Property and Land Information

With the exception of Condos only Thai people have the right to own land in Thailand. Having said that there are a number of methods people use when looking to invest. The most common option is a 30-year lease which is registered at the land office.

Another option is setting up a Thai company and then the company can buy the land. There are pros and cons to both methods so it’s always advisable to consult a real estate lawyer to see what works best for you.

Currently the maximum length for a registered lease in Thailand is 30 years. There are some people who will offer to include a 30-year extension in the contract but legally there is no way to enforce this. At the end of the initial 30 years both parties would have to agree to a new 30 year term.

When you register a lease at the land office there is a 1.1% fee for the total value of the rental period. If for example you were renting for 5,000 baht per month and the lease was for 30 years that would be 1.8 million baht. The fee to register would then be 1.1% of that which is 19,800 baht.

While the property owner retains the right to sell the land or house despite an existing lease, the new buyer is legally obligated to honor the terms of that lease. However, in practice, few buyers are inclined to purchase property encumbered by a lease agreement.

There are a number of title deeds in Thailand but these are the main ones:

1. Chanote (Nor Sor 4) – this is the highest title deed. It grants the owner full rights to the property. This land is accurately surveyed using GPS, with clear boundary markers, and can be freely bought, sold, rented, or mortgaged.
2. Nor Sor 3 Gor – Like Chanote, the boundaries of the land have been measured and defined in relation to the neighboring land. The land parcel points have been set using an aerial survey. This land can be freely bought, sold, rented or mortgaged
3. Nor Sor 3 Khor – This land has been surveyed but is issued in an are with no parcel points. Same as the above 2 titles there are no restrictions for the use of the land, apart from the zoning rules for the area.
4. Nor Sor 3 – This document shows a persons right to possess a certain plot of land but the borders must be confirmed with the neighbors. There are no parcel points or official markers showing the boundaries. When selling this type of land, it must be publicly posted for 30 days before it can be sold.

There are a few other land titles, but only these offer true ownership rights, as opposed to usage or agricultural rights.

Yes, it’s possible to buy a house separate from the land the house is on. When doing this notice of the sale needs to be posted publicly for 30 days prior to the transfer.

You would still need to have a system in place for the land such as a 30-year lease.

At the end of the 30 years you would have to negotiate with the owner about what happens to the house.

When purchasing land in Thailand, the following fees will apply at the land office:

1. Transfer Fee – 2% of the appraised property value
2. Stamp Duty – 0.5% of the registered value
3. Withholding Tax:
   • For companies: 1% of the higher amount between the registered sale value or the appraised value
   • For private sellers: calculated progressively based on the appraised value of the property
4. Business Tax – 3.3% of the higher amount between the registered sale value or the appraised value
   Note: Business tax applies when a company sells the land or when an individual sells it within five years of purchase.

Responsibility for these fees should be negotiated between the buyer and seller as part of the overall purchase agreement.

There is no strict rule regarding who covers which costs; it is typically a matter of negotiation. To simplify matters, buyers and sellers often agree to split the fees evenly, with the exception of ‘Business Tax,’ which is almost always the seller’s responsibility.

However, if a more detailed breakdown is desired, the following division is commonly suggested:

• Specific Business Tax: Seller’s responsibility
• Stamp Duty: Seller’s responsibility
• Transfer Fees: Buyer’s responsibility
• Withholding Tax: Seller’s responsibility

The government-assessed value of a property, known as the appraised value, is often significantly lower than the actual sale price or market value. These appraised valuations are determined by the Treasury Department and the Land Department and are updated every four years. In practice, when selling a property in Thailand, sellers typically prefer to declare a price close to the appraised value to reduce their personal income and transfer taxes. While undervaluing the sale price is a known practice in Thailand, it is illegal. By law, parties must declare the true sale price when registering the transaction at the Land Department.

If the purchaser is a company, for accounting purposes, the company’s financial records should reflect the actual purchase price as stated in the sale and purchase contract, separate from the land office sale agreement. These records will eventually be audited, and the company’s tax return will be based on them. Declaring a lower price poses the risk that the discrepancy will be discovered later when the Revenue Department compares the official land office documents with the company’s financial accounts. In such cases, the situation would need to be corrected, and a significant fine could be imposed

If you’ve lived here for a while and have a Thai wife or partner, you may feel that a lawyer is unnecessary, as the land transfer process at the land office is relatively straightforward. However, complications can arise, and having a lawyer to draft contracts and conduct due diligence on the land can save you significant trouble down the line. If you’re considering purchasing land through a Thai company, engaging a competent lawyer is strongly advised.

Ultimately, the choice of lawyer is a personal decision. Over the years, many of our customers have worked with different lawyers, and we’re happy to share their contact information with you. This allows you to reach out to a few and find one that suits both your preferences and budget

Pai is made up of several villages, each with its own planning office, and the area is divided into various zones, making this a complex question to answer. In general, land outside town and village centers is zoned for ‘Rural and Agricultural’ use, which imposes restrictions on the percentage of land that can be developed for residential or commercial purposes, as well as limits on building size and height.

Once you’ve found a piece of land you’re interested in, your lawyer can conduct these checks as part of their due diligence process.

No, in Thailand, agents work on a commission based on a percentage of the final sale price, which is paid by the seller. As a buyer, you are not responsible for any payment to the agent.