The risks when buying Phuket property are real, even though the island remains one of Thailand’s most attractive real estate markets. Titles, permits, developers, contracts, and agents can all pose problems if not handled properly. This guide explains the key risks and how to reduce them with documentation checks, due diligence, and legal oversight.

Market Risks When Buying Phuket Property

Phuket remains one of the most attractive property destinations in Southeast Asia. The lifestyle, beaches, and views draw thousands of buyers each year. But while the vast majority of transactions are safe and legal, the market also carries its fair share of risks.

Unlike in many Western countries, there is no central licensing authority for real estate agents or developers in Thailand. This lack of oversight means:

  • Some agents operate with little or no legal training.

  • Misrepresentation of ownership structures or investment returns can occur.

  • Conflicts of interest are common, especially when commissions are paid by both buyers and sellers.

Many new buyers approach the market with a “holiday mindset” — falling in love with a property or a deal — without understanding that property law in Thailand is complex. Without proper legal due diligence, this approach can lead to serious financial consequences.

1) Land Title and Boundary Risks When Buying Phuket Property

The risks when buying Phuket property often start with the land itself. Many buyers do not realise there are different grades of land titles in Thailand, and some are not legally suitable for building or transfer.

Key risks include:

  • Buying on unofficial or unregistered land.

  • Purchasing land that encroaches on national park or forest areas.

  • No legal road access to the property.

  • Disputes over boundaries or overlapping claims.

Tip: Always conduct a full land title search at the Land Department, and request a survey if access or boundaries are unclear.

For official information on land titles and ownership transfers, visit the Thailand Department of Lands.

2) Permit, Zoning and Licensing Risks

Another of the common risks when buying Phuket property is incomplete or missing permits, which can cause projects to stall or be demolished.

  • Every development must have building permits and comply with zoning regulations.

  • Large projects often require Environmental Impact Assessments (EIA).

  • Condominiums need correct Condominium licensing, while nightly rentals require a hotel licence.

Tip: A lawyer should confirm that all approvals are valid before you transfer any money.

3) Developer and Project Risks

Among the overlooked risks when buying Phuket property are projects marketed with inflated returns, but backed by weak or unproven developers.

  • A weak track record can lead to delays, poor finishes, or abandonment.

  • Some developers over-promise with inflated yield guarantees.

  • Financial instability increases the chance of stalled construction.

Tip: Visit past projects, speak to buyers, and review the developer’s corporate history.

4) Contract and Payment Risks

  • Reservation and sale agreements must include clear refund and exit clauses.

  • Avoid front-loaded payment schedules without escrow or milestone protections.

  • All fees, taxes, and ongoing costs must be disclosed.

The Risk of Losing Your Deposit

Large reservation deposits are common in Phuket, but they can be lost if a project is delayed, abandoned, or never properly licensed. Because Thailand has no government-mandated escrow system, deposits are not automatically protected.

Tip: Only pay deposits once a proper Sales & Purchase Agreement is in place, and have your lawyer verify all permits, licences, and the developer’s track record first. For more details, see our guide on Reservation Deposit Risks.

5) Agency and Information Risks

  • Sales agents are not heavily regulated; some provide incomplete or misleading details.

  • Beware of pressure tactics like “last unit available” or “limited time only.”

Tip: Cross-check all claims with documents and never be rushed.

6) Ownership Structure Risks When Buying Phuket Property

Foreigners cannot own land directly, so the structure matters. Options include:

  • Foreign Freehold Condominiums
  • Leasehold Agreements
  • Usufructs or superficies – long-term rights to use or build on land.
  • Thai company ownership is valid only if the company is a genuine, tax-paying business with real operations, not a shell with nominee shareholders.

Additional risky structures to avoid include:

  • Buying property in a Thai spouse’s name, which offers no legal protection if the relationship changes.

  • Layered leasehold arrangements that stretch beyond what the law allows.

  • Shell companies or nominee structures that may be struck down by the courts.

Tip: Choose a structure that is transparent, legal, and fully compliant, then filter properties that match it.

7) Legal Due Diligence Risks

  • Lawyers should verify title deeds, zoning, permits, quotas, encumbrances, and company history (if share transfers are involved).

  • Contracts should include defect liability periods, handover conditions, and tailored protections.

  • Payments should only be released once due diligence steps are cleared.

Tip: Always use an independent lawyer who represents only you. Avoid lawyers recommended by the seller, developer, or agent, as they may overlook key risks or provide biased advice.

Summary: Risks When Buying Phuket Property

The main risks when buying Phuket property arise from unclear land titles, missing permits, weak developers, vague contracts, and unsuitable ownership structures. Careful due diligence, legal oversight, and a cautious approach will greatly reduce exposure to these problems.

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Conclusion

The risks when buying Phuket property can be managed with clear documents, proven developers, and strong legal protections. With the right approach, buyers can enjoy the benefits of the market while avoiding the most common pitfalls.

Disclaimer: The information contained in this article is provided for general informational purposes only and does not constitute legal, financial, or investment advice. While every effort has been made to ensure accuracy at the time of publication, property laws and regulations in Thailand are subject to change. Readers should always seek independent legal advice from a qualified Thai lawyer before making any property-related decision or transaction.