BUYING & OWNING PROPERTY IN THAILAND
Owning Property In Phuket, Thailand
Land Titles and Verification
The principal land titles in Thailand are either "Chanote" or "Nor Sor Sam Gor". They are effective title instruments which allow the land to be sold, leased or mortgaged. Purchasing property, whether freehold or leasehold, must necessarily involve a careful inspection or verification of the title. That inspection should examine such things as ownership, identity of relevant parties, zoning, building permits, registered encumbrances, access and right of way, adverse possession, utility supplies and development plans of neighbouring properties, as well as information gleaned from visiting the land. It is important to use the services of a professional law firm.
Buying Property : Freehold and Leasehold
Foreigners cannot own land in their individual names, however, they can own freehold condominiums (apartments) and they can own a building on the land. Most foreigners hold land by registered renewable leases, each of 30 years duration. Foreigners can also form a Thai company which can own freehold land. So, for example, a foreigner may have a Thai company that owns the land and then leases it to the foreigner who also owns the villa on the land.
Owning Freehold Land via a Thai Company
Foreigners cannot own more than 49% of the shares in the company with a majority of Thai shareholders. It is vital that the correct legal structure is established to retain effective control of the land owning company. It is also important not to violate anti-agency and anti-nominee provisions of the law. There are tax implications and legal responsibilities associated with the management of a Thai company. A personalized company designed for a foreigner to own land costs about ₤750.
Transfer and Other Fees on Buying and Selling Land
This table sets out the general taxes and fees applicable, which may be shared between the buyer and the seller.
| Type of Tax | Tax Rate (Individual Seller) | Tax Rate (Corporate Seller) | Person who is responsible for tax |
| Land Registration Fee | 2% on the official assessed value of the property | (Same as individual seller) | Seller and Buyer unless otherwise stipulated in the contract |
| Withholding Tax | 5-37% (subject to special deductions allowable to individuals) creditable against income tax at year end | 1%, creditable against corporate income tax at year end | Seller |
| Special Business Tax | 3.3% based on the selling price or the officially assessed price, whichever is higher (maybe exempt if held as residence for over 1 year.) | (Same as individual seller) | Seller |
| Stamp Duty | 0.5% based on the selling price or the officially assessed price, whichever is higher, but exempted if SBT is payable | - | Usually Seller and Buyer |
For investment properties there is a structure usage tax of 12.5% on the gross rental value of the property, however appropriate lease arrangement can reduce this tax.
The above is for general informational purposes only, and may not apply in all cases. You should consult a legal professional if you are purchasing or leasing property.