Published on Nov 15, 2002
Thai property law states that with a few exceptions, like a Board of Investment approval or suitcases full of money deposited in a Thai bank, foreigners are not allowed to own freehold land. They can only lease the land for a maximum of 30 years. But Thai law has many grey areas; in fact, it seems at times it has more grey areas than black and white areas.
In 1999, the government lurched out of the 19th century to amend the property law to allow a Thai spouse (male or female) of a foreigner to buy land.
Unfortunately it only lurched as far as the early 20th century. For the spouse to buy land, proof is required that the money used to purchase the land is legally the Thai partner's, with no foreign claim to it. Get divorced or separated and the Thai "ex" gets to keep it all. Even if the Thai spouse dies, the foreigner has no claim to the land and there is nothing to stop the relatives from moving in (if they haven't already) and booting you out.
If you want a house to call your own without the prospect of your spouses' relatives circling hungrily, this is not a good option.
Most foreigners who "own" land and houses, as opposed to condos, which can be owned outright, go for a leasehold agreement of typically 30 years, with two prepaid 30-year renewals. The lease will include clauses that automatically allow freehold ownership if the laws of foreign ownership change in the future, and the right to sell and/or transfer the property.
This gives you 90 years with strong backup, making it effectively ownership.
Just to complicate things a little, while you can only lease land, all the buildings, either on the land when it was purchased, or improved or built by you after purchasing the land, are yours freehold. Technically this means that once the lease expires, the owner of the land must purchase the building(s) at an independently and legally valued price, or negotiate another lease period. God knows how that can work.
The structure of a lease agreement needs to be watertight. But because this has become the preferred way of holding land in Thailand for foreigners, this type of lease agreement has become more or less a template, with add-ons to suit individual buyer's needs.
But don't draw it up yourself. Get the advice of a lawyer versed in such things. And don�t sign anything or hand over any money until you fully understand and are happy with what's written on the lease agreement.
One thing you need to be aware of is the title status of the land you are purchasing. In much of upcountry Thailand, including favorite places to buy for foreigners like Phuket, Ko Samui, Pattaya and Hua Hin, most land has not been surveyed or has been dubiously titled.
Land is titled depending on its survey status. Make sure of the land title before you buy, often prices vary greatly depending on the type title, or you might find someone else laying claim to your rai after just after you finish building your retirement home.
"Chanott ti din" are title deeds with land accurately surveyed. If you have one, it gives you incontestable possession of the land. The most developed areas of provinces have these titles. But even in farang-friendly Phuket, for example, only 10 per cent of the land is under this title.
As it stands, most "titles" around the country are "Nor Sor Sam" or "Nor Sor Sam Kor". They are land title deeds in as much as clear records of ownership are maintained, and that they may be sold or leased, but they tend to be less accurately surveyed than Chanott titles.
If purchasing Nor Sor Sam-titled land that lacks clearly defined physical boundaries, ask the owner to stake out the boundaries and then ask neighbouring landowners to confirm his work.
And there are more. Sor Kor Nung, Tor Bor Tor Hoc, and Tor Bor Tor Ha are essentially squatter's rights registered at the district office for a small fee. Unlike the Chanott and the Nor Sor Sam Kor, they cannot legally be sold, nor can you build on the land if you are stupid enough to buy it. So be a prudent foreigner and ignore the Sor Kors and Tor Bors.
Oh yes, I almost forgot one: the Sor Bor Kor. These are true title deeds, accurately surveyed and pegged (like a Chanott). They can be mortgaged and developed. But the big but is they cannot be leased, sold or transferred.
So, also ignore Sor Bor Kor.
Chanott and the Nor Sor Sam Kor are the only titles over which a registered right of ownership or lease. Stick to them.
The Acquisition of Land for Residential Purpose by Aliens
An alien bringing money not less than Baht forty million as specified in the Ministerial Regulation into the Kingdom for investment may apply for acquisition of land for residential purpose not more than one rai in area, provided also that permission must be obtained from the Minister. Under section 96 bis of the Land Code, the application for such acquisition of land shall be in accordance }
with rules, procedures and conditions prescribed in the Ministerial Regulation as follows:
1. In the case of an alien, who brings money for investment and wishes to apply for permission to acquire land for residential purpose, shall lodge an application (Alien 4 Form) to the competent official under section 71 of the Land Code together with the following documents:
1.1. An alien identification card issued by the Police Station in whose jurisdiction the alien is domiciled or a certificate of residence issued by the Immigration Division, National Bureau of the Royal Thai Police Force or a passport indicating the nationality of the alien;
1.2. Evidences of an investment in the business or activity that falls under Ministerial Regulation prescribing rules, procedures and conditions concerning the acquisition of Land for residential purpose by aliens B.E. 2545:
1.2.1. Letter of investment confirmation from bond seller and bonds of Thai Government, bonds of Bangkok of Thailand, bonds of State Enterprise or bonds which the Ministry of Finance secures the capital or interest;
1.2.2. Letter from the Asset Management Company confirming that an alien has invested in property mutual fund, property mutual fund or mutual fund for resolving financial institution problems established under the law on Securities and Stock Exchange, and an evidence of investment in such fund;
1.2.3. Evidences concerning investment in share capital of a juristic person who is granted promotion of investment under the law on promotion of investment, certificate of registration as a juristic person, name list of the juristic person�s share holders, and a certificate indicating that such juristic person is granted promotion of investment from the Board of Investment;
1.2.4. Evidences of engagement in an activity that entitles for being granted promotion of investment under the law on promotion of investment according to the announcement made by the Board of Investment, certificate of registration as a juristic person, name list of the juristic person�s share holders, and the Board of Investment�s letter indicating that an activity being operated entitles for being granted promotion of investment.
The evidences mentioned in para. 1.2.1 to 1.2.4 either the evidence in one para. or one combines with the other(s) can be used but the total amount shall be not less than Baht forty million.
1.3. Evidences of bringing a foreign currency into the Kingdom or the withdrawal of themoney from a foreign currency account or from a non-resident Baht account for investment.
Either one or more of the above mentioned evidences can be used but the total amount shall be not less than Baht forty million.
1.4. In the case of the land to be acquired is not located in Bangkok Metropolis, Pattaya City or Tessaban (Municipality); the letter of confirmation from the Provincial Office of Town and Country Planning is required certifying that the land to be acquired is located within a residential zone under the law on Town Planning.
1.5. Letter of Ministry of Defense or of the agency concerned confirming that such land is not located in a military safety zone under the law on Military Safety Zone.
1.6. The sketchy map showing the location of land seeking for permission.
1.7. In the case where an applicant has already had right on land by the time the application is being lodged, an applicant shall produce such land right document;
2. A person who is granted permission shall maintain the investment period not less than five years. He/she is required to produce the evidence of possession in the investment in 1.2 as the case may be as current, which shall be not less than Baht forty million, to the competent official according to section 71 once a year, on five consecutive years and each year shall be no later than
the date making the acquisition registration of the aforementioned land.
3. A person who is granted permission shall utilized such land for a residential purpose of his/herself and the family in a way that is not contrary to the local custom or good living of the local community.
4. A person who is granted permission shall inform such land utilization for a residential purpose to the competent official of land office according to section 71 within sixty days as from the date of utilization.
5. A person who is granted permission shall facilitate the competent official supervising the use of such land to ensure that the utilization is in accordance with rules and conditions prescribed in the law once he/she receives a written notifications from the competent official under section 71.
6. If a person granted permission withdraws an investment in the business or activity before the due date of investment in 2, he/she shall inform in writing to the competent official according to section 71 within sixty days as from the date of making the withdrawal.
7. A person granted permission shall utilize such land for residential purpose within two years as from the date of the land acquisition registration.
8. If a person granted permission does not comply with the rules and conditions in 2-6, the Director General shall have the power to order such person to dispose of the land in a portion of his possession within the period of not less than one hundred eighty days and not more than one year.
If the time limit elapses the Director General shall have the power to dispose of such land. Also, if the person does not comply with the condition in 7, the Director General shall have the power to dispose of such land.
9. Any foreign language document shall be translated into Thai language. The translation shall be certified according to the Ministerial Regulations (B.E. 2540) issued under the Purview of Administrative Procedure Act B.E. 2539. (Phraratchabunyat Vithipratibut Ratchakarn Thangpokkhrong B.E. 2539)
10. In the case of a person bringing money into the Kingdom to the amount of Baht forty million for investment and has bought the land less than 1 rai, if later and within the period of investment, that person wishes to buy additional land, in this instance, the documents attached to the current investment can be used along with the application for acquisition of the additional land.