Thailand Real Estate Law: What a Foreign Buyer Needs to Know

How Real Estate Law Works in Thailand

Thai property law developed out of the civil-law (Romano-Germanic) tradition: the primary source is the Civil and Commercial Code (CCC). For a foreigner, the key feature is not the property institutions themselves - which are familiar - but a strict restriction: foreigners cannot own land outright. They can, however, own a building, a share in a condominium, and hold a range of limited real rights over another person's land. Below is a level-by-level breakdown of the system.

Land: Why Foreigners Cannot Buy It

The prohibition on land ownership for foreign individuals is established in the Land Code Act. A formal exception exists under Section 96 bis: a foreign national may acquire up to 1 rai (1,600 sq m) for residential use by investing at least 40 million baht in approved assets or government bonds and obtaining a permit from the Ministry of Interior. In practice, almost no one uses this route: the conditions are strict, the right is non-inheritable, and it terminates on the owner's death.

Inheritance is a separate matter. If a foreigner becomes a lawful heir to land (Section 93), they still cannot register it in their name - the land must be sold, typically within one year.

A straightforward rule follows from this: any arrangement under which a foreigner effectively controls land through a Thai 'nominee' is unlawful. Section 96 of the Land Code expressly prohibits acquiring land 'on behalf of' or in the interests of a foreigner, and both parties face liability.

A Condominium Unit: The Only Direct Ownership Option

The cleanest option for a foreigner is a condominium. Under the Condominium Act, foreigners may collectively own units in a single building amounting to no more than 49% of the total residential floor area; the remaining 51% must be owned by Thai nationals. This is the well-known '49% quota.'

To register ownership, the purchase funds must be brought into the country from abroad in foreign currency and converted into baht inside Thailand. The bank then issues a Foreign Exchange Transaction (FET) form (formerly known as Tor.Tor.3). Without this document, the Land Department will not register foreign ownership of a unit.

Leasehold - For Land and Villas

When the quota is exhausted, or when the property in question is a villa on land, long-term leasehold is most commonly used. The key rules (CCC Sections 537-571) are as follows:

• The maximum term for a registered lease is 30 years. The '30-year renewals' that developers advertise are merely contractual obligations, not real rights; a new landowner cannot be compelled to honour them.
• A lease is by nature a personal right of the lessee. Upon the lessee's death, renewal arrangements generally terminate (see Section 569).
• The lessee may not sublet or transfer rights without the owner's consent.

Any lease exceeding 3 years must be registered with the Land Department - otherwise it is enforceable for 3 years only.

A House Separate from the Land

Thai law permits separate ownership of a building and the land beneath it. A foreigner may be the full owner of a house even if they do not own the land. Transfer of ownership of the building is made in writing and registered. Important note: the house registration book (Tabien Baan - the yellow Thor.Ror.13 for foreigners) is a record of residence, not a title document. Ownership is evidenced by the building permit or the sale and purchase agreement.

Limited Real Rights Over Another Person's Land

In addition to leasehold, the CCC provides several limited real rights. All of them are registered against the title and strengthen the foreigner's legal position.

Usufruct is convenient for spouses: the Thai spouse owns the land, while the foreign spouse receives a lifetime right of use. Superficies pairs logically with a lease, as it protects the right to a constructed building. A servitude is critical for plots that have no access to a public road.

Land Titles: What Counts as 'Clean'

• Chanote (Nor Sor 4 Jor) - a full title with precise survey data; the best option.
• Nor Sor 3 Gor - acceptable; boundaries are measured and georeferenced.
• Nor Sor 3 - weak: no precise survey, boundary disputes are common, and a sale notice publication is required.

Transaction Taxes (indicative figures)

• Transfer registration fee: 2%;
• Specific Business Tax: 3.3% (where applicable, typically on sales within 5 years of acquisition);
• Stamp duty: 0.5% (if Specific Business Tax is not payable);
• Withholding income tax: 1% for companies, progressive rates for individuals.

The parties determine by contract who pays what.

What to Check and What to Watch Out For

• Title type: insist on a Chanote or at least a Nor Sor 3 Gor; obtain a fresh extract from the Land Department.
• Encumbrances: mortgages, servitudes, usufructs, leases - all of these appear on the reverse of the title document.
• The 49% quota in a condominium: request written confirmation from the building's juristic person that foreign ownership capacity is available.
• FET form / Tor.Tor.3: plan the fund transfer in advance, for the full purchase amount in foreign currency.
• Leasehold: verify the term (30 years or less), confirm that it is registered, and assess the real enforceability of any 'renewal' clauses.
• Building and land: be clear about exactly what right you are acquiring - a unit, a house, or a land lease.
• No nominees: arrangements to hold land through nominees or a 'dormant' company are unlawful (Section 96 of the Land Code).
• Marriage: property acquired during marriage is presumed under CCC Section 1474 to be jointly owned (sin somros) - this affects both ownership structuring and divorce proceedings.