Despite the fact that, unfortunately, the legal process of real estate registration is not the most exciting part of the transaction, it is nonetheless the most important. You will follow exactly the procedure of registration and your “little piece of paradise” will be yours forever; allow yourself to neglect anything – you can lose everything. Although the article below cannot substitute for discussing a transaction with a qualified and experienced lawyer, it can nevertheless serve as a guide describing different options for acquiring real estate in Thailand in an easy and understandable language – without too complicated legal terminology.
Property registered in the name of a foreign citizen
Most foreigners who buy property in Thailand, buy apartments in condominiums in private ownership in his name. According to the latest amendment to the Condominiums Act of 2008, foreigners can acquire up to 49% of the apartments for sale in any building classified as a condominium. Additionally, in addition to the ownership of the area directly bounded by the walls of the apartment, buyers also receive a share in the ownership of the common economic areas related to the building or complex.
Suppose you purchased one of a thousand identical apartments. In addition to owning your apartment, you will also own 0.1% of all other areas of an apartment building: 0.1% ownership of swimming pools, 0.1% ownership of a garden, 0.1% ownership of a fitness center, etc. It will also give you 0.1% of the total votes at meetings organized to resolve major issues regarding the exploitation of joint ownership, if you want to exercise your right to vote.
It is not surprising that due to the reliability and transparency of this form of ownership, it is the one that is most popular among foreigners, although when buying and registering real estate for a Thai company, they can often be offered a better price. While different lawyers may disagree with each other on other forms of ownership, even the most meticulous of them will not dispute the advantage of this form in terms of minimum risks.
But what if you are not interested in purchasing an apartment or want to take advantage of the more advantageous offers available to buyers who invest in the property of the state of Thailand? For such cases, there are other options for registration of real estate, but none of them is not devoid of pitfalls.
Become an outstanding investor
Thailand – a state in which money can overcome any obstacles. Obtaining ownership of the land, however, is not cheap, more precisely, 40 million Thai baht. If you are able to provide the country with such a sum of money, you can buy one paradise (1600 m 2 ) of land and place this land in your name. You need the help of a lawyer to complete all the papers on the transaction – order the services of a professional before depositing funds.
Acquisition of real estate in the name of a spouse
Many single men who come to Pattaya eventually marry Thai. In such cases, it will be attractive for them to purchase real estate in the name of a spouse in order to circumvent all restrictions that prevent foreigners from buying everything in Thailand whatever they want. If you are 100% sure that you and your spouse will live together happily, problems with such ownership of real estate should not arise. Please note, however, that if the marriage breaks down, the property will remain in the property of your spouse and only so that you are guaranteed to lose the right to own it when you part with your wife.
In order for a Thai woman to be able to purchase property in her own name, her husband must give her money in advance for the transaction. The title deed of ownership (known as “Chanot”) will ultimately be issued only in her name, so she will have the right to solely manage the property at her own discretion. The marriage contracts in Thailand are null and void, so it’s impossible to get around the situation in this way.
This raises the question of what happens to the ownership of real estate in the event of the death of one of the spouses. If your death occurs earlier, your spouse will not be obliged to transfer the property to any of your heirs. If your spouse leaves the first life without including you in his will, you may well end up being left without a roof over your head.
Thus, most lawyers will recommend that you abandon this method of acquiring real estate to prevent potential problems.
Long-term land lease for a period of 30 years
Although foreign nationals can not acquire land in Thailand in private ownership, they have the opportunity to arrange it for rent for 30 years. However, most of these tenants are not delighted with the idea that at the end of the rental period they still may not receive income from their investments. Some landlords may try to assure you that this short lease period can be extended for a symbolic amount of money for another 30 years and even a third period of 30 years.
However, unfortunately, any agreement that the 30-year leasing period can be extended is not legally binding. Obligations to extend the contract may be legally secured only for three or less than three years before the expiration of the original contract. Thus, the ability to extend a leasing contract at minimal cost will depend entirely on the willingness of the lessor, provided that it is available at the time when the contract is required to be renewed. At this point, the lessor can sell his ownership of the land, or it can go to his or her direct heir.
Although foreign citizens do not have the right to own land on the basis of private property, they have the right to own their own buildings on an unlimited basis. Due to this, a skilled lawyer can make a contract that will lead to such a stalemate, where the land will still belong to the lessor, but he will not have any rights with respect to the building built on this plot of land. Therefore, you will have the full right to demolish the building with a bulldozer on the last day of the lease contract, and then the lessor will receive back only a piece of land, which you originally rented from him.
Although the cost of land will grow significantly in 2043 compared to its present value, you can still extend the lease contract at a much better price than if you rented both the land and the building built on it.
There is one more option of purchase, the most popular after registration of property in the name of a foreign citizen is the acquisition of real estate and its registration to a company registered in Thailand, in which foreigners own 49% of the shares. Since this is the most incomprehensible and least transparent option, we will look at it in a separate article .