Land ownership by foreigners in Thailand

Foreigners are not allowed to own land in Thailand. According to section 86 Land Code Act foreigners may acquire land in Thailand only by virtue of the provision of a treaty providing him with the right to own immovable property. Since 1970 Thailand has no longer any treaty with any country allowing any foreigner to acquire land pursuant to section 86.

Read more: Land Laws Amendment Act on Alien Ownership

Real estate ownership for foreigners

Foreigners cannot own land in Thailand but are allowed to lease land under a land lease agreement registered with the land department and own the structure built on leased land. Obtaining the correct legal ownership of the building greatly increases the land lessee's rights and long term interest in the property. The right to own a building upon another man's land however always relates to the right to use and possess the land, i.e the term of the land lease (and optional the term of an additional right of superficies).

Read more: Foreign home ownership in Thailand

Supplemental contracts in a lease

As foreigners are not permitted to own land in Thailand the standard contract under which real estate is 'sold' to foreigners is a lease. Residential leasehold housing and apartment projects in the tourist areas often include service and maintenance agreements as an integral part of the lease. Services delivered and the annual price increases are often determined by the developer and as these contracts are an ongoing financial burden it is important to undertand the importance of these contracts before accepting the lease.

Read more: Management and maintenance contracts in a lease

Thailand property tax in a rental

There are no general property taxes (capital tax on property imposed by the government) in Thailand, but real properties put to commercial use and not used for residential purposes by the owner are under the Building and Land Tax Act B.E. 2475 required to pay a property tax at a rate of 12,5 % of the annual rental value or the annual assessed rental value (if no rent is paid or the declared rent is considered too low). The annual assessed rental value is based on a calculation method over the appraised value of the property (land, house, apartment). If anyone leases a property at a rent lower than a reasonable rent, the amount could be adjusted and lessor could be taxed on what the rent should have been.

Read more: Property tax, building and land tax