1. OWNERSHIP AND LAW
OWNERSHIP TYPES IN THAILAND
As a foreign buyer in Thailand, you have several ownership types available. The right structure depends on the property type, your goals, and your individual situation.
FREEHOLD (PERPETUAL OWNERSHIP)
For Condominiums
Foreigners can purchase condominiums directly under freehold, as long as the foreign ownership share in the building is below 49%.
Advantages
- Full ownership rights without time limit
- Freely transferable and inheritable
- No renewal risks
- Land Registry Registration (Chanote)
Disadvantages
- Only available for apartments, not for houses with land
- Foreign quota must be available
- Higher purchase price than comparable leasehold units
Important Before purchasing, check whether freehold units are still available for foreigners. Developers often reserve a portion of units for foreign buyers.
LEASEHOLD (LEASE AGREEMENT)
Leasehold is the most common structure for foreigners wanting to buy houses or villas with land.
Structure
- Initial term: 30 years (guaranteed)
- Optional: 2 renewals of 30 years each (90 years total)
- Land Registry Registration as a leasehold right
Advantages
- Access to houses and villas with land
- Significantly cheaper than freehold
- Legally secured through land registry entry
- Transferable and inheritable (within the lease term)
Disadvantages
- No perpetual ownership rights
- Renewals must be renegotiated
- Value appreciation limited (remaining term becomes shorter)
- On resale: buyer takes over remaining term
Important Ensure the leasehold agreement is registered at the Land Office. Only then is your right legally secured.
THAI COMPANY (COMPANY STRUCTURE)
This structure is used to formally hold "Thai" land ownership as a foreigner.
How It Works
- Establishment of a Thai Limited Company (51% Thai majority)
- The company purchases the land in its own name
- You become director and control the company through powers of attorney and shareholder agreements
Advantages
- Access to land and houses
- Formally full ownership rights of the company
- Long-term control possible
Disadvantages
- Legally disputed ("Nominee Structure")
- Annual accounting and tax costs
- Risk from regulatory changes
- Complex structure with maintenance effort
- Harder to sell (buyer must take over structure)
Warning This structure operates in a legal grey area. Thai law prohibits nominee structures (sham shareholdings) where Thai shareholders are only involved pro forma. Review the legal situation carefully.
WHICH STRUCTURE SUITS YOU?
Freehold is recommended if
- You want to buy a condominium
- Long-term value preservation is important
- You want to pass it on or sell later
Leasehold is recommended if
- You are looking for a house or villa with land
- 30 years of usage duration are sufficient
- Price and access are more important than perpetual ownership
A Thai company should only be chosen if
- You need long-term control over land
- You are prepared to bear annual costs and administrative effort
- You are aware of the legal risks and have good legal counsel
2. NEW BUILD VS. RESALE PROPERTIES
THE DECISION: NEW BUILD OR RESALE?
One of the first steps when buying property is choosing between new build projects and resale properties. Both options have pros and cons, depending on your goals, budget, and risk tolerance.
NEW BUILD PROJECTS (OFF-PLAN & COMPLETION)
New builds include projects in the planning or construction phase (off-plan) as well as recently completed properties.
Advantages
- Modern fixtures, current standards, and designs
- Developer guarantees on build quality and defect repairs
- Instalment payments during construction (lower initial investment)
- Value appreciation potential until completion
- No immediate renovation costs
- Energy-efficient construction and lower running costs
Disadvantages
- Construction risk, delays or quality issues possible
- Developer risk, financial instability can jeopardise projects
- No immediate availability or rental possibility
- Higher prices per sqm than comparable resale properties
- Surroundings and community not yet established
Important to check
- Track record and financial stability of the developer
- Construction progress and realistic completion dates
- Contract clauses on delays and quality defects
- Development of the surroundings (roads, infrastructure)
EXISTING PROPERTIES (RESALE MARKET)
Resale properties are already completed and usually occupied. They can be viewed and taken over immediately.
Advantages
- Immediate availability, no waiting for completion
- Property viewing before purchase, you see what you get
- Established neighbourhood and functioning infrastructure
- Usually lower price per sqm than new builds
- No developer risk or construction delays
- Negotiation potential (motivated sellers, market conditions)
Disadvantages
- Possible renovation costs or maintenance backlog
- Older building fabric and standards
- No warranties (except for recently completed properties)
- Higher running costs (older buildings are less energy-efficient)
- Full payment usually due immediately (no instalments)
Important to check
- Condition of building fabric, installations, and fixtures
- Reason for sale and negotiation room
- Common area costs, maintenance reserves, and running costs
- Legal cleanliness (ownership title, encumbrances, debts)
WHEN DOES WHICH OPTION FIT?
New build is recommended if
- You want modern fixtures and current standards
- You prefer instalment payments during construction
- Value appreciation until completion is a goal
- You are prepared to wait for completion (no immediate use)
- The developer has a solid reputation and track record
Resale property is recommended if
- You need immediate availability (own use or rental)
- You want to view the property before buying
- Value for money is more important than latest standards
- You prefer an established neighbourhood and infrastructure
- You want to use negotiation room
HYBRID APPROACH: RECENTLY COMPLETED NEW BUILDS
A third option is recently completed new build projects that have not yet been fully occupied. This combines advantages of both approaches.
- Modern fixtures without construction risk
- Immediate availability
- Developer warranties often still available
- Some negotiation room (if the developer wants to sell quickly)
This approach is particularly interesting if you want the advantages of a new build but want to avoid construction risk.
3. THE BUYING PROCESS
OVERVIEW: FROM FIRST VIEWING TO TRANSFER
Buying property in Thailand follows a structured process. The better you understand each step, the more confident your decision will be.
1. Property Selection and Reservation
After viewing, a reservation fee (typically 50,000–200,000 THB) is paid to temporarily take the property off the market.
2. Sales and Purchase Agreement
The purchase contract sets out all key conditions. It should always be reviewed by an independent lawyer. At this point, an independent lawyer should already be engaged.
3. Due Diligence
Before final payment, the legal and technical review must be completed (see section 5).
4. Final Payment and Ownership Transfer
The ownership transfer takes place at the Land Office. Both parties must be present (or represented by an authorised lawyer).
5. Land Title Registration
After successful transfer, you receive the title document (Chanote). This is the legally binding proof of your ownership.
TIMELINE
From reservation to ownership transfer, typically 30–90 days pass, depending on the complexity of due diligence and the payment structure.
4. COSTS AND TAXES
PURCHASE COSTS
Various costs arise when purchasing property in Thailand that go beyond the purchase price.
Transfer Fee (Transfer Tax)
2% of the registered land value. This fee is often shared between buyer and seller.
Stamp Duty (Stamp Duty)
0.5% of the registered value or purchase price (whichever is higher).
Business Tax
3.3% of the selling price, if the property was owned by the seller for less than 5 years.
Legal Fees
1–2% of the purchase price for legal advice and due diligence.
ONGOING COSTS
Property Tax (Land & Building Tax)
Annual, for residential properties usually between 0.02%–0.1% of the estimated value.
Common Area Fees (Common Area Fees)
Monthly, depending on the complex, between 30–80 THB per sqm.
Sinking Fund
One-time payment at purchase (approx. 500–1,000 THB/sqm) for long-term maintenance.
As a rule of thumb, budget for additional purchase costs of 4–7% of the purchase price.
5. DUE DILIGENCE
LEGAL REVIEW
Thorough due diligence is the most important step before buying.
Verify ownership
Verification of the Chanote (title deed) at the Land Office. Ensure the seller is the registered owner and no encumbrances exist.
Foreign quota for condominiums
Freehold ownership is only possible if the 49% foreign quota in the building is not exceeded.
Zoning plan and permits
Check whether the building was legally constructed and all required permits are in place.
Contract Review
The purchase contract should clearly cover all key points: purchase price, payment plan, handover date, defect liability.
TECHNICAL REVIEW
Property Condition
For resale properties, a technical assessment is recommended. Watch for moisture, cracks, electrical systems, and the general condition of common areas.
A comprehensive due diligence costs 1–2% of the purchase price and takes 2–4 weeks.
6. COMMON MISTAKES
Many buyers make similar mistakes. Knowing them helps you avoid them.
Emotional Decisions
Holiday impressions should be supplemented by a thorough investment analysis.
Unrealistic Return Expectations
Promises of "guaranteed returns" should be carefully examined. Calculate conservatively with 40–60% occupancy.
Underestimating leasehold
30 years of leasehold is not the same as ownership. You only hold the right of use, not the land.
Ignoring additional costs
Purchase costs, ongoing fees, and management costs add up.
No Exit Strategy
The resale market is slower than in many countries. Plan for the long term.
Poor Management
Without professional management on site, your property will not be optimally rented out.
7. TAX IMPLICATIONS
Tax treatment for international property ownership depends on your country of tax residence and individual circumstances. The following is a general overview for NRI investors.
Rental Income
Rental income generated from property in Phuket may be subject to taxation both in Thailand and in your country of residence.
Double taxation agreements may apply, depending on your jurisdiction, and can allow for partial tax relief or credit.
Capital Gains
Profits from the sale of property may be subject to capital gains tax in your country of tax residence.
The applicable rate and holding period rules vary significantly depending on jurisdiction and individual tax status.
Inheritance & Wealth Transfer
Cross-border inheritance and succession laws may apply to overseas property holdings.
In some cases, both local Thai regulations and home country inheritance tax rules may be relevant.
RECOMMENDATION
NRI investors should consult a qualified international tax advisor familiar with both their country of residence and Thai property structures. Tax outcomes depend heavily on personal circumstances and structuring choices.