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Real estate news in Thailand

Thailand has updated its land ownership rules, making it easier for foreigners to buy property.

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Thailand has historically enforced stringent regulations on foreign ownership of land. Traditionally, foreigners were prohibited from owning land directly. However, they could own buildings or structures on land and lease land for extended periods. Foreigners could also buy land through a Thai company, as long as the company was predominantly Thai-owned. Furthermore, the Land Code specified that foreigners could buy land if they made a significant investment in the country, typically in a business or government-approved sector.

The Land Department of Thailand has recently updated its criteria for allowing foreign ownership of land in the country. These changes aim to clarify and expand the conditions under which foreigners can buy land and property.

Inheritance rights for foreigners

Under the new rules, foreign nationals who are legal heirs of other foreign nationals permitted to own land can inherit the land holdings. However, this inheritance must adhere to existing land-holding laws and specific criteria. For example, heirs can inherit no more than 1 rai (0.160 hectares) of land for industrial use or up to 10 rai (1.60 hectares) of land for agricultural purposes. It’s important that the use of the land aligns with the original permission granted to the relatives from whom the land is inherited.

Buying land through investment

The updated criteria also clarify that according to Article 96 of the Land Code, foreigners are allowed to purchase up to 1 rai (0.160 hectares) of land for residential purposes in Thailand if they invest a minimum of ฿ 40 million ($1.09 million) in the country. This investment must be considered beneficial to Thailand’s economy and society, or must align with the types of businesses encouraged by the Board of Investment. Furthermore, the investment must be maintained for a minimum of three years, and the residential property acquired must be situated in Bangkok, Pattaya, or other specified municipalities.

Land transfer regulations

Foreigners can also receive land transfers in accordance with other laws, such as the Investment Promotion Act of 1977. However, the Land Department warns that Thai nationals acting as nominees to hold land for foreigners could face severe penalties, including a maximum jail term of three years, a maximum fine of ฿ 6,000 ($163), or both. Foreigners who acquire land unlawfully face a maximum daily fine of ฿ 20,000 ($544) and/or a maximum jail term of two years.

Comparing new and old rules

The updated criteria provide more explicit pathways for foreigners to own land through inheritance and significant investment compared to previous rules. Previously, the processes and conditions were less defined, creating uncertainties for potential foreign landowners. The new rules clarify these conditions, offering a clearer framework for legal land ownership by foreigners.

What do these new rules look like in practice? Consider a foreign investor named John, who is interested in buying property in Thailand. According to the new rules, if John invests at least ฿ 40 million ($1.09 million) in a business that benefits Thailand’s economy and is approved by the Board of Investment, he can purchase up to 1 rai of land for building a residence. This land must be located in designated areas such as Bangkok or Pattaya. John’s investment must be maintained for at least three years to comply with the regulations. This new rule provides a clear path for John to own property legally, compared to the previous, more ambiguous guidelines.

Benefits for property investors and business owners

The revised regulations will greatly benefit individuals in the tourism and real estate industries, such as hotels, restaurants, and property owners who serve tourists. By making it easier for foreign investors to own land in Thailand, the country can draw in more international investment, which will help boost the local economy and improve tourism infrastructure. Due to greater demand from foreign investors, property values in specific areas like Bangkok and Pattaya may increase.

New regulations make it easier and more secure for foreign investors to own property in Thailand. By meeting investment criteria and choosing the right locations, investors can own property and contribute to the local economy. This offers an attractive opportunity for those interested in investing in a growing market with significant tourist appeal.

Written by Matt Timmermans

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