Anyone buying a property in Thailand must ensure that their purchase is done according to the laws of the Kingdom.
In certain respects these laws are not dissimilar to those in most western countries. There is, however, one major hurdle that foreigners must contend with: they are prohibited from owning land.
For the sake of clarity, this also refers to any villa, estate house, shophouse or townhouse. The ownership of all of these are inextricably tied to the land.
Foreigners are allowed to own such homes, but only the physical building itself. The land it sits upon must be leased. While there are properties that have been explicitly legally structured for foreign freehold ownership, these are not yet commonplace.
There are extremely limited and exceptional circumstances under which a foreigner can purchase land, and these are covered in a separate article. Please read here:
Thai Culture and Foreign Ownership
Embedded in Thai culture is the intrinsic belief that Thailand be, first and foremost, a country for the Thai people. Thai property law reflects this sentiment, and it protects land ownership for Thai people.
Land ownership laws in many countries are influenced by a cultural bias, in this case Thai culture and Thai laws. The authorities have always worked to preserve this element of Thai culture, irrespective of how many foreigners live here.
Over the years, there have been countless rumours of pending changes to land ownership laws. However, there has never been any true indication that the law will ever actually change. It is safe to say that nearly every non-Thai would at least like to see the laws on foreign ownership be relaxed a little.
Anyone interested in Thailand property deserves help understanding both the letter and the spirit of the law today. And the reality is that Thai law leaves almost no path to either ownership of land or permanent possession of a landed property for foreigners.
This is an inconvenient truth for the multitude of villa developments across the island being marketed to foreigners as freehold property.
The Use of Thai Company Structures
The foreign buyers are encouraged to get around the law by using Thai company structures to purchase landed property. However, a considerable percentage of these arrangements are unlikely to stand up to legal scrutiny.
There are other supposed “loopholes”, but a foreign buyer should be wary of putting their faith (or their money) in supposed technicalities of law. Especially if these technicalities are unlikely to survive a legal challenge.
A number of the “foreign ownership” arrangements have been struck down by Thai courts – some quite recently.
Buyers/investors deserve clear explanations as to why these may not be as rock solid as certain individuals may lead them to believe. In fact, when it comes to landed property, a leasehold contract is the most secure way to occupy a house or a villa for the long-term.
There is always the risk that any attempt by a foreigner to violate either the letter or the spirit of Thai law in this regard will not end well.
If a foreigner wants to stay in Thailand, and have a home here, there are still a number of ways to go about it. Not titled land ownership, but certainly the right to live in a property for as long as they wish, provided they follow Thai law.
This is an excerpt from the Thai Residential Phuket Property Guide 2019/20.
To download your free copy, please click here: