Becoming a homeowner in Thailand
29 March 2013
Who has never dreamt about sun, palm trees and a nice view on the beach? Getting a house in Thailand can represent a will for many foreigners either aiming to make investment or just to enjoy holidays. But regarding the “Act Promulgating the Land Code, B.E. 2497(1954)”, the “farangs” (foreigners in Thai) are not allowed to own any land. How can this dream become true then?
Despite the law, the purchase of one special kind of accommodation is possible. A condominium is an apartment where you share the use and access to the common facilities with the other owners. The purchase of such apartments represents the only exception for the foreigners. Therefore, the “Section 19 bis of the Condominium Act” states that the total area of a condominium owned by aliens should not exceed 49% of its total area. This option represents an easy way for the farangs to obtain property with few limitations. Though it may not fulfil the dream of having a house; two other options remain.
Using a limited company is one of them. A foreigner can create a company or join one as long as his shares do not exceed 49%. Indeed, for protection reasons, a Thai company cannot be fully owned by foreigners. Once the farang is part of a local company, they can buy a land and build their house. This will still be the company’s property and in that way, it represents a danger, as the foreigner cannot have real control on it.
In the previous years, many aliens created Thai companies for this only purpose, benefiting from the loopholes in the law. The government aware of this practice decided to pay attention to every suspicious company and took actions against the simulated ones as shutting them down. Thus, creating a company should only be for the purpose of running a business and not a way to acquire property.
Finally, a last solution remains by renting land. A foreigner is able to get long-term lease agreements with Thai landlords. Those contracts can last a maximum of 30 years but are renewable twice. Thus, the foreigner may only rent the land but fully owns its property and in this way seems an acceptable option.
If you are looking to build your own house in Thailand, The Broadgate Financial Group can assist via our construction subsidiary Broadgate Construction. It offers a full range of houses that can be adapted regarding your needs.
The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official position of The Broadgate Financial Group.