absolutelyBangkok archive · Property & Investment
Originally published Sept. 26, 2007
Foreigners wanting to buy property in Bangkok: Books filling a small library have been written about this very subject.
Foreigners are fearful, as the Thai law is a jungle. And tragedy may be near, if property has to be bought under the name of a Thai partner.
We all heard about cheating Thai wives disowning foreign husbands and throwing them out of their beloved houses, leaving them not even with what little was left of their little last pride.
We hear about tragedies after bitter divorce battles, such as kind foreigners being cheated, thrown in prison, even killed by their Thai wives, to whom their own tribes in the end is more important than promises and love.Should, can, dare a foreigner risk buying property in Bangkok — or Thailand as such?
We make it sweet and short for you, give you the very essentials.
First and foremost, even with the current slump in property prices, property in Thailand remains „good value — but it will not increase in price much”, investment guru Marc Faber (who by the way resides in Chiang Mai) told absolutelyBangkok.com Speculators therefore will find Thailand’s property sector a rather bloody battle field.
But if you, as a simple investor, have found a property, that fulfills following three basic criteria: 1. Convenience; 2. Convenience; 3. Convenience, then you as a foreigner can own property in your own name under following conditions:
– You buy a condominium, whereas foreigners cannot hold more than 49 % of all the units.
– You are allowed to own up to 1 rai of land (1,600 sqm) in your own name if you invest 40 million baht in Thailand and receive a “Board of Investment” approval.
– You become a Thai citizen, which is not impossible after all. Get the Residency Permit first. Five years after that you’re allowed to start the massively bureaucratic procedure of becoming a Thai national. Main requirements: You have to be able to sing the Royal and the national anthem in front of an audience of officers and officials.
Latter has been achieved by quite some friends here. But most of us foreigners in Thailand will remain foreigners forever. So what if you absolutely want to own that plot of land that you cannot own?
The most simple way remains marriage with a Thai person you trust.
But: A Thai spouse must prove that the money used in the purchase of freehold land is legally solely hers with no foreign claim to it. When getting the „Chanoot“ (title deed) at the land department, she has to state that the funds used for the purchase of property belonged to the Thai spouse prior to the marriage and are beyond the foreigner’s claim.
I heard though that creative lawyers may overcome this problem in case of an ugly divorce. But that lawyer alone will cost you some arms and legs.
The most common way to „own“ land as a foreigner is a lease over 30 years, extendable over two further periods of each 30 years to a maximum of 90 years. Some lawyers are able to issue lifelong leases. But beware: The land you lease has to be bought by a Thai person or company you trust. Your — if foreign — family has no right of inheritance whatsoever. Well, sort of. The foreign part has to sell the property within a year. Or can transfer it to a beneficiary.
The most elegant way to have a certain sense of security over your land and house is the Right of Usufruct, also called Habitational Right or Superficies.
Usufruct is the right to use a property that belongs to another. This right is valid for life and will be stamped into the Chanoot.
Even if you will have a fight with the Thai owner and he wants to sell the plot of land, nobody would buy a property with a foreigner’s Habitational Right — which allows to use the premises even you don’t own the land.
Those are the options you have. Getting the right visa is another gauntlet which absolutelyBangkok.com will guide you through in the following weeks.
First and foremost: If you still trust that lawyer telling you that you can safely set up your own majority Thai owned company to own land: Never, never ever buy land and a house under a shell company.
Yes it works, your lawyer will promise. It does. On the paper. But is not worth the headaches that may follow.
Government officials now and then threaten a crackdown against these pseudo-companies in which the foreigner, the minority shareholder, actually owns the majority due to pre-signed waiver declarations of the seven Thai majority shareholders.
The whole setup is as unstable as a house of cards. Rather loose your money by having fun gambling than by trying to dodge the law.
As a rule of thumb: There are no problems for foreigners in Thailand whatsoever. As long as you follow the rules.
If you try to bend those seemingly flexible rules of law, you’ll sooner or later find yourself in a never ending mess of law.
Play it safe. You’ll be fine.
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