and that the electrical and plumbing systems are in good working order. This inspection can help with the negotiations as if there are problems the seller can be asked to correct them before the sale is completed.

The contract when you are purchasing a property will be drawn up either by the agent or the seller or even the purchaser, and this is signed by all parties once an agreement to purchase has been reached. The deposit is paid when this stage is reached. There is no law which states that the documentation needs to be notarised but any copies of the documentation need to be signed to show that they are true copies of the original. Anyone who is named on the documentation needs to sign it and it should show everything that is included with the sale.

A final check at the property is required before the seller and buyer meet up to sign all the documentation. This is usually done at the real estate office or at a lawyer’s office. If a power of attorney is not issued then a visit to the Land Office is required. The purchaser will need to provide a certain amount of documentation at this stage. This includes a passport or other form of ID, a house registration document if the purchaser has qualified for one, any marriage or divorce documentation if this is applicable, a power of attorney form if a lawyer or other third party is dealing with the sale on their behalf and a foreign exchange transfer form from the bank if the purchase is of a condo.

If the purchaser is obtaining a mortgage then there will also be a requirement to provide documentation from the bank as the land title will be put in the bank’s name.

All documentation in the property purchase procedure is in Thai, although if requested English translations can be provided. Receipts are issued for all monies paid and a document to confirm the purchase is given to the purchaser when they collect the keys to the property. The documentation can be notarised at this stage although it is not compulsory. If this is the case then a fee will need to be paid to the solicitor or notary carrying out the work. If a lawyer has been involved in the purchase – this is highly recommended – then fees are also applicable. The fees charged are set by each lawyer so it is worth calling a few for quotes before the purchase procedure begins.

The best way to find a reputable lawyer in Thailand is to find one on a personal recommendation but it is also possible to find a lawyer through the Thai Bar Association. The website is available in Thai only.

Useful Resources

The Thai Bar Association
http://www.thethaibar.org/index.aspx (site in Thai)