There are two categories of property right that can be acquired: ownership and the right of possession.
In addition to exclusive ownership, the Thai Civil and Commercial Code recognizes the following rights:
Last modified 19 Jul 2023
Yes. Unless specifically permitted by law, foreigners are not allowed to own land in Thailand. Foreigners, as defined by the Land Code, include Thai-registered companies where more than 49% of the capital is owned by foreigners or more than 50% of the number of shareholders are foreigners.
Foreigners may, however, acquire land to live on, for commerce, industry, agriculture, burial, public charity or religion subject to the conditions and procedures prescribed in ministerial regulations and with the permission of the Minister of the Interior. Also, foreigners who have made qualifying investments in Thailand of not less than THB 40 million may own up to one rai (1,600 square meters) of land for residential use, subject to the permission of the Minister of the Interior and the requirement under the Ministerial Regulations. Foreign land ownership exceptions exist under the Petroleum Act, the Investment Promotion Act and for businesses located in certain industrial estates, with respect to areas of land needed to carry on the relevant business.
Last modified 19 Jul 2023
No pre-emption rights apply to the sale of real estate assets.
Last modified 19 Jul 2023
The main legislation governing the transfer of real estate is as follows:
Last modified 19 Jul 2023
No.
Last modified 19 Jul 2023
Under the Civil and Commercial Code, a sale of land or real estate must be made in writing on the official form of the Land Department and be registered with the competent official at the relevant land office which the land or real estate is situated.
Last modified 19 Jul 2023
Yes, real estate is registered. Ownership of land or real estate, as well as other forms of rights in land, such as leases of over three years, mortgages, rights of servitude, habitation, superficies and usufruct must be registered by a competent official at the relevant land office for the area in which the land is situated.
Transfers of land are recorded. Every transfer of title must be registered at the relevant land office in which the land is situated. After the completion of registration, the information recording the transfer of ownership of the land or real estate will be recorded at the relevant land office.
Title insurance does not exist in Thailand.
Last modified 19 Jul 2023
Following the investigation of the land title deed and ownership of the land or real estate, the parties will enter into a sale and purchase agreement and register the land or real estate transfer of ownership at the relevant land office in which the land is situated.
Last modified 19 Jul 2023
The buyer will use his discretion as to whether he wishes to carry out due diligence. Buyers (with the assistance of their lawyer) will normally conduct due diligence on significant transactions involving commercial property, hotels, resorts, department stores, etc before entering into the sale and purchase agreement.
Last modified 19 Jul 2023
Yes. In addition to specific consents required due to the legal capacity of the seller and the buyer (for example, in the case of minors or the mentally disabled), if the seller has a spouse, the seller must have a written consent from his/her spouse before the transferring any type of land or real estate.
Last modified 19 Jul 2023
Yes. There are standard forms of sale and purchase agreement in the case of
Under the Land Development Act, a sale and purchase agreement between the developer and its buyers must be made on the standard form provided by the Central Land Development Committee. If any part of the sale and purchase agreement does not accord with the standard form of the Central Land Development Committee and is not beneficial to the buyer, that part of the agreement will not be enforced.
Under the Condominium Act, a condominium unit sale and purchase agreement between the owner of the land and building and the buyer must be made on the standard form provided by the Minister. If the sale and purchase agreement does not follow the standard form and such information cannot be interpreted in such a way as to benefit the buyer, that part of agreement will not be enforced.
For all other sales and purchases, the parties are free to negotiate the terms as they see fit. However, the essentials of a sale and purchase agreement should include the parties' identities, details of the property to be sold, the purchase price and the date of registration for the transfer of ownership. On the registration date, the parties will enter into an official form of sale agreement and the agreement for the transfer of ownership will be registered with the competent official at the relevant land office for the area in which the land or real estate is situated.
Last modified 19 Jul 2023
Under the Civil and Commercial Code, the seller's warranties are as follows:
Last modified 19 Jul 2023
The buyer will have the right to terminate a sale and purchase agreement and seek recovery from the seller for all actual damages incurred, and have the right to seek specific performance of the seller's obligations under the sale and purchase agreement.
Last modified 19 Jul 2023
The important areas of public laws for an investor to consider when purchasing the land or real estate are the relevant Town Planning, Building Control Act and relevant environmental legislation. Additionally, an investor should verify that the land or real estate is not state property.
An investor should also satisfy itself:
Last modified 19 Jul 2023
Yes. The National Environment Quality Act provides that an owner, occupant or possessor of a pollution source will be liable for any damage due to such pollution. As a result, the buyer will be responsible for any existing soil pollution or contamination of the land or building after the date of registration of the ownership transfer.
Last modified 19 Jul 2023
The buyer should confirm with the relevant official of the Department of Public Work and Town and Country Planning and review the relevant Town Plan to which the land or real estate is subject as to whether the buyer’s intended use of a parcel of land or real estate is a permissible use in accordance with the relevant Town Plan. Please note that a landowner may only use its land to the extent that the use is not prohibited in the zone to which the land belongs. Additionally, the local authority will consider whether the landowner's intended use of the land is permissible under the relevant Town Plan before issuing a construction permit.
Last modified 19 Jul 2023
No. It is not possible to enter into specific development agreements with relevant public authorities to facilitate the project.
Last modified 19 Jul 2023
Yes. Expropriation is possible in Thailand. Under the Expropriation of Immovable Property Act, subject to certain requirements, governmental entities can expropriate immovable property for the purpose of public utilities, military purposes, agricultural development, or town and country planning. The Act provides the governmental entities with the absolute and unilateral right to exercise this power and the expropriated property owners must comply with any expropriation order. However, the owners will be entitled to receive compensation as provided by the Act.
Last modified 19 Jul 2023
The following are tax considerations regarding the purchase of assets:
A seller's income derived from the sale of land or real estate will be subject to Thai corporate income tax at a rate of 20% (although the normal rate is 30%) and subsequent years. The tax is applied to the net profits derived from the sale of the land or real estate. The net profit or gain is calculated by taking the gross proceeds from the sale and deducting the direct cost and relevant administrative expenses for the sale of the land or real estate.
The payment attributable to the price charged on transfer of land or real estate or official appraisal value as recorded by the Land Department, whichever is greater will be subject to withholding tax at the rate of 1% in the event that the seller is a legal person. This withholding tax can be used to offset the corporate income tax payable at the year-end and if it exceeds the corporate income tax payable, the seller can claim a cash refund.
In the event that the seller of land is an individual person, the withholding tax rate will be calculated on the basis of the official appraisal value with a deduction based on 'possession years', which varies depending on the number of years that the seller has been in possession (the more years of possession, the more the deduction), and based on the seller's progressive income tax rate (ranging from 5% to 35%).
The seller will be subject to specific business tax at the rate of 3.3% (including municipal tax) on the sales price of the land or real estate or the official appraisal value as recorded by the Land Department, whichever is greater.
The seller is subject to 0.5% stamp duty on the sales price of the land or real estate or the official appraisal value as recorded by the Land Department, whichever is greater. The stamp duty is inapplicable if the Specific Business Tax has been paid on the sale of the land or real estate.
A transfer fee applies at the rate of 2% of the official appraisal value of the land or real estate and is borne equally by the parties unless otherwise provided in the agreement.
Last modified 19 Jul 2023
Stamp duty should be paid at the rate of 0.1% on the greater value of the paid up registered value of shares or the sales proceeds value resulting from the sale of the shares; and the buyer of the shares will have to deduct withholding tax at the rate of 15% unless otherwise exempted by a double-taxation agreement.
Last modified 19 Jul 2023
Are special consents required for certain transactions (for example, consent by a spouse)?
Yes. In addition to specific consents required due to the legal capacity of the seller and the buyer (for example, in the case of minors or the mentally disabled), if the seller has a spouse, the seller must have a written consent from his/her spouse before the transferring any type of land or real estate.
Last modified 19 Jul 2023