Country Article / Postcards

How to Buy Thailand

Date: 06/10/2005

Dear International Living Reader,

I leave today on a three-week trip to investigate the real estate markets of Southeast Asia. I'll have a full report for you when I return. Meantime here's some background on Thailand, an expat favorite.

In Thailand you'll pay no property tax, you'll pay no capital gains tax (although there is an income tax on property, whether it's paid by the buyer or seller is part of the negotiation). You'll arrive at good airports and drive on decent roads. Plus, in Thailand, you can buy a big apartment on an island with ocean view for less than $200,000.

Thai law prohibits foreigners from owning land...but several legal ways (not loopholes) exist for you to purchase real estate in Thailand.

Buy a condominium: The easiest way to own real estate in Thailand is to purchase a condominium (in an approved condominium complex). The only restriction is that the percentage of units sold to foreigners cannot exceed 49% of the total number of units in the condominium block, and that the funds used to buy the condominium have been remitted from abroad.

Nominee with lease and option to buy: You engage a Thai nominee to purchase the property (with your funds) and have a lease registered on the property. The lease is a legally binding document registered at the land office. The initial term is usually 30 years, with two more 30-year terms declared as paid-in-advance. Incorporated into the agreement is an option allowing you to purchase the land outright, should the law change and permit foreigners to own land in Thailand.

Usufruct interest: This type of agreement grants you temporary ownership rights on the property. In practice, a usufruct is limited to a 30-year maximum period, but can be successively renewed. The usufruct can be sold or transferred, but it expires upon the death of the holder, so cannot be inherited.

Limited liability company: A Thai company owns the property. You own 39% of the company's shares (the remaining shares must be Thai owned). With legitimate changes to the Articles of Association, you can become the only director of the company, and the only officer of the company who can bind the company in any contractual dealings.

I'll tell you more soon. Watch this space.

Lief Simon
Real Estate Editor, International Living

Editor's note:International Living's first-ever Thailand Tour is scheduled for September 9-16. You'll meet elephants and hill-tribes...explore golden temples and white-sand beaches...learn how best to live, invest, and shop (you may even decide to set yourself up as an import-export entrepreneur) in this astonishingly affordable Land of Smiles. For full details, see: http://www.agoraimages.com/promos/thailand.