Home from home: Foreign ownership rules for land and condominiums

Ownership Of Land By A Foreigner 

In theory foreigners cannot own land in Thailand, but in practice they can own up to 1600 sq metres for residential purposes under a Board of Investment (BOI) regulation (Land Code Section 96 bis) that demands, for land purchase, BT40m ($1.3m) to invest in Thailand in special assets or government bonds which benefit the Thai economy. After gaining ownership of land by this method, ownership cannot subsequently be inherited.

A foreign company which invests in Thailand effectively and benefits the Thai economy has a special privilege enabling it to obtain land ownership under Section 27 of the Investment Promotion Act B.E. 2520, Section 44 of the Industrial Estate Authority Act B.E. 2522 and the Petroleum Act B.E. 2515 for the duration of their business in Thailand.

Under Section 93 of the Land Code Act, foreigners who gain ownership by inheritance as statutory heir can gain ownership of the land with the permission of the minister of interior.

Foreigners are prohibited from receiving the land as a statutory heir from a Thai wife, but can receive the ownership of a condominium unit as a statutory heir from a Thai wife.

Therefore, no foreigners will get the permission by the minister of interior. The foreigner can inherit the land as a statutory heir but cannot get the ownership registered, and must sell the land within one year of receiving it.

Foreign Ownership Of Condominiums

Condominium Act B.E. 2522 has a definition of condominium in Section 4 as a “building that can be separated into units for individual ownership which include personal and common properties”.

Nowadays, foreigners like to purchase real estate in Thailand and condominiums are a popular option. Foreigners who legally enter Thailand can own a condominium. Foreigners can own condominium units in condominium building (apartment unit or flat) everywhere in Thailand under Section 19, as long as the purchase does not cause the foreign ownership to exceed 49% of total floor area under Section 19 bis of the Condominium Act B.E. 2522.

Condominiums in Bangkok and Pattaya may not exceed the 49% of the foreigner ownership ratio restriction. Foreign freehold ownership of a Thai condominium requires the following: a) Not more than 49% of the total floor area in a condominium can be foreign-owned; the remaining 51% must be Thai-owned (i.e. in case of 100 equal apartment units in a condominium building only 49 can be foreign-owned), and; b) When foreign ownership is available, the foreigner buying a condominium must qualify for ownership under section 19 of the Condominium Act. Usually this means having properly brought into Thailand foreign currency at least equal to the total purchase price of the condominium, and having exchanged this amount into baht in Thailand.

In cases where the quota for foreigners in a given condominium is already filled, foreigners cannot obtain possession of any of the remaining units in that condominium.

To solve this problem, foreigners may find a Thai national to buy the unit and transfer it to the foreigner under a lease agreement.

Leasing

Leasehold gives the lessee the right to use and possess the unit for a period of time. Normally this is 30 years, and renewal of the lease agreement for another 30 years is possible. Lease of a condominium unit in Thailand is the best way to possess the condominium if the foreign ownership quota has been filled. The lessee will not have the ownership of the unit, nor sell the unit to another person, nor have co-ownership in the condominium, nor voting rights in meetings of the building’s owners.