5 Things to Know Before Buying Property in Thailand: A Guide for Foreigners

Published: April 25, 2025

Thailand is an attractive destination for foreigners looking to purchase property, whether for investment, retirement, or as a second home. However, Thai laws regarding foreign property ownership are complex and filled with restrictions that need to be understood. This article presents five essential things foreigners should know before deciding to buy property in Thailand.

1. Land Ownership Restrictions

The most important issue foreigners must understand is that Thai law does not allow foreigners to directly own land, except in special circumstances.

Legal Restrictions

Land Code: Prohibits foreigners from owning land in Thailand unless there are special international agreements or special permissions
Exceptions: Large investments through the Board of Investment (BOI) may allow permission to own land for residential purposes up to 1 rai (1,600 square meters)

Options for Foreigners

Long-term leases: Maximum 30-year lease with two possible renewals, totaling 90 years
Setting up a Thai company: Owning land through a Thai company where foreigners hold no more than 49% of shares
Purchasing through a Thai spouse: However, there must be documentation confirming that the money used for purchase is the separate property of the Thai spouse

2. Condominium Ownership Rights

The good news for foreigners is that Thai law allows foreigners to directly own condominium units, but with certain limitations.

Condominium Ownership Conditions

Condominium Act: Foreigners can own condominium units but not exceeding 49% of the total area of the condominium building
Foreign currency transfer: Money must be brought into Thailand as foreign currency
Foreign Exchange Transaction Form (FETF): This document from the bank is required to verify the source of funds

Additional Considerations

Name on title deed: Ensure your name is correctly listed on the title deed
Transfer fees: Approximately 6.3% of the assessed value or purchase price (whichever is higher)
Land and building tax: Must be paid annually according to prescribed rates

3. Due Diligence

Thorough due diligence is a crucial step for foreigners looking to buy property in Thailand to avoid future problems.

Title Verification

Land/Condominium Title Deed: Verify authenticity and usage restrictions
Building permits: For newly constructed houses or buildings
Encumbrances check: Such as mortgages, servitudes, or other restrictions

Developer Verification

Company history: Check reputation and past projects
Financial status: Financial stability of the developer
Legal disputes: History of litigation or disputes with customers

Area and Community Verification

Zoning laws: Check land use regulations in the area
Future developments: Such as road construction, shopping centers that may affect property value
Utilities: Availability of water, electricity, and other utilities

4. Taxes and Related Fees

Buying property in Thailand comes with various costs and taxes that foreigners should be aware of and plan for in advance.

Transfer Fees

Transfer fee: 2% of the government-assessed value
Specific Business Tax: 3.3% (including local tax) for sales within 5 years of acquisition
Stamp duty: 0.5% of the sale price (not charged if Specific Business Tax is paid)
Withholding tax: Calculated using a special formula, depending on the assessed value and duration of ownership

Annual Taxes

Land and building tax: Rates vary according to usage (residential, commercial, or vacant land)
Common area fees: For condominiums or houses in housing projects

Taxes When Selling Property

Income tax on sales: Foreigners must pay income tax on profits earned
Capital gains tax: Rates vary depending on the duration of ownership

5. Purchase Structure Options

Beyond direct purchase, foreigners can consider other options for structuring the purchase of property in Thailand.

Long-term Lease

Advantages: Easier than setting up a company, no company administration costs
Limitations: Not ownership of the property, lease agreement must be registered at the Land Office
Term: Maximum 30 years, renewable twice more for a total of 90 years

Setting Up a Thai Company

Advantages: Can own land through the company
Limitations: Must have Thai shareholders of at least 51%, costs for establishing and administering the company
Caution: Setting up a company with foreigners as the actual controllers using Thai nominees may be illegal

Purchasing Through Trusts or Other Investments

Real Estate Investment Trusts (REITs): Options for investing in commercial real estate
Investment through foreign companies: May have tax advantages in some cases, but must consider double taxation agreements between countries

Conclusion

Buying property in Thailand can be a good investment for foreigners but comes with legal complexities and restrictions that must be thoroughly understood. Careful planning, detailed property verification, and consultation with a real estate law expert are essential steps that will help make your investment successful and secure.

The decision on which ownership structure to use depends on your objectives, budget, and long-term plans. The right choice for one person may not be suitable for another. Therefore, consulting with a real estate law expert is important to get advice appropriate to your specific situation.

Finally, while there are legal restrictions for foreigners buying property in Thailand, with good planning and appropriate legal advice, you can invest in Thai property safely and successfully.

Need consultation about buying property in Thailand? The real estate law experts at Thai Visa Legal are ready to assist you. Contact us today for a free consultation!

Note: The information in this article is general information as of the publication date and should not be taken as legal advice. Regulations may change. Please consult with a real estate law expert before taking any action.