Frequently Asked Questions: Angthong Hills - Koh Samui - Thailand - Hillside Villas, Apartments, Houses for Sale

Frequently Asked Questions

Although foreigners are legally prohibited from owning land in Thailand, there are proven and effective ways in which you are able to purchase land and own it while complying with Thai laws.

One form of land purchase that is popular with foreign investors is through a Limited Liability Company. Thai law stipulates that foreign interest in the company may not exceed 49% but in practice, any company with more than 40% foreign ownership that purchases land will be investigated by the Central Land Office to ensure that the company has not been set-up for the purpose of getting around the law against ownership of land by foreigners. Therefore, the maximum ownership is limited to 39%, but the company can be organized in a way that the foreigner can be the only director of the company who can commit or bind the company in any contractual dealings. This effectively allows the minority shareholder to have control over the company.

Another form of land purchase by foreigners is through a Leasehold Agreement. These are generally written up as 30 year leases with two additional prepaid 30 year renewals for a total of 90 years. The lease will include clauses that automatically allow freehold ownership if Thai law ever changes to allow foreign ownership, and the right to sell, sublease, or transfer the property. This makes a leasehold purchase effectively ownership.

Land is measured in Rai, Ngan and Wah.
1 Rai = 4 Ngan (1600 m2)
1 Ngan = 100 Wah2 (400 m2)
1 Wah2 = 4m2
1 Acre = 2.5 Rai (approx)
1 Hectare = 6.25 Rai (approx)

There are several factors to consider when looking for a prospective property. Infrastructure and certain considerations in addition to your basic requirements should be taken into account:

Location - Proximity to business, shops, hospitals, conveniences, etc.
Access - public utility and road access, concrete roads.
Water - Mains water, well water, and supplementary storage facilities.
Electricity - Mains connection, and backup generators.
Telephones - Access to direct lines.
Security - 24 hour security guard service, security panel systems.
TV connection - cable or satellite.
Hot water facilities - nearly all in Thailand are instant and not storage.
Air Conditioning - a necessity in Thailand.
Furniture and Appliances - provision of basic furnishings and white goods.

The simple answer is no. The Land Tax levied on residential properties is such a small amount that in practice the body charged to collect it, rarely bothers to do so, and if they do, they usually wait many years until the amount accumulates.

On all purchase/sale of property in Thailand there is a stamp Duty of 0.5%, a transfer fee of 0.01%, a business tax of 0.11% levied against an owner who has been in registered possession of the property less than 5 years, and Income Tax. There is no Capital Gains Tax in Thailand, unlike many countries, and Income Tax (usually between 1.0 - 3.0%) on property is the comparable replacement. There are no set rules on who pays the income tax, and it is just another part of the bargaining process, as with all the other costs of the transfer of ownership.

Prior to 1998, any Thai woman who married a foreigner would lose her right to purchase land in Thailand. She could, however, still retain land that she owned prior to marrying the foreigner.

However, the recent (1999) Ministerial regulation now allows Thai national's married to foreigners the right to purchase land, but the Thai spouse must prove that the money used in the purchase of freehold land is legally solely theirs with no foreign claim to it. This is usually achieved by the foreign spouse signing a declaration stating that the funds used for the purchase of property belonged to the Thai spouse prior to the marriage and are beyond his claim.

A freehold title gives the owner absolute proprietorship over the land in perpetuity.

Leasehold property is held on a government lease for a period of 30 years. At the end of this period, the landowner applies for an extension of the lease, which is usually granted. The lease can be extended for a period of up to 90 years at which time the lease must be renewed.

Although a freehold title would be of distinct advantage, a leasehold title bears no specific disadvantage to the purchaser. Both forms of purchase are safe and effective means of property ownership by foreigners in Thailand.