Are you considering purchasing property in Thailand as an overseas investor? If so, it’s worth considering the tenure of the property which you wish to purchase. While Thailand is much more open to overseas investment than many other Asian countries, restrictions do still apply.
Generally speaking, buying actual land in Thailand is a “no-go” for foreigners; however, freehold purchases can be made when purchasing a condominium.
We explore how and why you may choose to buy freehold property in Thailand.
Why choose freehold property in Thailand?
Leasehold properties in Thailand tend to have much shorter leases than you may be used to in areas such as the UK. As an overseas buyer, you would typically be granted a 30-year lease which provides rights to the land for that term. However, unlike in the UK, there is no automatic right to renewal. So, while a good developer will include clear renewal clauses which are built into the original contract – this may not always be the case.
Of course, because of this, initial capital costs are often lower than when purchasing a freehold property, it is still very much the case that freehold can offer an investor with longer-term objectives rather a safer route to ownership.
However, consideration should be given to the location, demand and your personal objectives when deciding between a freehold and leasehold property in Thailand. For example, if you are looking for a Bangkok apartment – freehold may be the preferred option – just as it would be in a city centre apartment in the UK.
What properties can be bought freehold in Thailand?
The most popular and straightforward way for an overseas investor to own freehold property in Thailand is to purchase a condominium.
Under Thai law there is a quota reserved for Thai nationals – most usually 51% of the overall unit size, leaving the remaining 49% open to purchase under freehold from foreign buyers.
Provided the requisite Thai-owned percentage within a given development is maintained, a condominium unit can be fully and legally titled in the name of a foreigner. This means permanent ownership, in perpetuity, until such a time as the owner chooses to sell the unit.
Additionally, when an overseas purchase buys into a condo, the title will usually include a fractional interest in the building and all of the common areas – such as gardens, swimming pools, and other communal spaces – giving you as the buyer a share of your vote in the owners association.
Which properties cannot be owned freehold by an overseas buyer?
Generally speaking “landed property” cannot be owned by a foreigner in Thailand. Landed property refers not just to the land itself, but things like houses, villas or bungalows built on top of it.
Thailands laws which govern foreign ownership pretty much forbid providing title to any and land to a non-Thai national, therefore with very few exceptions – the fact is that foreigners are unable to buy land in Thailand.