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The full buying process for foreigners in Thailand is detailed in our Thailand Property Pack.
Thailand is a popular destination for foreigners who want to invest in real estate.
It has beautiful landscapes, a rich cultural heritage, and friendly people. But buying property in a foreign country can be complicated, especially when it comes to the laws and regulations.
This guide is here to help foreign buyers understand how the property market works in Thailand. It covers everything you need to know in a simple and easy-to-understand way.
Can you buy a property in Thailand as a foreigner?
If you are American, we have a dedicated blog post regarding the property buying and owning process in Thailand for US citizens.
Yes, it is possible for foreigners to buy property in Thailand, but there are certain restrictions and regulations that need to be considered.
Condominiums
Foreigners can buy and own condominium units completely, but there is a limit on how many units can be owned by foreigners in a building. The total floor area of the units owned by foreigners cannot exceed 49% of the entire building, as mentioned in the Foreign Business Act of 1999.
So, if a building has already reached the maximum limit of 49% foreign ownership, it's a no.
Other properties
In Thailand, foreigners cannot own land.
Hence, for landed properties such as houses or villas, Thai law prohibits foreign ownership. However, there are some alternative structures that allow foreigners to have legal control over the property.
One common method is setting up a Thai company, with the majority of shares (more than 51%) held by Thai individuals or entities. The company can then purchase the property, and the foreigner can control the property through their shareholding in the company.
Another method is buying the area “for a period of time” through a leasehold. A leasehold is, therefore, an arrangement that guarantees long-term ownership. If you are a foreigner hoping to buy a villa or house on the land property, you are restricted to a lease for about 30 years.
With this lease in hand, the foreigner receives “exclusive possession” of the rental property.
Owning land
Until recently, foreigners in Thailand were not allowed to personally own land, as mentioned earlier.
However, by the end of 2022, the weekly cabinet meeting tentatively approved a proposed regulation by the Interior Ministry concerning land ownership by foreigners. The proposal suggests that foreigners should be allowed to own land for residential purposes, with a maximum limit of one rai (which is approximately 0.16 hectares). However, the proposal faced strong criticism from its opponents.
For the moment, there are two common options for foreigners who want to own land:
- Foreigners can set up a Thai Limited Company and have the company own the land on their behalf. This allows them to indirectly own the land through the company.
- Foreigners can also enter into a leasehold agreement with the landowner, which gives them the right to use the land for a specific period of time.
Even if a foreigner is married to a Thai citizen, they still cannot co-own land personally. They would need to consider the options mentioned above to have legal ownership or control over land in Thailand.
Here is a summary:
| Property | Ownership | Alternatives |
|---|---|---|
| Condominium | Allowed | Foreigners can directly own a condominium unit (but the whole building must have at least 51% Thai ownership) |
| Building | Partial Ownership | Buying part of a building (less than 49%) but not the land it is built on |
| Land | Prohibited | Establishing a Thai Limited Company to own the land or entering into a leasehold agreement |
| House | Prohibited | Creating a Thai Limited Company or a leasehold agreement |
| Villa | Prohibited | Creating a Thai Limited Company or a leasehold agreement |
| Joint-Ownership Property | Not allowed | Foreigners cannot co-own land, even if married to a Thai citizen |
Can you become a resident in Thailand by owning a property?
If you buy a property in Thailand, it's possible for you to become a resident of the country.
Long-Term Resident Visa
Since 2022, it has become possible to become a resident of Thailand by buying a property. The Thai government has introduced a new visa called the Long-Term Resident (LTR) Visa to facilitate this.
The LTR Visa has different categories, and one of them is called "Wealthy Global Citizens." To be eligible for this category, one of the requirements is to make an investment of at least $ 500,000 in Thai government bonds, foreign direct investment ... or Thai property.
Nevertheless, meeting the basic property ownership requirement is not sufficient to guarantee qualification for the LTR Visa. Therefore, it is important to note that additional criteria (such as owning a significant amount of assets) must be fulfilled in order to obtain residency under this scheme.
Thailand Elite Visa
If you want to reside in Thailand, we have to mention the Thailand Elite Visa, which is a long-term visa program that allows individuals to stay in the country for a period of 5, 10, or 20 years, depending on the chosen package.
Important: this visa program is separate from property purchase, meaning that there is no requirement to buy property in order to obtain the Elite Visa.
Although the Elite Visa is technically categorized under the Privilege Entry Visa (PE), which is a type of tourist visa, it offers many benefits that are typically associated with residency packages. These benefits can include visa validity, multiple-entry privileges, airport services, government concierge services, and various other perks.
So, while it is technically a tourist visa, it provides similar advantages to a residency package.
Buying a property in Thailand can be risky
An increasing number of foreign investors are showing interest in Thailand. However, 90% of them will make mistakes. Avoid the pitfalls with our comprehensive guide.
Is it better to buy or rent a property in Thailand?
It's better to rent a property in Thailand if:
- you plan to stay in Thailand for a short duration or are uncertain about your long-term plans in the country
- you prefer convenience (renting often comes fully furnished, making it easier for expatriates or individuals not wanting to invest in furniture and appliances for a temporary stay)
And it's better to buy real estate in Thailand if:
- you're interested in urban living (then, owning a condo could be a viable and attractive option)
- you're considering long-term investment (Thailand's real estate market has historically shown growth and potential for investment opportunities)
- you desire the freedom to customize and renovate your living space according to your preferences
If you're uncertain whether to buy or rent a property in Thailand, understanding rental yields can be beneficial.
Rental yield is the percentage of income you can expect to earn from renting out a property compared to its total cost.
In Thailand, rental yields typically range from 1.5% to 5%.
Now, the decision depends on your individual circumstances and financial goals.
If you can find a way to generate a return on your capital that exceeds 5%, such as investing in the stock market or buying government bonds, it might be more advantageous to pay rent and utilize your capital for these purposes.
However, if achieving such returns seems challenging, it would be wiser to use your capital to purchase a property in Thailand and eliminate the need for paying rent.
Owning a property can also provide potential long-term appreciation in value and offer stability in terms of housing costs.
What is the buying process in Thailand for real estate?
Buying real estate in Thailand as a foreigner can be challenging due to restrictions and regulations.
The most difficult steps typically involve navigating the legal framework, obtaining the necessary permits, and ensuring compliance with ownership restrictions and financial requirements imposed on non-Thai nationals.
1. Research and property selection
Begin by researching the real estate market in Thailand, including the different regions, property types, and prices.
Identify your preferences and requirements, such as location, property size, amenities, and budget.
Then, engage with local real estate agents or browse through online property portals to explore available options.
2. Engage a lawyer
It is highly recommended to hire a qualified Thai lawyer who specializes in real estate transactions.
They will help navigate the legal complexities and protect your interests throughout the process.
We give more details below in the article.
3. Due Diligence
Perform thorough due diligence on the property you wish to purchase.
Here is a quick checklist for a solid due diligence when buying property in Thailand:
- Verify the authenticity of the land title deed (Chanote) and check for any encumbrances or legal disputes.
- Review leasehold agreements, including terms, conditions, and remaining lease period.
- Understand foreign ownership restrictions and explore suitable ownership structures.
- Ensure compliance with zoning laws, building regulations, and permits.
- Assess potential environmental impact and the need for environmental assessments or permits.
- Evaluate the availability and adequacy of utilities and infrastructure.
- Familiarize yourself with community regulations, such as homeowner associations.
- Understand the tax implications and verify the property's financial status.
- Consider the proximity to cultural or heritage sites and associated regulations.
- Verify the validity and restrictions of Nor Sor 3 Gor land titles, if applicable.
- Take into account usufruct and superficies rights, if relevant to the property.
- Investigate any history of land encroachments, squatter issues, or coastal erosion/flooding risks.
4. Offer and negotiation
Once you've found a property, make an offer to the seller either directly or through your real estate agent.
Negotiate the purchase price and terms, including any conditions or contingencies, such as repairs or specific contractual obligations.
5. Reservation Agreement and Deposit
Once you've found a property, make an offer to the seller either directly or through your real estate agent.
Negotiate the purchase price and terms, including any conditions or contingencies, such as repairs or specific contractual obligations.
6. Escrow account
In Thailand, it is common practice to use an escrow account (a neutral third party to hold funds until all transaction conditions are met) to hold the deposit and subsequent payments during the transaction.
The escrow account ensures that the funds are protected until the transfer of ownership is completed.
Please note that in Thailand, escrow services are considered illegal unless they have been granted official permission from the Fiscal Policy Office of the Thailand Ministry of Finance.
This permission is only given to "financial institutions" such as banks and finance corporations that meet specific criteria, unlike other countries where real estate agencies or law firms can also be authorized.
Here are some authorized banks for escrow accounts:
- ABN Amro N.V Bangkok Branch
- Bangkok Bank
- Citibank Bangkok Branch
- Standard Chartered (Thailand) Bank
- Sumitomo Mitsui Banking Corp
- HSBC Bank
- Kasikorn Thai Bank
- Krung Sri Ayuthaya Bank
- Siam Commercial Bank
7. Full payment and transfer
The remaining balance of the purchase price is typically paid within a specified timeframe, usually 30-90 days after signing the reservation agreement.
Upon full payment, both parties (buyer and seller) arrange a date for the transfer of ownership at the Land Department.
8. Land Department Registration
The buyer, seller, and their respective lawyers or authorized representatives meet at the Land Department to complete the property transfer.
The buyer must bring the full payment, while the seller provides the necessary documents, including the title deed and a signed transfer deed.
The Land Department conducts a title search and transfers the property's ownership to the buyer by updating the official records.
9. Taxes and Fees
Foreigners are subject to the same taxes and fees as Thai nationals when purchasing property in Thailand.
The buyer is responsible for paying various taxes and fees, which include transfer fees, specific business tax (if applicable), stamp duty, and withholding tax.
These costs are calculated based on the property's appraised value or the actual purchase price, whichever is higher.
Further information regarding these taxes and fees will be provided in the subsequent sections of the article.
10. Completion and Possession
Once the property transfer is completed, the buyer takes possession of the property.
It is advisable to conduct a final inspection to ensure that the property is in the agreed condition and address any outstanding issues with the seller.
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How is the real estate market in Thailand?
Many people who have visited Thailand have considered buying a property there. But is it a smart decision?
Market indicators
The real estate market in Thailand is currently favorable for potential investors.
Thailand is considered a relatively stable country with a projected economic growth rate of 15% over the next five years, resulting in an average GDP growth rate of 3% (IMF estimations).
This sustained growth is a positive indicator for real estate investment as it suggests the country's economy is likely to remain stable and the value of real estate investments is expected to increase over time.
Also, according to the Bank of Thailand, the housing prices have raised by 17% in 5 years. Every month, the Thai properties prices have been increased, without almost no interruption.
Another encouraging factor is the significant increase in Thailand's population's wealth. If we look at the GDP per capita indicator, it seems that Thai people have become 30% richer over the course of last 5 years, which is quite impressive. This rise in wealth can potentially drive demand for various types of real estate, including residential, commercial, and rental properties.
According to Numbeo, rental properties in Thailand offer gross rental yields ranging from 1.5% to 4.2%, indicating potential returns on investment for rental properties.Additionally, the projection for moderate inflation in Thailand is beneficial for the real estate market. Moderate inflation helps maintain the purchasing power of individuals and ensures a stable pricing environment for real estate assets.Considering these factors, investing in the real estate market in Thailand can be a promising opportunity for investors, given the country's stable economy, projected growth, increasing population wealth, and favorable rental yields.
To know more, please check our full pack to make real estate investments in Thailand.
Living in Thailand as an expat
Living in Thailand as an expat offers excellent healthcare, efficient transportation, unique cultural experiences, and stunning landscapes.
Modern hospitals like Medpark or Samitivej in Bangkok provide world-class medical care. The transportation system includes taxis, BTS Skytrain, and MRT subway for easy city travel, and trains or buses for exploring exotic destinations like Ayutthaya, Chiang Mai, Mae Hong Son and Krabi.
You may also immerse yourself in Thai culture by visiting temples, joining festivals like Songkran, and enjoying local cuisine (padkrapao, somtum, etc.). Respect for customs and learning basic Thai phrases enhance connections.
Also, the cost of living in Thailand is quite cheap, here are some examples:
- Rent for a cozy one-bedroom apartment in Bangkok's Sukhumvit area: $500-$800 per month.
- Daily commuting expenses using the Skytrain or MRT: $1.50-$2.50 each way.
- A delicious Pad Thai from a local street vendor: $2-$3, while a nice seafood dinner at a restaurant: $15-$25.
- Monthly groceries for a couple: $150-$250, including fresh produce and local staples.
- Average monthly electricity bill for a 2-bedroom apartment: $40-$60.
- High-speed internet plan (100 Mbps): $20-$30 per month.
- Comprehensive health insurance for a family of four: $150-$300 monthly.
- Monthly gym membership at a modern fitness center: $30-$50.
Overall, Thailand provides a remarkable expat experience.
Best places to buy a property in Thailand
It really depends on you!
If you're looking for a vibrant urban lifestyle and thriving real estate market, Bangkok, Thailand's capital, offers diverse options for property investment.
If you're seeking a serene and picturesque coastal setting, places like Phuket and Koh Samui are popular choices for buying properties with stunning sea views.
If you desire a more laid-back and culturally rich experience, Chiang Mai, located in northern Thailand, offers an attractive mix of affordability and charm in its real estate offerings.
If you're a retiree looking for a peaceful haven, Hua Hin, known for its relaxed atmosphere and beautiful beaches, is a favorable destination for property purchases.
If you're interested in emerging markets, cities like Pattaya and Hua Hin present promising investment opportunities and a growing expatriate community.
This table summarizes some of the best places to buy a property in Thailand.
| City / Region | Population | Average Price per sqm ($) | Strengths |
|---|---|---|---|
| Bangkok | ≈ 10 million | 9,000 - 20,000 | Economic hub, diverse property options, modern amenities, vibrant nightlife |
| Chiang Mai | ≈ 200,000 | 2,000 - 4,500 | Cultural capital, lower cost of living, natural beauty, popular among expats |
| Phuket | ≈ 420,000 | 5,000 - 12,000 | Tropical paradise, international airport, tourist hotspot, luxury resorts |
| Pattaya | ≈ 120,000 | 2,000 - 5,000 | Beach destination, vibrant expat community, entertainment options |
| Hua Hin | ≈ 90,000 | 2,000 - 4,000 | Tranquil coastal town, retiree-friendly, golf courses, quality healthcare |
| Samui | ≈ 65,000 | 3,500 - 7,000 | Idyllic island, pristine beaches, upscale resorts, water sports activities |
| Krabi | ≈ 65,000 | 2,300 - 4,000 | Stunning landscapes, popular for rock climbing, diving, and outdoor activities |
Is a Thai lawyer necessary when buying a property in Thailand?
While it's not a legal requirement, it is highly recommended to hire a Thai lawyer when buying property in Thailand.
Buying real estate in a foreign country can be complicated, and having a knowledgeable lawyer by your side is crucial. They can protect your interests and ensure a smooth transaction.
A Thai lawyer specializing in property law can assist you in several ways. They can review important legal documents such as the title deed (Chanote), contracts, and other agreements. They can also conduct due diligence to confirm the property's ownership and check for any existing claims or burdens.
Moreover, a Thai lawyer can guide you through the legal requirements and procedures involved in property transactions. This includes registering the sale with the Land Department and ensuring compliance with relevant laws and regulations.
They can offer advice on tax implications and help you understand your rights and obligations as a property owner in Thailand.
By hiring a lawyer, you gain peace of mind and minimize the risks associated with property purchases. They act as your advocate, negotiate on your behalf, and help resolve any potential disputes or issues that may arise during the buying process.
What are the risks to consider when buying a property in Thailand?
We've got an article dedicated to the risks associated with purchasing property in Thailand.
When buying property in Thailand, there are several risks to consider, such as:
- absence of ownership title
- language barrier
- political unrest
- foreign ownerships restrictions (seen above)
- deposit loss
Absence of ownership title
Before you put down a deposit or sign a reservation agreement, it's important to carefully check the official records of the Land Department regarding the property's ownership.
This is done to ensure that the seller has a clean and legal ownership of the land before you commit to any contractual agreements.
Language barrier
Communication in Thailand can be difficult for foreigners as still a good number Thais speak only Thai (especially true for older generations).
Political unrest
The country has experienced several instances of political unrest, including multiple coups and protests, indicating a history of instability.
Thailand consistently falls within the 80th to 85th range on the Fragile States Index, which assesses a country's vulnerability and stability by considering a range of indicators, including social, economic, and political factors.
Deposit loss
When you want to buy a property, you usually have to pay a reservation fee. In Thailand, this fee is typically 20-30% of the purchase price and shows your commitment.
If you decide not to proceed with the purchase, the Thai seller can keep the fee. To protect yourself, keep a receipt and have clear terms. Without specific conditions, the fee is non-refundable. These conditions, called "exit" clauses, can include factors like a clear title or contract terms.
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What are the legal documents required when you buy a property in Thailand?
When buying a property in Thailand, several legal documents are typically involved in the process:
- Title Deed (Chanote)
- Sales and Purchase Agreement (SPA)
- Foreign Exchange Transaction Form (FETF)
- Land Office Documents
- Tax Documents
- Power of Attorney (if applicable)
It is important to note that there is no legal requirement for documents to be notarized in Thailand. However, all copies of documents must be signed as being true copies of the original, and all parties listed on the deed must sign the purchase agreement.
A deposit is normally paid by the purchaser at this stage (from 20% to 30% of the property value in Bangkok, a bit more outside of Bangkok).
How to negotiate with a Thai person when buying a property?
Building a good relationship with the person at the other side of the table is crucial in Thai culture.
Begin by showing respect and courtesy towards them. Greet them with a "wai" gesture, which involves placing your palms together in a prayer-like gesture and slightly bowing your head (but don't exaggerate too much). Use polite and humble language throughout the negotiation process.
Maybe you already know that Thai people often prefer indirect communication styles, which means they may not directly express their thoughts or desires. Instead, they might use hints, silence, or non-verbal cues. When negotiating, be patient and attentive to these subtle signals. It's important to read between the lines and understand what the seller may be implying.
Finally, when dealing with someone from Thailand, avoid being too aggressive or confrontational, as it may damage the relationship and hinder progress.
Sources: REIC, Bangkok Post
Can you get a bank loan to buy a property in Thailand as a foreigner?
Yes, despite what many people think, foreigners can actually obtain property loans in Thailand.
However, it's not an easy task, and the options available are limited. Obviously, the conditions for foreign buyers are less favorable compared to local buyers.
If you're looking for a property loan in Thailand, it's worth considering contacting international banks such as Standard Chartered, United Overseas Bank (UOB), or Industrial and Commercial Bank of China (ICBC). Dealing with these banks may be easier compared to local banks like SCB or KBank. You can also consider reaching out to MBK Guarantee, a company specializing in condo loans, to inquire about your options.
To increase your chances of approval, you have to understand the application process and have the necessary documents that the banks require. Having a Thai spouse, living in Thailand for at least one year with employment, or being a permanent resident can make the process somewhat easier.
In Thailand, the applicant must be at least 20 years old, and the loan duration cannot surpass 30 years (although it can extend up to 35 years exclusively for permanent employees). When the applicant's age and the loan period are combined, the total cannot exceed 65 years.
Also, typically, the maximum loan amount provided will be up to 80% of the appraised value.
Lastly, it's worth noting that interest rates for mortgages in Thailand typically range from 6% to 8%, which is relatively high compared to some other countries.
What are the different taxes when buying a property in Thailand?
When purchasing a property in Thailand, the only tax that the buyer is required to pay is the Transfer Tax. This tax amounts to 2% of the registered value of the property.
It's important to note that there are additional taxes involved in property transactions, but these are typically the responsibility of the seller.
What are the other fees when buying a property in Thailand?
There are the legal fees, the brokerage fees and the property registration fees.
The buyer might consider engaging a lawyer to assist with the purchase process, as legal fees can vary depending on the transaction's complexity. Typically, these fees range between $ 300 and $ 900.
Also, the buyer may be required to pay a brokerage fee to the real estate agent who helped them find the property. Brokerage fees are typically around 2% of the purchase price.
Finally, the buyer will need to pay a fee to the Land Department to register the property in their name. This fee is usually around 1,000 baht ($ 30).
What is the official documentation regarding property ownership in Thailand?
Here are some official documents related to foreign ownership of property in Thailand:
- The Foreign Business Act of 1999 - a law that has limited foreign ownership of certain Thai industries
- The Land Code Act of 1954 - this is the main law governing land ownership in Thailand. It outlines the rules and regulations for land ownership by foreigners in Thailand.
- The Condominium Act of 2008 - this act outlines the rules and regulations for foreign ownership of condominiums in Thailand.
- The Investment Promotion Act of 1977 - this act outlines the rules and regulations for foreign investment in Thailand.
- The Civil and Commercial Code 2 - this code outlines the rules and regulations for property ownership in Thailand.
Buying real estate in Thailand can be risky
An increasing number of foreign investors are showing interest in Thailand. However, 90% of them will make mistakes. Avoid the pitfalls with our comprehensive guide.