How to purchase land in Thailand?
In Thailand, foreigners are not allowed to directly purchase lands, however, there are some legal ways, albeit in an indirect manner, and here is a brief guide that will list down the possibilities foreign investors have.
-
Restrictions on buying land in Thailand
-
How to buy a land in Thailand?
-
Leasehold agreement
-
Owning a limited company
-
Benefit from marriage or a close friend
-
-
How much does a land cost in Thailand?
-
What is the process of buying a land in Thailand?
-
Can I easily re-sale my land?
Restrictions on buying land in Thailand
Asides from very few exceptions, foreigners, companies and individuals, are not permitted to buy lands in Thailand.
A foreigner can buy a house or a condominium without much restrictions, but not the land where the house sits on, according to the property laws. This is something that should always be considered whenever you are looking to invest in properties in the country.
There are, however, alternatives that will still allow foreigners to take advantage of property investment opportunities in the country. This includes long term opportunities that allow the foreigner to own their own home, and/or to profit from rising house prices.
How to buy a land in Thailand?
Foreign investors have three options to purchase lands.
Leasehold agreement
One leasehold agreement allows investors to rent lands from the landowners on a long-term basis.
During the duration of the leasehold, the landowner will retain full rights over the land. It would basically be the same as if they owned the land outright, except a leasehold can only last for a maximum of 30 years.
The landowner can agree to another leasehold when the existing one expires, but they are under no obligation to do so.
Owning a limited company
Another popular option for owning lands in Thailand is for the foreigner to open their own Thai company, and then have the land purchased in the name of that company.
The main limitation of this method is that a Thai company is not allowed to be majority-owned by foreigners. However, a foreigner is permitted to own more shares than any other shareholder in a Thai company, and other shareholders will usually sign off their company rights. The land will remain in the name of the company and not their own name.
Benefit from marriage or a close friend
Another way to buy a land, is to purchase it in the name of a close friend, partner or to marry a local.
These methods are risky because the foreign investor will have no legal standing if the partner decides to take their land for themselves, and therefore, talking to a real estate agent and a lawyer would be ideal if you decide to go for this method.
Landowners will be given a chanote (โฉนดที่ดิน) certificate, which is considered to be the highest certificate where land ownership is concerned, giving the holder full legal rights to the land. The land is also fully surveyed, and the document will contain all details of the landowner’s ownership.
How much does a land cost in Thailand?
The cost of lands varies between the cities and there are interesting opportunities to invest comparing to the cost of land in America, Europe or other major Asian cities like Hong Kong or Singapore.
- The average cost of undeveloped land in America is $270,994 per acre, while the average price per acre in Thailand is $6,500.
- The price of undeveloped plots of land is estimated to be around 45% of the value of similar developed plots in the same area.
A brief estimation of undeveloped land prices in Bangkok values land at around 20,000 baht, or around $640, per square meter, while In Koh Samui, the average cost was around 14,000 baht, or around $450, which makes the island a great market for real estate investors.
While land in Koh Samui is less expensive than land in Bangkok, it is not the only reason to invest in the island. The Thai government has placed development restrictions, thus increasing competition. This will likely increase land prices considerably in the future, making for some strong opportunities for an excellent return on investment.
If you are interested in investing in Thailand, visit our lands for sale in Koh Samui.
What is the process of buying a land in Thailand?
When trying to buy a land, it is advised to go through a Thai real estate lawyer. They will be able to ensure that everything is correct and that there can be no legal challenge to the land. The land may also need to be surveyed to ensure the title deeds contain accurate information.
Of course, for foreigners, the land will need to be in the name of their Thai company, or in the name of a Thai friend or partner. The process of purchasing land will usually take up to 60 days, although it will often be considerably faster than this.
Can I easily re-sale my land?
The process of reselling lands is fairly straightforward, and a real estate agent and a lawyer will be able to do much of the work for you.
- If the land was held in the name of a Thai company that you own, then the funds will be transferred to your company account.
- If the land was owned in the name of a Thai friend or partner, then the funds will be transferred directly to their account. You will have no legal ownership of this money.