Is There a Way to Own a Land in Thailand?

There are plenty of investment opportunities in Thailand. Real estate is one of the most lucrative. This naturally led foreign investors to seek ways to tap into this market. The only problem is Thai legislation which has set certain parameters on the extent to which foreign investors can buy property in Thailand.

There are plenty of investment opportunities in Thailand. Real estate is one of the most lucrative. This naturally led foreign investors to seek ways to tap into this market. The only problem is Thai legislation which has set certain parameters on the extent to which foreign investors can buy property in Thailand. As a general rule, Thai law prohibits foreigners from owning land. This rule applies to both foreign individuals and juristic entities, that is, partnerships or companies. However, there are certain exemptions to this rule, which would allow foreigners to own land.

 

Reasons for restrictions of foreign land ownership The right to own land is often seen as a national security issue by developing countries like Thailand. One of the most common reasons to ensure that ownership of land rests with its citizens is to avoid unnecessary speculation if huge foreign capital inflows were allowed to enter the country unchecked. This could possibly lead to sky rocketing property prices which would be inaccessible to most of the indigenous people within the country.

 

The rules on foreign land ownership Under section 97 of the Thai land law, a foreigner is defined as either an individual born of foreign decent or juristic entities. Originally, foreigners could own land in Thailand by treaty, under section 86 of the Thailand Land Code Act. But the last active treaty for land ownership in Thailand was terminated in 1970. Now, foreigners may only own a condominium unit for as long as the total ownership of a condominium project by foreigners does not exceed 49%. Another option is to marry a Thai. However, the foreigner must sign a letter declaring that the property is solely owned by the Thai Spouse and that any interest in the land is waived.

 

Exemptions of land ownership by foreigners There are certain exemptions that apply to foreigners, when it comes to land ownership depending on the type of investment you are after. These exemptions are quantified by two laws:

 

1. The Investment Promotion Act

Under section 27 of this act, the Board of Investment is authorized to grant a juristic entity permission to own land, with the objective of conducting a promoted activity. This law is meant to stimulate direct foreign investment in the country, through the establishment of factories. The area of land under question, must be approved by this Body with the aim of determining whether the allocated area and construction plans are sufficient for the promoted activity. Land use will be restricted to the stated activity and should the business be dissolved, the land must be sold within one year.

 

​2. The Condominium Act of 1990

Under section 19 of the revised condominium act, qualified foreigners are allowed to own individual condominium units, provided that the total ownership of a condominium project by foreigners, does not exceed 49%.  According to Condominium Act B.E. 2522 (1979) a condominium refers to a building that is separated into portions, which can be owned individually, plus a common ownership on the common property. However, there is a restriction on land ownership, as far as traditional condominiums are involved. The land on which the condominium project is located does not belong to the owners individually but to the common property. In simpler terms, ownership of the condo is restricted to the airspace in which it is located. Some developers have started building condominium units, in the shape of a town house. The building itself can be subdivided into sections, which are sold as condominiums. The piece of land located outside the building is acknowledged as personal property. This effectively allows foreigners to own both a piece of the building and the land adjacent to it.