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Buying Land in Thailand
Buying land in Thailand is full of dangers. Horror stories
abound, including foreigners 'viewing' nice plots of land, but then finding that
the land they just paid for is NOT that piece of land but another (less
desirable) plot. Various other 'scams' are commonplace so be careful. always
check the papers when considering buying land. If the land has proper title (Chanott
or Nor Sor Sam Kor) this will give reference numbers for markers at various
points on the land. There should be a concrete post (often buried) in the ground
at the corresponding point and it should have the same reference numbers on it.
If the land does not have full title (Chanott or Nor Sor Sam Kor) then DON'T BUY
IT. Also if the markers are different then on the paper then DON'T BUY IT.
Don’t buy ‘Sor Kor Nung’, ‘Tor Bor Tor Hoc’, or ‘Tor Bor Tor
Ha’ they are essentially squatter’s rights registered at the district office for
a small fee. Unlike the ‘Chanott’ and the ‘Nor Sor Sam Kor’, they cannot legally
be sold, nor can you build on the land, also stay away from ‘Sor Bor Kor’. These
are true title deeds, accurately surveyed and pegged (like a Chanott). They can
be mortgaged and developed. But the big but is they cannot be leased, sold or
transferred so don’t buy it. Remember buy only ‘Chanott’ or ‘Nor Sor Sam Kor’.
There are a number of options that are available for a foreigner wanting to
acquire property. House in Chiang Mai have facilitated each of these options for
different foreigners in the past and our legal advisors are well versed in the
procedures and can plan and implement a scheme to suit your circumstances.
Land leases
This option has become much more popular, so most foreigners
who “own” land and houses go for a leasehold agreement of typically 30 years,
with two prepaid 30-year renewals. The lease will include clauses that
automatically allow freehold ownership if the laws of foreign ownership change
in the future, and the right to sell and/or transfer the property.
This gives you 90 years with strong backup, making it
effectively ownership.
Just to complicate things a little, while you can only lease
land, all the buildings – either on the land when it was purchased, or improved
or built by you after purchasing the land, are yours freehold. Technically this
means that once the lease expires, the owner of the land must purchase the
building(s) at an independently and legally valued price, or negotiate another
lease period.
The structure of a lease agreement needs to be watertight. But
because this has become the preferred way of holding land in Thailand for
foreigners, this type of lease agreement has become more or less a template,
with add-ons to suit individual buyer’s needs.
But don’t draw it up yourself. Get the advice of a lawyer
versed in such things. And don’t sign anything or hand over any money until you
fully understand and are happy with what’s written on the lease agreement.
Thai partner
If you are married with a Thai, then the most simple solution
is to let her buy House and Land.
For the partner to buy land, proof is required that the money
used to purchase the land is legally the Thai partner’s, with no foreign claim
to it. Get divorced or separated and the Thai “ex” gets to keep it all. Even if
the Thai partner dies, the foreigner has no claim to the land and there is
nothing to stop the relatives from moving in (if they haven’t already) and
booting you out.
You want a house to call your own without the prospect of your
partner’s relatives circling hungrily. So think twice before you choose this
option .
Company owns the Land
Although foreigners cannot own land, legally formed companies
with foreign shareholders can do so. Company law is complicated here (isn't it
everywhere?), but in general a Thai company cannot have more than 49% of its
shares owned by foreigners, and if the company is going to own property then
this reduces to 39%. If the company has been set up by a competent lawyer then
you can still have control of the company despite the fact that you will own
less than 50% of the shares.
The Thai authorities have now taken steps to close Companies
only for the purpose of acquiring property, any company with foreign
shareholders that tries to register the purchase of land is now subject to a
full investigation to ensure that the company has not been set up to enable
foreigners to acquire land. So tread carefully if you intend forming a company
purely as a vehicle to own property.
If you have any question regarding buying a House then please
let us know, and we will do our best to answer your question
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