What are the risks of buying property in Thailand?

Authored by the expert who managed and guided the team behind the Thailand Property Pack

Everything you need to know before buying real estate is included in our Thailand Property Pack

Who is the author of this content?

BAMBOOROUTES

A team specialized in real estate investing in APAC countries (Japan, Thailand, Indonesia, Australia, etc.).

We are a team of financial experts, legal professionals, developers, and local real estate specialists dedicated to helping people like you avoid mistakes when investing in real estate in a foreign place, particularly in Thailand. If you'd like to learn more about us, you can check our presentation page.

How this content was created 🔎📝

At BambooRoutes, we explore the Thai real estate market every day. Our team doesn't just analyze data from a distance—we're actively engaging with local realtors, investors, and property managers in cities like Bangkok, Chiang Mai, and Phuket. This hands-on approach allows us to gain a deep understanding of the market from the inside out.

These observations are originally based on what we've learned through these conversations and our observations. But it was not enough. To back them up, we also needed to rely on trusted resources

We prioritize accuracy and authority. Trends lacking solid data or expert validation were excluded.

Trustworthiness is central to our work. Every source and citation is clearly listed, ensuring transparency. A writing AI-powered tool was used solely to refine readability and engagement.

To make the information accessible, our team designed custom infographics that clarify key points. We hope you will like them! All illustrations and media were created in-house and added manually.

Fact-checked and reviewed by our local expert

✓✓✓

Attaya Suriyawonghae 🇹🇭

Real Estate Broker, Zest Real Estate

As a Thai Real Estate Broker based in Phuket, Attaya possesses deep knowledge of the Thai market. Her insider perspective and local connections provide invaluable insights for property investors who want to make their dream come true in the Land of Smiles. Speaking with her allowed us to go back to the blog post, improve a few elements, and include her personal insights for a richer experience.

What are the most common risks foreigners face when buying property in Thailand?

Foreigners buying property in Thailand face five major risks that can result in complete financial loss.

Land ownership restrictions represent the biggest risk, as foreigners cannot legally own land outright in Thailand. This forces buyers into complex arrangements like long-term leases, usufruct agreements, or purchasing through a Thai spouse, each carrying significant legal vulnerabilities.

Fraudulent sellers and counterfeit documents create another major threat. Scammers frequently sell land they don't own or properties with hidden liabilities, targeting foreign buyers who lack local market knowledge. These schemes can result in total investment loss with no legal recourse.

Unreliable developers pose substantial risks, particularly for off-plan purchases. Cases of construction delays, substandard quality, project abandonment, or developer bankruptcy regularly surface in the Thai market. Without proper escrow protections, buyers often lose their deposits when developers fail to complete projects.

Legal and regulatory confusion frequently trips up foreign buyers unfamiliar with Thai property law. This leads to unenforceable contracts, improper documentation, or failure to complete required registration procedures that invalidate ownership claims.

It's something we develop in our Thailand property pack.

Why do these risks happen in the first place?

These risks exist because Thailand's property market operates under restrictive laws and fragmented regulations that create numerous gaps for exploitation.

The fundamental issue stems from Thailand's strict Foreign Business Act, which prohibits foreign land ownership to protect national sovereignty. This forces foreigners into legally ambiguous workarounds that often lack proper enforcement mechanisms or clear legal precedents.

Thailand's property market remains less regulated compared to Western standards, especially for new developments and off-plan sales. The absence of mandatory escrow accounts, standardized developer insurance, or comprehensive buyer protection laws creates an environment where unscrupulous operators can exploit foreign investors.

Inconsistent law enforcement compounds these problems. While regulations exist on paper, their practical application varies significantly between provinces and local authorities. This creates confusion and opportunities for fraudulent activity to go unpunished.

The lack of standardized due diligence tools and insufficient technical expertise among some legal advisors means many foreign buyers don't receive adequate protection during transactions. Language barriers and cultural differences further complicate proper risk assessment.

Which risks are widely known versus less obvious but equally important?

Most foreign buyers understand the widely publicized risks but often miss critical hidden dangers that can be equally devastating.

Widely known risks include land ownership restrictions, leasehold limitations for foreigners, legal requirements for condominium purchases (49% foreign ownership rule), and the general necessity of conducting due diligence. These topics are frequently discussed in expat communities and property forums.

However, several less obvious risks carry equal weight. Developer bankruptcy represents a major hidden threat - even established developers can suddenly fail, leaving buyers with incomplete projects and no recourse. The absence of escrow accounts means deposits paid to developers often disappear entirely when projects collapse.

Hidden liens and encumbrances on properties frequently surface after purchase, particularly when buying from private sellers. These can include unpaid taxes, utility bills, or loans secured against the property that become the new owner's responsibility.

Emotional and financial vulnerabilities when purchasing through a Thai spouse create long-term risks many foreigners don't consider. Divorce, death, or relationship breakdown can result in complete loss of property rights, as the foreign spouse has no legal claim to land ownership.

Local opposition to new developments can kill projects after launch, leaving foreign buyers with worthless investments in stalled or cancelled developments.

What are the typical consequences when these problems occur?

Risk Type	Typical Financial Loss	Legal Consequences
Fraudulent Land Sales	100% of investment	No legal recourse, criminal charges rare
Developer Bankruptcy	50-100% of deposits paid	Lengthy legal proceedings, minimal recovery
Improper Documentation	Property becomes unsaleable	Ownership disputes, title complications
Spouse-Related Issues	100% of property value	No ownership rights, forced sale
Hidden Liens	Outstanding debt amounts	Forced property sale to cover debts
Currency Fluctuation	20-30% value reduction	Market timing losses
Market Volatility	10-40% depreciation	Inability to exit investment

How does buying property in Thailand compare risk-wise to similar countries?

Thailand presents significantly higher risks compared to most other Southeast Asian countries popular with foreign property investors.

Malaysia offers much clearer foreign ownership laws through its MM2H program, allowing foreigners to purchase property above certain price thresholds with straightforward legal processes. Singapore provides exceptional buyer protections with mandatory escrow accounts, comprehensive developer insurance, and strict regulatory oversight.

Even Vietnam, despite being a communist country, offers more transparent property investment mechanisms for foreigners through its apartment ownership laws and clearer legal frameworks.

Thailand's regulatory gaps, opaque transaction processes, and heavy reliance on developer reputation rather than systematic protections make it substantially more risky. The absence of standardized escrow systems, weak enforcement of developer obligations, and convoluted title transfer procedures create vulnerability levels uncommon in developed property markets.

Countries like Australia, New Zealand, and Canada - while having foreign buyer restrictions - maintain robust legal frameworks that protect all buyers equally once transactions are permitted. Thailand's system inherently disadvantages foreign buyers through structural legal limitations.

Does Thailand's legal system protect foreign buyers adequately?

Thailand's legal system provides inadequate protection for foreign property buyers, with major gaps that leave investors vulnerable to significant losses.

While frameworks exist for condominium ownership and leasehold arrangements, enforcement mechanisms remain weak and inconsistent. The Thai legal system prioritizes protecting Thai nationals' interests over foreign investors, creating an inherently unbalanced playing field.

Critical protections missing from Thailand's system include mandatory escrow accounts for property purchases, comprehensive developer insurance requirements, and standardized disclosure obligations for sellers. These gaps mean foreign buyers operate without basic safeguards considered standard in most developed markets.

The complexity of title transfer procedures, combined with language barriers and varying local interpretations of national laws, creates numerous opportunities for legal complications to arise. Foreign buyers often discover their contracts are unenforceable or their ownership claims invalid only after problems occur.

Court proceedings favor Thai language and local legal customs that foreign buyers struggle to navigate effectively. Recovery of investments lost through fraud or developer failure typically proves extremely difficult and expensive through Thailand's legal system.

It's something we develop in our Thailand property pack.

Is the situation for foreign buyers improving or deteriorating?

As of September 2025, the situation for foreign property buyers in Thailand shows mixed signals with marginal improvements in some areas but persistent fundamental risks.

Government awareness of property market issues has increased, leading to some regulatory reforms including enhanced disclosure requirements for developers and improved title verification procedures. The establishment of more professional due diligence services has made proper property research more accessible to foreign buyers.

However, fundamental structural problems remain unchanged. Land ownership restrictions for foreigners haven't been relaxed, and the Thai government shows no indication of modifying these policies. Scams targeting foreign buyers continue to evolve and proliferate, particularly in tourist-heavy areas like Phuket, Pattaya, and Koh Samui.

The rise of social media and online property platforms has actually increased exposure to fraudulent listings and unverified sellers. Many new property websites lack proper verification systems, making it easier for scammers to reach foreign targets.

Developer reliability has improved slightly in major markets like Bangkok, but smaller regional developers continue to operate with minimal oversight. Project abandonment rates remain high for off-plan purchases outside of established urban centers.

What steps can buyers take to prevent or reduce these risks?

Foreign buyers can significantly reduce property investment risks through comprehensive due diligence and professional verification processes.

Conduct thorough title searches through official government channels, not just developer-provided documents. Verify the seller's legal ownership through the Land Department and check for any existing liens, mortgages, or legal disputes affecting the property.

Investigate developer reputation extensively by researching their previous projects, completion rates, and any outstanding legal issues. Visit completed developments to assess build quality and speak with existing foreign owners about their experiences.

Secure independent translations of all contracts and legal documents, then have them reviewed by qualified Thai property lawyers before signing anything. Never rely on developer-provided legal advice or translations.

Monitor currency exchange rates and structure payment schedules to minimize foreign exchange exposure. Consider using forward contracts or currency hedging if making large payments over extended periods.

Avoid deals that seem unusually attractive compared to market rates - they often indicate fraud or hidden problems. Always conduct site visits and neighborhood assessments before committing to purchases.

1. Title verification through Land Department records2. Developer background checks and project history review 3. Independent legal document translation and review4. Professional property inspections and site visits5. Currency risk management through payment timing6. Market rate verification to identify potential scams7. Insurance coverage for construction and legal risks

Who are the essential professionals to hire for safe property purchases?

Successful Thai property purchases require assembling a qualified professional team with specific expertise in foreign buyer transactions.

An independent property lawyer specializing in Thai real estate law represents the most critical hire. They must have extensive experience with foreign buyer transactions, not just general Thai legal practice. Verify their credentials through the Thai Bar Association and check references from other foreign clients.

A qualified surveyor or property inspector should conduct thorough technical assessments of any property before purchase. They can identify structural problems, building code violations, or incomplete construction that could affect property value or safety.

A reputable local real estate agent with verifiable credentials and established track records can provide market insights and help navigate local transaction customs. Ensure they're licensed and check their standing with professional associations.

Consider hiring a specialized due diligence firm for complex or high-value transactions. These companies can conduct comprehensive background checks on developers, verify all legal documentation, and identify potential red flags that individual professionals might miss.

For significant investments, engage a local accountant familiar with foreign property ownership tax implications to structure purchases optimally and ensure compliance with both Thai and your home country tax obligations.

Are there risks that cannot be prevented regardless of precautions?

Even the most careful foreign buyers face certain unavoidable risks inherent to Thailand's property market structure and political system.

Government policy changes represent the largest uncontrollable risk. Thailand could modify foreign ownership laws, impose additional taxes on foreign property owners, or change visa regulations affecting long-term residence rights. These changes can immediately impact property values and ownership viability.

Natural disasters including floods, earthquakes, and tropical storms can damage properties regardless of construction quality or insurance coverage. Thailand's tropical climate and geographic location make these risks unavoidable for all property owners.

Market crashes driven by broader economic factors - tourism downturns, currency crises, or global recession - can affect property values regardless of individual property quality or location. The Thai property market's dependence on foreign buyers makes it particularly vulnerable to international economic shifts.

Local community opposition to foreign-owned properties can create long-term problems even for legally compliant purchases. Social tensions or political changes could lead to increased scrutiny or hostile treatment of foreign property owners.

Infrastructure deterioration or changes in local development plans can negatively impact property values over time, particularly in rapidly developing areas where initial infrastructure may prove inadequate for growth.

What red flags should foreigners watch for during purchases?

1. **Documentation Issues** - Missing or incomplete title deeds - Refusal to provide official building permits - Vague ownership transfer procedures - Contracts only available in Thai language - Lack of proper legal registration documents2. **Developer Warning Signs** - No verifiable track record of completed projects - Unrealistic completion timelines - Refusal to allow site visits to previous developments - High-pressure sales tactics with limited-time offers - Absence of proper project registration with authorities3. **Financial Red Flags** - Requests for cash payments or unusual payment methods - No escrow account arrangements - Prices significantly below market rates - Payment demands before legal documentation completion - Unclear or changing cost structures4. **Legal Warning Signs** - Sellers unwilling to provide clear title verification - Complex ownership structures involving multiple Thai nationals - Pressure to sign agreements without legal review - Promises of land ownership that circumvent Thai law - Lack of proper dispute resolution mechanisms

It's something we develop in our Thailand property pack.

We did some research and made this infographic to help you quickly compare rental yields of the major cities in Thailand versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.

What long-term risks emerge years after purchasing?

Long-term property ownership in Thailand creates unique risks that may not manifest until years or decades after purchase.

Leasehold renewal complications represent a major long-term threat for foreign buyers. While initial lease agreements may promise renewal rights, these guarantees often prove unenforceable when renewal time arrives. Property owners may face significant rent increases, changed terms, or outright refusal to renew by Thai landowners.

Personal circumstances changes can trigger catastrophic property loss for foreigners using Thai spouse ownership structures. Divorce, death, or relationship breakdown can result in complete forfeiture of property rights, as foreign spouses have no legal claim to land ownership under Thai law.

Infrastructure deterioration around older properties can significantly impact values and livability. Roads, utilities, and public services may degrade over time without adequate government maintenance, particularly in rapidly developed tourist areas where initial infrastructure wasn't designed for long-term heavy use.

Developer bankruptcy or mismanagement years after project completion can affect common area maintenance, facility operations, and overall property management in condominium developments. Foreign owners may face special assessments or deteriorating building conditions they cannot control.

Sudden shifts in local property laws or enforcement priorities can retroactively affect existing foreign-owned properties. Changes in interpretation of foreign ownership rules could potentially invalidate previously legal ownership structures.

Conclusion

This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.

Sources

1. BE Laws - Buying Property in Thailand
2. LinkedIn - Property Investment Risks in Thailand
3. Neginski - Top 10 Property Investment Risks in Thailand
4. Thailand Law Online - Real Estate Ownership Laws
5. Isaan Lawyers - Risks of Property Ownership in Thailand
6. FUJI C21 - Real Estate Investment Failures in Thailand
7. Thai Embassy - Purchasing Condominium in Thailand
8. Siam Legal - Thailand Property Pitfalls