How Foreigners Can Buy Property in Thailand: A Complete Guide

Thailand is one of the most popular destinations for foreigners looking to invest in property. With its stunning beaches, vibrant cities, and affordable real estate, it’s no wonder that many international buyers are interested in owning a home or investment property in the Land of Smiles. However, Thai property laws can be complex, and it’s essential to understand the legal framework before making a purchase. This guide covers everything you need to know about buying property in Thailand as a foreigner.

Can Foreigners Own Property in Thailand?

Under Thai law, foreigners are generally not allowed to own land directly. However, they can legally own certain types of property and acquire land through specific legal structures. The main ways for foreigners to buy property in Thailand include:

1. Buying a Condominium – The simplest and most straightforward option.
2. Leasing Land – Long-term lease agreements.
3. Setting Up a Thai Company – A legal entity that can own land.
4. Investing Through the Board of Investment (BOI) – Special privileges for large investors.
5. Using a Thai Spouse’s Name – An option for those married to Thai nationals.

1. Buying a Condominium in Thailand

Foreigners can own 100% of a condominium unit in Thailand, provided that the total foreign ownership in the building does not exceed 49% of the total sellable area. This is the easiest and most legal way to own property outright in Thailand.

Steps to Buy a Condominium in Thailand

1. Choose a Property – Research condos in Bangkok, Pattaya, Phuket, or Chiang Mai based on your preferences and budget.
2. Check Foreign Ownership Quota – Ensure the building has not exceeded its 49% foreign ownership limit.
3. Make a Deposit – Usually, a small deposit secures the unit.
4. Transfer Funds from Overseas – Foreign buyers must transfer funds from abroad and obtain a Foreign Exchange Transaction Form (FETF) from the receiving Thai bank.
5. Sign the Sale and Purchase Agreement – This outlines the terms and conditions.
6. Pay the Remaining Balance – Finalize payments before the transfer of ownership.
7. Transfer Ownership at the Land Office – The final step where you officially become the owner.

2. Leasing Land in Thailand

Since foreigners cannot own land directly, a long-term lease is a popular option. The standard lease term is 30 years, with options to renew.

Key Considerations for Leasing Land

• Ensure the lease agreement is registered at the Land Department.
• Renewals beyond 30 years are not guaranteed.
• Leases do not provide full ownership rights like freehold properties.
• Legal advice is recommended to draft a secure contract.

3. Setting Up a Thai Limited Company

Another way foreigners acquire property is by setting up a Thai company. A Thai company can own land, but the majority (at least 51%) must be Thai-owned.

How It Works

• The foreigner can own up to 49% of the company shares.
• Thai shareholders must genuinely contribute to the company.
• The company must be actively trading and not a “shell” company solely for property ownership.
• Professional legal and accounting advice is essential.

4. Investment Through the Board of Investment (BOI)

The BOI offers foreign investors land ownership rights if they invest a significant amount in Thailand’s economy.

BOI Requirements for Land Ownership

• Typically for large-scale investors.
• Requires government approval.
• Must contribute to Thailand’s economic development.

5. Buying Property Through a Thai Spouse

If married to a Thai citizen, a foreigner can have property registered under their spouse’s name. However, legal precautions should be taken to protect the foreign spouse’s interests.

Precautions for Foreign Spouses

• The foreign spouse must sign a declaration stating they have no rights to the property.
• Prenuptial agreements can protect financial interests.
• Alternative arrangements, such as long-term lease agreements, are recommended for added security.

Buying Property in Koh Samui

Koh Samui is a top choice for foreign buyers looking for a tropical paradise with strong investment potential. The island offers luxury villas, beachfront properties, and serene hillside retreats.

Key Considerations for Buying in Koh Samui

• Legal Structures – Condominiums are the easiest option, but land leases and company ownership structures are also common.
• Infrastructure and Amenities – Koh Samui has modern hospitals, international schools, and an airport connecting to major cities.
• Tourism and Rental Market – Strong short-term rental potential, making it a great investment location.
• Environmental Regulations – Certain areas have zoning laws that restrict development, so due diligence is crucial.

Steps to Buy Property in Koh Samui

1. Research different areas such as Chaweng, Lamai, Bophut, or Maenam.
2. Work with a reputable real estate agent and legal expert.
3. Check land titles to ensure proper ownership and zoning compliance.
4. Secure financing if needed and transfer funds properly.
5. Complete legal processes and register ownership at the Land Office.

Legal and Financial Considerations

Taxes and Fees When Buying Property in Thailand

When purchasing property, buyers should be aware of the taxes and fees involved:

• Transfer Fee – 2% of the registered value (usually split between buyer and seller).
• Stamp Duty – 0.5% of the registered value.
• Withholding Tax – 1% of the selling price (if the seller is a company) or a progressive rate for individuals.
• Specific Business Tax (SBT) – 3.3% (if the property is sold within five years).

Financing Options for Foreign Buyers

Most Thai banks do not offer loans to foreigners, but there are alternatives. Interest rates for foreigner-friendly mortgage options can vary between 5% and 8%, depending on the lender and loan terms. Additionally, loan eligibility often requires a high down payment (typically 30-50% of the property’s value) and proof of income or assets. Here are some options:

• International Banks – Some foreign banks offer mortgage options for Thai properties.
• Developer Financing – Some developers provide in-house financing.
• Loans from Home Country – Some buyers secure loans from banks in their home country.

Due Diligence Checklist Before Buying Property

• Verify ownership title and check if the land has any encumbrances.
• Confirm the developer’s reputation (for off-plan projects).
• Ensure the project has EIA approval (for new developments).
• Seek legal assistance for reviewing contracts.
• Check the land and building laws applicable to the property.

Conclusion

Buying property in Thailand as a foreigner is possible, but it requires careful planning and legal understanding. While condos provide the easiest route to direct ownership, land acquisition involves leases, company setups, or investment incentives. Key benefits include affordable property prices, strong rental demand, and a desirable lifestyle. However, challenges such as legal complexities, foreign ownership restrictions, and tax obligations require careful navigation. Consulting with a real estate lawyer can help ensure a smooth and secure investment process.

If you’re considering buying property in Thailand, speak with a real estate lawyer or property expert to ensure a smooth transaction.