Property in Thailand is booming with as much as 40% of properties in some areas being snapped up by foreign nationals. Houses in Thailand can be bought from a few hundred thousand baht $20,000 (£10,000) right up to hundreds of millions of baht (millions of dollars or pounds) depending upon the area, the size of the house and the amount of land that comes with the property.
Buying an Existing House
In Thailand property is for sale in the same way that any country would sell land and houses. There are estate agents and lawyers that will facilitate the search for a property and make the final transaction. There are plenty of lawyers that are joint ventures between an ex-pat and a local Thai which means that the legalities can be explained to you in English and sometimes in German or Italian etc.
The most important element is having the land title deed placed in your name and this is done through the very efficient Government Land Registry offices that keep accurate records for each plot of land – the location, shape, area and who owns the deed. Once you have bought the land the previous owners simply sign their name and transfer the land into your name or company name. There is more on this subject under the Land Owning Laws in Thailand section and how to structure the ownership of the land to satisfy Government regulations.
Buying Off Plan
Buying off plan is a very popular method of buying and developing a house in Thailand and allows you to get involved with the design of a house from the offset. A property developer will usually design a village of between ten and one hundred new build houses that are mapped out into plots with a show-house for customers to visit and see the nature of the development. Once you have selected the property that you would like to purchase the property developer will agree a price for the basic cost of the house and the land. You will then have the option to modify the design making the property larger or smaller, perhaps with less internal walls etc and then choose the tiles, colours and the fixtures and fittings. All of this is done whilst keeping to the same intrinsic design so that your house blends in with others in the development area.
The price is then changed according to your modifications and a deposit is paid and then building commences. Usually there are staged payments which is different for each developer. For example you may pay a 10% deposit and then 30% when the roof is completed, 30% when the walls are completed and 30% when the house is completely finished.
Buying Land and Building
Many people will buy a large plot of land and then bring in their own architects and builders. If you are going to do this then there are several points to consider.
• License Is the land suitable for building upon? – You will need to check the land title to see if the land is licensed for farming only.
• Title Deed What kind of land deed is held. There are many different types of land title deed and only three that are recommended. Please see the Land Title Deeds section.
• Access If the land is located immediately next to a public road then there is no problem as you can easily get to your land without any hassle. If your land is just off the road then you must check to see who owns the access to your land. There is no point in building a house and then being held to ransom by the surrounding land owners who could charge a fortune just to allow access to the public road through their land. This has been known before and so beware.
• Utilities Make sure that power is available on the land or that electricity can be supplied by EGAT the Electricity Generating Board of Thailand. Getting power to your land can take quite a while if the land is in a remote area. Water is usually pumped up from a well and so check to see where the water will come from or if your neighbours will help out. For the sewage sometimes there will be a public system that you can feed into and sometimes there will have to be a plastic cess pit fitted that can be emptied every week or so by a contractor.
• Rain Check to see if during the rainy season the water runs off the land or forms channels that run off the mountain and through your land causing havoc. It is not much fun building a house on swampy land either.
• Builder When selecting a builder always visit some of the work that they have undertaken and get several references. Drip feed the builder payments and if possible pay for the materials directly. Do not give them large payments up-front for obvious reasons. There are many good builders in Thailand that will perform a fantastic job for you however always be careful.
Land Owning Laws in Thailand
Thai law stipulates that a foreigner may not own land in their name – they have the right of ownership of buildings only i.e. the actual house – bricks and contents etc but not the land upon which the house is built. If a foreigner wishes to purchase land to build a property they have two options:
The land is purchased on a thirty-year leasehold, with an option to extend the lease for further thirty-year periods. Possession of the land is assured by virtue of the fact that the property occupies the land. The leasor cannot seize the property upon expiration of the lease as the property is separate from the land.
Company Formation Option
If a foreigner is going to operate a business in Thailand then they may purchase the freehold of the land through their Limited Company. The land will be owned by the company, not the individual. The structuring of this company with the majority of the voting shares belonging to the foreigner enables controlling interest. This is the most popular form of land ownership for foreigners in Thailand. The company needs to register and pay tax – this can be arranged through a local accountant.
Land Title Deeds
There are two types of rights to private land. The first is the right of possession (possessory right) i.e. people who possess and use the benefit of land will have the right to possess such land under the civil and commercial code. The second is ownership by a person who has a title deed and documents concerning the land. A title deed is vital in purchasing land in Thailand to protect your investment and avoid land disputes.
There are many different types of land titles in Thailand, the majority of which do not allow for the legal right to build on that land. Only three land titles are recommended; Nor Sor 3, Nor Sor 3 Gor, and Chanote.
Is the lowest land title which allows for legally building a property and an instrument certifying the use of land issued by the government to the proprietor of land not a possessory title, i.e. it is confirmed by law that a person holding Nor. Sor 3 has the legal right to possess the land. This land title can be used as a legal document or to use the benefit of the land as an owner. Nor Sor 3 is a floating map with no parcel points. It is issued for a specific plot of land and is not connected to other land plots. This causes problems in verifying the land area. Any legal acts must be publicised for thirty days.
Is a legal land title with the same legal basis as Nor. Sor. 3. The difference being that Nor. Sor. 3 Gor has parcel points on the map, and is set by using an aerial survey to set the points and the land area. It is possible to verify a nearby land area. It always uses the same scale of 1:5000. There is no need to publicise any legal acts, and it is possible to partition (divide) the land into smaller plots.
A Chanote is a certificate for ownership of land. A person having their name shown on the deed has the legal right to the land, and can use it as evidence to confirm the right to government authorities. The title deed has been issued by using GPS to set the area and boundaries of the land, which is a very accurate method. Any legal acts may be done immediately, as per the right of ownership. Land partition of more than nine plots must be carried out according to the land allotment law, section 286. This is the most secure type of land title and is highly recommended.
Foreigners have the right to ownership of buildings only, where land is not included. Legal acts are unlimited. A suggestion for foreigners is to lease the land for thirty years with an option to an extension of the lease, and then purchase ownership of the house built on the land. Certainty of possession of land and house is assured, by being the owner of the house. The ownership of the land shall be leased out. If arranged as stated above, then the house will be separate from the land, and will not be a component part under the civil law. Ownership of buildings can be confirmed, and the leasor cannot seize the house upon expiration of the lease.
Useful Measurement Conversion Factors
The units of land measurement in Thailand are the Wah, Ngan, and Rai. Conversion factors between Thai measurements and metric measurements are:
1 Wah = 2 meters
1 square Wah = 4 square meters
100 square Wah = 400 square meters = 1 Ngan
4 Ngan = 1 Rai = 1,600 square meters
Conversion factors between Thai measurements, meters and acres are:
1 acre = 4840 square yards
1 acre = 4,046.8561 square meters
1 acre = 2.529285 Rai (approximately)
Hectare = 10,000 square meters = 2.471 acres = 6.25 Rai (approximately)