Everything You Should Know About Buying Land in Thailand
As a foreigner, whenever you talk about buying land in Thailand, many will say, “You can’t.”
While this is true to a point, the law doesn’t restrict foreigners from owning land.
We assume that you are reading this article on that basis that your partner is buying land and you want to know the ins and outs so that she/he doesn’t get caught in a very bad situation causing financial or emotional grief. As a married couple, perhaps you are considering buying land in his/her name to build a house for your retirement or simply as a holiday retreat.
Whichever it is, it’s vital that you know what the Thailand process is and what is involved. And believe me, there’s a lot to know. So, please read the following carefully.
Why Should I Take Advice from Real Estate Professionals
About Buying Land in Thailand?
Can I ask, why not seek advice from professionals? Ask around through your network of friends and we guarantee each will have heard of or experienced a Real Estate deal gone wrong, costing them dearly. Most Real Estate agents have experienced this first hand themselves, and through that knowledge, researched and trained to insure it does not happen again, either personally or with clients.
It is our hope to provide information on buying land in Thailand, so that you do not encounter the same real estate pitfalls and have confidence in following the correct path to purchasing your dream property.
So, Can Foreigners Own Land in Thailand or Not?
Foreigners can’t own land in Thailand in their own name! However, a “Thai Registered Company” can own the land, and a foreigner can open a company if they meet the requirements. Legal advisers should be consulted to help with this process and any other legal issues required.
Further, a foreigner married to a Thai citizen can own land in Thailand.
There are legal restrictions to this:
As the non-Thai spouse, you need to state that you have no rights over the land; effectively waiving your rights to claim the property.
The property, though purchased by you, cannot be in your name but will have to be in the Thai spouse.
The married couple may be asked to sign declarations at the Land Department stating that the funds used are the separate property of the Thai spouse.
Problems may still arise during a divorce case. Proving that the land is marital property will be difficult. In instances like these, we highly recommend that you seek legal advice in preparing a Pre-Nuptial agreement prior to marriage, so that there is a binding legal avenue to follow.
So, you can own it, but you have no rights to it when married or in the case of a divorce, only an agreement covering your financial outcome and the well-being of any offspring. As a married couple, the Thai spouse owns the land yet you can own the home it sits upon.
One option you have is to lease. Land can be leased to you on a 30-year rolling basis. As a guide, your wife could buy a piece of land and lease it to you for 30-years. You can build a house on this land and live in it, but you’ll never own the land the house is built on and, when the lease is up, you could be evicted.
So, unless you buy land through your Thai company, when your partner says, “Let’s buy this piece of land”, you need to seriously consider what you are getting yourself into.
If you are going to buy jointly, do your research carefully or deal with a reputable Real Estate Agent who can explain title deeds and any “landmines” you may encounter.
Understanding Land Deeds & Making Sure the Sale is Above Board
Before both of you get to excited and find a property that sounds too good to be true and get pressured into buying a piece of land, the first question you must ask is what type of title deed the land has. In short, anything other than a Chanote should be avoided. However, a Nor Sor 3 is an alternative.
Ask for a copy of the title deed and have it verified before moving further along. Whose name is on the Chanote and make sure the ownership shown on the Chanote is the same as the person you are dealing with. Ask for a copy of their Thai ID and House registration. You would be amazed at the number of people who try to sell land without legal authority!! Is the title registered against any loan, usufruct or mortgage, or being held by a person other than a lending institution, such as a Bank? This is where you benefit by using a professional Real Estate Agent. They have all this researched and confirmed before listing any property. Like other countries, there are predator loan sharks out there and quite often, short term loans are offered in return for the Change to be held by the lender.
There are four types of land ownership/possession in Thailand:
Freehold Title Deed (Chanote Or Nor Sor 4)
This type of title grants the holder of this document full rights over the land, to deal with or to use it to the exclusion of others. Thus, if you’re planning to buy land in Thailand, this type of title deed is the best and most credible title deed to hold.
Nor Sor 3 Gor
A land ‘awaiting’ a full title deed is granted the document Nor Sor 3 Kor.
The land has been surveyed by the Land Department; therefore, it has its exact boundaries.
This type of land may be sold, transferred, or mortgaged in the same manner as land with freehold title deed (Chanote) if it is ready to be a full title deed.
To change the title to a Chanote, the owner of the land may file a petition to the Land Department requesting it be changed to a full title deed (Chanote), and the Land Department may do so if there is no opposition made against the petition.
Nor Sor 3
The difference between this type of land title deed and the Nor Sor 3 Gor is that a land with Nor Sor 3 title has never yet been measured by the Land Department; hence the land has no exact boundaries.
The Nor Sor 3 title may later be switched to a Nor Sor 3 Gor then subsequently transform to that title to a freehold title deed (Chanote) in the future.
This type of title deed is least recommended. A land with a possessory right has never been substantiated by the Land Department, and is only recognized by tax payments at the Local Administrative Office. It is basically, still Government land, allowing a right of occupancy.
To protect your investment, please avoid this title where possible. In saying that, it is common practice to do this, even in today’s Real Estate market, particularly in Villages, which has been common practice for hundreds of years. Understand you position very carefully here if you buy as a couple. You are not buying an asset, simply a right to occupy.