Thailand Real Estate Law
Real estate law in Thailand for buying property is clear and easy to understand. We distinguish between land, house, and flats. And between freehold and leasehold in terms of legal form.
Land can only be bought by Thai individuals and Thai legal entities. That is, by Thais and by Thai companies. In the case of Thai companies, the managing director and all shareholders must be Thai at the time of purchase. According to Thai law, a foreigner is not allowed to buy land in Thailand in his own name.
The house can be bought by foreigners or by Thais or by Thai or foreign companies.
In an apartment building with many flats there is a fixed quota. In an example of 100 flats; a maximum of 49 flats may be sold to foreigners. And 51 or more flats must be sold to either a Thai individual or Thai legal entity. The proportion of flats owned by foreigners may never be higher than 49%.
What is Freehold in Thailand?
A freehold is the customary legal form of ownership of real estate or land and any immovable structures attached to that land. It contrasts with a leasehold, where the ownership reverts to the owner of the land after the leasehold expires. If the duration of ownership can be fixed and determined, it cannot be a freehold.
What is a leasehold?
A leasehold is similar to a building lease. If a landowner grants a person a temporary right to build on or under his land, or to use the land and everything on it during that time. This is either a building right or a leasehold. The landowner renounces his own use during this period and receives a leasehold interest in return.
The maximum duration for the leasehold in Thailand is 30 years. Some lawyers offaer two further extensions of another 30 years each. The building lease must be registered at the land registry on the back of the land deed. However, only the first 30 years can be registered on the land deed. The buyer must also pay the tax for the 30 years to the land registry.
Title Deed ( Chanote or Nor Sor 4 ) (The colour of the logo in the title of the document must be red)
This type of title grants the holder of this document all rights over the land to trade or use it to the exclusion of others. If you want to buy land in Thailand, this form of land deed is the best and most credible one to have.
Title Deed (Nor Sor 3 Gor ) (The colour of the logo in the title of the document must be green)
A piece of land that is waiting to be converted into the next higher legal form is given the document Nor Sor 3 Gor. The land is surveyed by the land authority; it therefore has its exact boundaries. This type of land can be sold, transferred, or mortgaged in the same way as land with a title deed (Chanote), if it is ready to become a full title deed. To change the title to a Chanote, the owner of the land can apply to the Land Department to change it to a Full Title Deed (Chanote) and the Land Department can do so if no objection is raised to the application.
Title Deed (Nor Sor 3)
(The colour of the logo in the title of the document must be black)
The difference between this type of land title and the Nor Sor 3 Gor is that land with a Nor Sor 3 title has never been surveyed by the Land Department.
Therefore, the land has no exact boundaries which are registered at the Land Office. The Nor Sor 3 title can later be changed to a Nor Sor 3 Gor.
Every time a land title is changed, various costs are incurred.
The land title also determines the value of the land. This means that a plot with a Chanote (Nor Gor 4) is worth much more than a Nor Sor 3.
We always evaluate the best value for money for our clients.