How and Why to Buy Property in Thailand

With its white sandy beaches, exotic food, friendly people, busy nightlife and low cost of living, Thailand is a fast growing destination for expats buying property abroad.  But a purchase of a property in Thailand makes for a good business investment too!

People buying property in Thailand are seeing annual property appreciation of between 10-15%, and with a healthy rental market in tourist areas, rental yields of between 4-8% gross are possible.  However, buying property in Thailand isn’t without it’s anomalies of course - but it can be done!

In this article we examine how and why to buy property in Thailand and take you through the purchase process so that you know what to expect if you do decide to buy in an invest.

Foreigners can’t buy land in Thailand, they can only purchase condominiums and apartments - and even then they’re only allowed to own 40% of the units in an apartment building.  However, a foreigner can buy a whole building minus the land it’s built on! 

There are basically two ways of buying property in Thailand.  Foreigners can have a 30 year renewable lease on a property and register at the land office an option to renew the lease indefinitely.  There are however drawbacks with this method.  Lease renewals can’t be registered and are not effective against a purchaser of the property, also a lessee can’t sublet, sell or transfer their interest without the lessor’s consent.

The most popular method of buying property in Thailand therefore is to set up a Thai limited company with mixed Thai and foreign ownership, the foreigner owning 49% of the company.  Through this method it is possible to own land in Thailand.  The foreign owner can control the company with the use of a special power of attorney giving control to the foreign directors or increasing their voting rights. 

There are a number of different title deeds to be aware of when buying property in Thailand.  “Chanotti ti din” are accurately surveyed title deeds giving incontestable possession of the land.  You may find them in developed areas but they aren’t prevalent in the country.  Most title deeds are “nor sor sam” or “nor sor sam kor”, these are Thai property title deeds in as much as clear records of ownership exist.  Thai property with these deeds can be sold or leased, but the surveys may not be very accurate so care needs to be taken to define the property boundaries.

“Sor Bor Nung”, “Tor Bor Tor Hoc” and “Tor Bor Tor Ha” titles are effectively squatter’s rights and can’t legally be sold and “sor bor kor” deeds are true deeds accurately measured, but they can’t be leased, sold or transferred.  When considering buying property in Thailand a wide berth should be steered from these types of title deeds.

Always ensure you use a lawyer to carry out due diligence checks and have a building survey carried out before entering into any agreement to buy property.  You’ll need to pay a deposit, usually around 10% when signing the agreement to purchase, and you will forfeit this if you pull out of buying.  Closing on your Thai property takes between 30-60 days when contracts are exchanged and the balance of payment is made.

Many areas of the country make for attractive holiday hotspots, and if you’re buying purely for investment you need to look carefully at demand and supply of touristic accommodation.  It is possible to make handsome profits and gains from a well located property in Thailand that is within reach of good beaches and public amenities for example, but do tread carefully when looking at the viability of any property investment.