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Land Ownership
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Land ownership within Thailand is governed by the Land Code BE 2497 (1954), the Civil and Commercial Code, Land Reform for Agriculture Act BE 2518 (1975) and the regulations set forth by the Ministry of the Interior.
The land code provides that Foreigners may acquire land by under the provisions of a treaty between Thailand and other Foreign Countries. This is known as the right to own immovable properties and is subject to provisions contained within the Treaty. The land may be used for religious purposes. |
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For example, a Foreigner may acquire land for residential or commercial industry, agriculture, burial or for public charity with Ministerial permission.
Non-Thai individuals and Companies, by virtue of the provisions laid out in the Treaty, can own land but currently Government policy does not ratify such ownership. Foreigners may now own up to one rai (1600 square meters) of land for residential use. But this also is still subject to ongoing Ministerial ratification and conditions being met. Exceptions are made for Businesses with Board Of Investment (BOI) privileges, oil concessions (under the petroleum act) and Companies located on land allocated to the development of the business in question.
It is possible for a Company, with non-thai shareholders, to own land if the Company is 51% Thai owned. However, in recent years the Government has identified large scale land purchases by Thai owned Companies which have been under the control of foreigners. As such, any Company with more than 40% foreign ownership that purchases land is put under scrutiny and investigated by the Central Land Office to ensure that the acquisition is lawful.
Penalties
If any unlawful acts are found in the purchase of land, a Bt20,000 fine and up to two years custodial sentence, or both, is imposed on the Thai facilitator and the Foreign individual or Director of the Company.
Foreign Ownership Of Condominiums
Foreigners may own a Condominium if the overall foreigners ownership of the building is less than 49%. There are exceptions to this regulation. For more information please contact one of our friendly staff.
Taking certain exclusions into account relating to persons with residential status and Companies meeting specific conditions the Condominiums Act BE 2535(1992) specifies that a non-thai individual or juristic person wishing to purchase a Condominium must remit foreign currency into the Kingdom or withdraw baht from his/her non-resident account in an amount not less than the Condominium cost. Proof of these remittances must be available to the Land Department at the time of registration of ownership transfer. Owner's should also note that these remittances may be required for the future sale of the Condominium.
Alternatives For Land Ownership
With the restrictions imposed on outright ownership of land by foreigners, many employ alternatives for land or building tenure.
between Thai nationals and Foreigners
Leases
A lease allows the use of the land and or a building for a maximum of thirty years. However, any lease longer than three (3) years must be registered to be valid. Fees for registration and stamp duty are charged based on a percentage of the whole term lease value. The original registered lease remains in full force and effect with respect to the property, even if there is a change in ownership. Contractually, renewals can not be registered and are ineffective against the purchaser of the property.
The lessee can only use the property for the use stated in the lease and may not sub-lease, sell or transfer interest, modify or improve the property without the lessors' permission.
Usufruct interest gives temporary beneficial ownership rights for what is derived from the land. This can be crops, rock gemstones, water etc. However, this does not give ownership of the land itself. Under normal circumstances, a Usufruct lease is limited to a thirty year period, and as with leases is renewable. In contrast to a lease, the usufruct lease can be sold or transferred, although it expires on the death of the holder. There is no inheritance facility available and any use of the land is allowed, excepting destruction, without seeking the lessors' permission.
The Usufructuary is responsible for routine maintenance of the land and must insure the property for the benefit of the owner. If the property is destroyed, the Usufruct expires, however, the Usufruct will revive to the extent of any restoration of the land by the owner. Upon the return of the land to the owner it must be substantially in the original condition.
Superficies are similar to Usufruct but gives a measure of security to the title holder. A Superficiary has rights to own whatever is on, or under, the land. Building structures, plantations etc, but not the land itself. A renewable thirty (30) year maximum term applies. Unlike Usufructs, Superficies can be inherited and are not extinguished by the destruction of the Superfice. Whatever remains on the land maybe sold, with the owner having first right of purchase, at the prevailing market rate.
As with Usufruct, the land must be returned to the owner in its original condition at the expiry of the lease term.
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