Property & Real Estate

Foreigners cannot own land in Thailand. This is a foundational restriction under the Land Code Act of 1954 that applies to all non-Thai nationals regardless of residency status or investment amount. However, Thai law provides several clear and legal pathways for foreign property interests. Foreigners can own condominium units outright (freehold) under the Condominium Act, provided the 49% foreign ownership quota in the building has not been reached. For villas and houses, foreigners can own the building structure itself while securing rights over the land through a registered 30-year lease, a right of superficies, or a usufruct. Alternatively, a properly structured Thai limited company may hold land — though it must conduct genuine business and cannot serve as a mere vehicle to circumvent foreign ownership restrictions (which constitutes an illegal nominee arrangement).

You can own the building in your own name, but not the land it sits on. Thai law treats buildings and land as separate legal assets. The most common arrangement is: the foreigner signs a registered 30-year lease on the land with the Thai landowner, and separately registers ownership of the villa or house structure through the construction permit and House Registration Certificate (Tabien Baan). Alternatively, a right of superficies can be registered to formally separate building ownership from land ownership. The foreigner then owns the physical villa outright — it can be sold, modified, or inherited — while the land is secured through the lease or superficies for the registered term.

In practice, Thai banks very rarely offer mortgage financing to foreign nationals. There is no outright legal prohibition, but the lending criteria effectively exclude most foreign applicants: banks typically require Thai-source income, permanent residency, or a Thai guarantor. The vast majority of foreign property purchases on Koh Samui and Koh Phangan are therefore made in cash, or through international financing arrangements (such as a mortgage against assets in your home country). Some developers offer installment plans — typically requiring 30–50% down payment with the balance spread over the construction period — but these are not conventional mortgages and the terms should be reviewed carefully before committing.

For condominium purchases, yes — this is a legal requirement. The full purchase price must be remitted into Thailand from abroad in foreign currency, and you must obtain a Foreign Exchange Transaction (FET) form from your Thai bank as proof. This document is mandatory for title registration at the Land Office and is also essential if you later wish to repatriate the proceeds from a sale. For leasehold property, there is no strict legal requirement to remit funds from overseas, though it is strongly advisable for documentation and future repatriation purposes. In practice, we always recommend clients transfer funds through proper banking channels with clear documentation of the purpose, as Thai banks are increasingly scrutinising the source of funds used in property transactions.

Condominium freehold is the most straightforward form of foreign property ownership in Thailand. Under the Condominium Act, up to 49% of a registered condominium project's total sellable area may be owned by foreign nationals. Key requirements include: the project must be a properly registered condominium (not merely an "apartment" building); funds must be remitted into Thailand from abroad in foreign currency, documented by a Foreign Exchange Transaction (FET) form from your Thai bank; and the juristic body must confirm quota availability in writing. At registration, you present your passport, the FET form, the sale agreement, and the juristic confirmation letter to the Land Office. A Chanote title deed is then issued in your name, granting permanent freehold ownership with full rights to sell, rent, or pass by inheritance.

Only partially. Thai law permits a maximum registered lease term of 30 years. While it is common practice to include contractual clauses granting options to renew for two additional 30-year periods (totalling 90 years), these renewal clauses are not automatically enforceable. The initial 30-year registered term is fully protected — a subsequent buyer of the land remains bound by it. However, renewal options are personal contractual rights between the original parties: they require the lessor's cooperation to execute, they may not survive the lessor's death or sale of the land, and Thai courts have not consistently enforced them. A well-drafted lease can maximise the probability of renewal, but any buyer should make investment decisions based on the guaranteed 30-year term, treating renewals as a favourable possibility rather than a certainty.

Beyond the initial purchase, property owners should budget for: (1) Land and Building Tax — an annual tax introduced in 2020, charged at progressive rates of 0.02% to 0.10% of appraised value for residential properties; (2) Common Area Maintenance (CAM) fees for condominiums, typically THB 30–80 per square metre per month; (3) Lease renewal costs when a leasehold term expires and is renegotiated; (4) Thai company maintenance costs if property is held through a company — including annual auditing fees, bookkeeping, corporate tax filings, and director obligations; (5) Insurance, which while not legally required is strongly advisable; and (6) Rental income tax obligations if the property is let — foreign owners not resident in Thailand are subject to 15% withholding tax on rental income.

Expect total government costs of approximately 2.5% to 6.3% of the property's official appraised value. The four core charges are: (1) Transfer Fee at 2% of appraised value, typically split 50/50 between buyer and seller; (2) Withholding Tax, calculated on a progressive scale based on appraised value, ownership duration, and the seller's income bracket (1–5% for individuals, 1% flat for companies); (3) Specific Business Tax (SBT) at 3.3% if the seller has owned the property for less than five years; or (4) Stamp Duty at 0.5% if the property has been held over five years (SBT and stamp duty are mutually exclusive). The split of these charges between buyer and seller is negotiable and should be clearly set out in the sale-and-purchase agreement. Note: reduced transfer fee rates currently available to Thai nationals (0.01% for properties under THB 7 million) do not apply to foreign buyers.

Both islands are subject to specific zoning regulations that differ significantly from mainland Thailand. Koh Samui has had zoning rules in force since 2006 designating areas for agricultural, residential, commercial, and conservation use. Building height restrictions apply across most zones — generally limiting structures to a maximum of 12 metres or three storeys — which is why the island has very few high-rise developments. Coastal setback requirements restrict construction within specified distances from the shoreline. Koh Phangan has additional environmental protections, particularly around its mountainous interior and national park areas. Any development or construction project requires confirmation of the land's zoning status, relevant permits, and compliance with local municipal regulations. We verify these as part of our due diligence process and can advise on what can legally be built on any given plot.

Inheritance rules depend on the asset type. A condominium owned freehold can generally be inherited by foreign heirs, provided the foreign quota is not exceeded and the heir qualifies under the Condominium Act — otherwise, it must be disposed of within one year. Land inherited by a foreigner (for example, from a Thai spouse) must be sold within one year under Section 93 of the Land Code; the foreigner cannot retain ownership. A leasehold is a personal contractual right that, under general Thai law principles, terminates upon the lessee's death unless the lease agreement expressly provides for inheritance — this is a critical clause we always include. A right of superficies registered for a fixed term is transferable and inheritable, making it a stronger option for estate planning. Shares in a Thai property-holding company can be inherited, but require formal transfer at the Ministry of Commerce. In all cases, having a properly drafted Thai will is essential to avoid costly probate delays.

The Chanote (Nor Sor 4 Jor) is the highest-grade land title in Thailand. It provides definitive proof of ownership with GPS-surveyed boundaries linked to the national survey grid, uniquely numbered concrete markers, and full transferability including the right to sell, lease, mortgage, or bequeath. Lower-grade titles — including Nor Sor 3 Gor (confirmed boundaries but not GPS-linked), Nor Sor 3 (approximate boundaries), and possessory rights — carry progressively less certainty and more risk. On Koh Samui and particularly Koh Phangan, a significant number of properties are still held under Nor Sor 3 or lower documents. We strongly advise against purchasing property without at least a Nor Sor 3 Gor title, and preferably a Chanote. Our due diligence process always identifies the title type and its implications for your investment.

Due diligence is a comprehensive legal investigation of the property you intend to purchase, conducted before any binding commitment. It verifies: the authenticity and type of title deed (Chanote being the highest grade), the seller's confirmed ownership and right to sell, any registered encumbrances such as mortgages, liens, or easements, pending litigation or government claims, zoning classification and building restrictions, environmental protections (especially relevant for coastal properties on Samui and Phangan), and the status of the foreign ownership quota for condominiums. On the islands, we also check access road status, utility connections, and whether the property overlaps with any national park or protected forest land. Skipping due diligence is the single most costly mistake foreign buyers make in Thailand — issues like forged titles, boundary disputes, and undisclosed encumbrances can result in total loss of investment.

A nominee arrangement is where a Thai national or Thai-majority company holds land on behalf of — and under the control of — a foreigner, in order to circumvent foreign land ownership restrictions. This is illegal under Thai law. The Land Code Act (Sections 96 and 113) and the Foreign Business Act impose criminal penalties including imprisonment of up to three years, heavy fines, forced sale of the property, and potential company dissolution. Thai authorities actively investigate and audit suspected nominee structures. There is no legal "grey area" or safe workaround: if the Thai shareholders in a company are not genuine investors with real economic participation, or if the foreigner effectively controls all decision-making, the arrangement is at serious risk. We advise clients to use only legitimate structures — leasehold, superficies, usufruct, or genuine company arrangements — to secure their investment.

Freehold means outright, permanent ownership — available to foreigners only for registered condominium units within the 49% foreign quota. You hold a title deed (Chanote) in your own name with the right to sell, mortgage, and bequeath the unit. Leasehold is a registered contractual right to use land (and typically a building) for a maximum term of 30 years. It is not ownership, but it grants exclusive possession and must be registered at the Land Office to be enforceable. Renewal clauses for additional 30-year terms can be included in the contract, but Thai law does not guarantee enforcement of future renewals — only the initial 30-year registered term carries full legal protection. The choice between leasehold and freehold depends on the property type, your investment horizon, and your tolerance for structural complexity.

Both are registered real rights under the Thai Civil and Commercial Code, but they serve different purposes. A right of superficies (Sections 1410–1416) allows you to own buildings or structures on someone else's land. It legally separates building ownership from land ownership, is transferable and inheritable when registered for a fixed term, and is well-suited for buyers who are constructing on leased or spouse-owned land. A usufruct (Sections 1417–1428) grants the right to possess, use, and derive profit from another's property — but you do not own the building. It is non-transferable and non-inheritable (it terminates upon the usufructuary's death), and can be granted for up to 30 years or for life. Usufruct is most commonly used to protect a foreign spouse's interest in property owned by their Thai partner. The right choice depends on your specific situation: superficies for building ownership; usufruct for lifetime use and spousal protection.