Foreign nationals are entitled to purchase real estate in Thailand and many of them make full use of this opportunity. It’s not too difficult to buy a villa or an apartment in the country but there are some legal nuances and intricate facts that you need to be aware of if you don’t want to make a mistake. The form of property ownership, the taxes, the algorithm of entering the deal, agents’ fees – we discuss these and other related issues below.
Thailand is a highly popular tourist destination in the first place but some foreign nationals choose to buy property there to use it for their own purposes or to let it on a lease.
Local developers use schemes that allow guaranteeing income from rental property and this fact contributes to the continual growth of investments into real property in Thailand.
The most popular places where foreigners buy property in Thailand are Phatthaya and the island of Phuket even though property on the island of Samui is also in demand. People from China, Hong Kong, Russia, and some other countries often buy real estate in Thailand. More information about investment and business opportunities in Thailand you can find here.
Rights and obligations of foreign property buyers
Non-residents can buy any real property in Thailand but there are some restrictions pertaining to the purchase of land.
Two forms of property ownership are available in Thailand:
- Freehold — in essence, it will be our private property. The Freehold option allows selling or giving the property away, leaving it to your heirs or letting it on a lease. You will be issued an ownership certificate with the Thai coat of arms on it.
- Leasehold — it will also be your private property but for a limited period. As a rule, the agreement is signed for 30 years and then it can be prolonged twice (thus, you can hold the property for up to 90 years). Even though it’s a long-term lease, you can dispose of your property in any way you like (see above).
You can also use the Freehold option to buy an apartment in a condominium. However, only 49% of the condo apartments can be free-held by foreigners: the remaining 51% has to be lease-held.
The same holds for houses and villas: you can use the Freehold or the Leasehold option to buy a house or a villa in Thailand. At the same time, you can only lease the land plot on which the house/ villa stands.
This restriction can be partially overcome if you make the land the property of a legal entity (a business company) rather than your personal property. But then again, 51% of the company has to be owned by a Thai national.
|Form of property ownership||Freehold||Leasehold|
|Rights||Full ownership rights without time limits; can be sold, given away, bequeathed.||Full ownership rights for up to 90 years; can be sold, given away, bequeathed.|
|Property price||≈ 10% higher||≈ 10% lower|
|Property tax, of property cost||2-3%||1.1%|
|Property for sale||You are free to sell it without asking for permission||The property owner has to give consent if you want to sell the property|
Registering the property in the name of a company in Thailand
You have two options to choose from if you would like to write the property in the name of a company rather than your personal name.
- Register a new company in Thailand
In accordance with Thai laws, a foreigner can own not more than 49% of a local company. Consequently, you will have to involve a local person or two.
- Buy a company that already has real property registered in its name
If you choose this option, you should check the company carefully because you may be buying debts together with the company and the real estate registered in its name.
Please note that the Thai authorities are closing down ‘sleeping’ companies that hold real estate without performing any business operations. We suggest that you should consider registering property in the name of a company only if you plan to engage in active business operations in Thailand. Besides, establishing a company in the country would involve some additional costs: $2,000 to $3,000 to register the company and $1,000 per year to keep the accounting records.
Do foreign property owners qualify for residence permits in Thailand?
No, they do not but there is a unique visa program in the country called ‘Thailand Elite’. An investment of $16,000 or more will make you qualified for a long-term visa. The visa validity term can be from 5 to 20 years. Some developers (especially those building elite residential complexes) advertise this opportunity to boost sales.
Join the elite
The visa program has been in operation since 2003 in Thailand. In addition to an opportunity to legalize your prolonged stay in the country, you can gain access to some VIP services if you apply to the Thailand Elite program.
The program participant can live in Thailand as long as he/ she wishes. You can leave Thailand and return every other day if that is what you want to do: no additional permits are going to be required. The visa validity term will depend on the investment amount and it can be 5, 10 or 20 years. No minimum period of physical presence in Thailand is imposed either.
Who may want an ‘elite’ visa to Thailand?
Those who plan to spend a long time in Thailand would benefit from acquiring an elite visa to the country. Retirees often spend the cold season there because it’s never cold in Thailand. Freelancers and affluent business owners also often choose to relocate to the resort areas of Thailand.
Thailand Elite can also be a good solution if your legal stay in the country is coming to an end (for example, your current visa or job contract is expiring soon). As we have noted above, the minimum required investment amount is quite affordable.
Tax regimes for elite visa holders
You are free to choose your fiscal status – resident or non-resident – if you hold an elite visa. Each of the options will bring its own advantages.
If your income comes from abroad, it makes better sense to remain a non-resident of Thailand for fiscal purposes. Foreign income is not taxed in Thailand if it is not transferred to the country in the same year when it has been obtained. If you have a source of income in Thailand, however (if you rent out a piece of property, for instance), you may benefit from becoming a tax resident of the country.
VIP services available to elite Thai visa holders
Thailand Elite team will take care of the tasks that a traveler usually has to handle.
You can use the VIP areas at the airport and pass through the passport control fast. Your personal assistant will take you to your place of residence in a limousine.
Round-the-clock concierge service is going to be available to you during your stay in Thailand. You can acquire assistance in dealing with the immigration authorities, solving legal issues, opening a local bank account, applying for a driving license, buying an insurance policy, finding a job or business partners, and so on.
Special discounts in the best shops, hotels and restaurants for you! You can also play golf, visit a SPA salon, have a complete medical check-up, and do many other pleasant and useful things.
Thailand is famous for the high quality of its medical services and rightly so. Thailand Elite program participants can use the local medical institutions at discounted prices.
Thailand is a beautiful country with a perfect climate and the visa program that we have described above brings numerous advantages. At the same time, the minimum required investment amount – let us be frank – is very low.
In conclusion, the process of purchasing property in Thailand offers opportunities for foreign nationals, with popular destinations being Phatthaya, Phuket, and Samui. The rights and obligations of foreign property buyers include options for Freehold and Leasehold ownership, each with its advantages.