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FREQUENTLY ASKED QUESTIONS

Is it possible for me as a foreigner to own land in Thailand?

Although Thai law prohibits foreigners from owning land in Thailand, there are various ways in which you can structure your affairs so that you can own land, and still comply with existing Thai laws:
  1. Purchase the land through a Thai-registered limited company. This is the most popular choice among foreigners who wish to purchase land in Thailand. This involves the incorporation of a private limited company of which the foreigner holds 49% of the shares, the remaining 51% of the shares are held by nominee Thai Nationals. With the recommended changes to the Articles of Association, the foreigner can be the sole director of the company with executive powers - effectively giving the minority shareholder complete control over the company.
  2. Buying leasehold land. Foreigners are allowed to lease land in Thailand for a maximum period of 30 years with an option to renew for a further two periods of 30 years each. A lease registered with the Land Office remains in force throughout the term of the lease, regardless of whether the freehold owner sells or otherwise transfers the land. The drawbacks to a lease include the fact that the parties can contractually agree to renewals, but this right cannot be registered and is not effective against a purchaser of the property.
  3. Nominee with lease. You can use a Thai nominee to buy the land and then create a lease agreement between yourself and the nominee. The main advantage with using a nominee is that you can write your own clauses into the lease agreement with the nominee.
 
What are the different land titles in Thailand?

Chanote, Nor Sor Sam Gor & Nor Sor Sam are the only land titles where registered right of ownership or lease can exist, therefore any land titles lower than these are not recommended for foreigners.

  1. Chanote (Nor Sor 4 Jor) is the only document that can be described as a land title deed, because it alone confirms ownership of land. The land is accurately surveyed and plotted in relation to a national survey grid. Unique numbered marker posts set in the ground mark its boundaries. It is possible to partition (divide) the land into smaller plots.
  2. Nor Sor Sam Gor signifies the land occupier’s right to possess the land, but without conferring actual possession. The land is in general accurately surveyed and each plot is cross-referenced to a master survey of the area and a corresponding aerial photograph. Unique numbered marker posts set in the ground mark its boundaries. It is possible to partition (divide) the land into smaller plots.
  3. Nor Sor Sam has the same legal basis as Nor Sor Sam Gor. The boundaries are recorded in relation to the neighboring plots. There are no marker posts set in the ground to mark the boundaries of the land. This may cause problems in verifying the land area. A 30 days public notice is necessary before any change of status over the land can be registered.
  4. Sor Por Gor 4-01 is properly surveyed and registered, but the land cannot be bought or sold. It confers the right to occupy only and can be transferred only by inheritance.
  5. Tor Bor Tor 5 & Tor Bor Tor 6 - is evidence that the occupier of a piece of land has been issued a tax number and has paid tax for using the benefit of the land. This confers no rights at all but was formerly used to establish that the holder was occupying a piece of land and could apply for a Sor Kor 1.
  6. Sor Kor 1 - entitles the holder to occupy and farm the land. The land must not be sold - it may only be transferred by inheritance. Depending on the land’s location, this document may be upgraded to Nor Sor 3 or Chanote.
How is land measured in Thailand?

Thailand has a very unique way of measuring land. Land is measured by Talang Met, Wah, Ngan, Rai and sometimes Acres. The table below displays the details:

Thai Measure

Contains

Square Metres

Square Feet

1 Talang Met

 

1

10.7

1 Wah

 

4

42.7

1 Ngan

100 Wah

400

4,277

1 Rai

400 Wah

1,600

17,109

1 Acre

2.5 Rai

4,000

42,772

 
Are there property taxes in Thailand?

There are no property taxes as such in Thailand that are exactly equivalent to the property taxes in the west; however, the most comparable taxes on properties in Thailand are the Land Tax and the Structures Usage Tax. The Land Tax levied on land is so miniscule, that in practice the body charged to collect it, rarely bothers to do so, and if they do, they usually wait several years until the amount accumulates. The second tax, the Structures Usage Tax, relates to buildings, is collected by the municipal office or district office, and is only applied to properties used for commercial purpose. Structures Usage Tax is applicable at a rate of 12.5% on the assessed gross rental value of the property. Lessees are not subject to this tax but may be required to pay an “annual ground rent” instead.
 
What taxes and costs are applicable to purchasing property in Thailand?

All purchase/sale of property in Thailand shall be subject to the following costs and taxes:
  1. Stamp Duty of 0.5% of the actual purchase price or the appraised value of the Land Department, whichever is the higher.
  2. Transfer Fee of 2% of the appraised value of property by the Land Department.
  3. Business Tax of 3.3% of the appraised value or the actual purchase price, whichever is the higher, levied against an owner who has been in registered possession of the property less than 5 years.
  4. 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.
Do I need to have a lawyer check the property before I purchase or lease it?

We highly recommend that you have a lawyer undertake a due diligence check on any property before you purchase or lease it.  There are many items that a lawyer will check on the property, but most importantly they will check the following:
•    Does the person you are purchasing/leasing the property from have legal authority to sell or lease it
•    Are there any liens or encumbrances on the land; and if so, how will these be addressed
•    Does the property have legal road access

What are construction costs in Thailand?

Construction costs very much depend on location of the property on the island, on the lay of the land and of course quality of the build.  You can estimate however between 15,000 THB to 35,000 THB per square metre – with 15,000 THB being for your very basic bungalow style build and 35,000 THB being a very high end quality western standard home.

How much does it cost to set up a Thai-registered limited company?

Your lawyer will be able to set up your Thai-registered limited company for you.  This set up will give you a “2 million Baht Company”.  This means that any property you plan to purchase under the company should not exceed the value of 2 million Baht (as this has tax implications when and if you choose to sell the property).  You can increase the capital of your company at any time at a fee of approximately 10,000 THB per 1 million Baht of capital.

To set up your company, you will need to provide your lawyer with a selection of 3 names for your company in order of preference.  The lawyer will check these names on your behalf and register the first available name.  You will also need to provide a list of any and all business ventures that your company may be involved in.  This list can include up to 22 options.  Each year you will be required to submit a balance sheet for your company to the Tax Department.  Your lawyer can undertake this service for you for a fee of approximately 15,000 THB (not including taxes owing, which for a new company, or a company set up solely to hold land, will be very minimal).

How can I get a visa to live in Thailand and/or a work permit?

If you have a Thai-registered limited company you can arrange to have a visa and work permit under this set up.  You can have 1 work permit for every 2 million Baht of capital that your company holds.  So for example, if you need 2 work permits, your company must be a 4 million Baht capital company.

A work permit will cost you around 20,000 THB on the first year of application and a little less for each year of reapplication.  You will need to pay taxes each month for the work permit of around 3,000 THB.

If you are over the age of 50 years, you may apply for a retirement visa.

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