Dear Koh Phangan Realty, I want to buy some land in amazing Koh Phangan, where do I begin?
How do I buy land in Thailand? Good question, to buy land in Thailand I could say just come and see us here at Koh Phangan Realty and we’ll take care of everything for you! Well, I did just say that, and it would be true too, but I guess you want to know more of the mechanics of the whole process…if not, then just call me on +66 844408815 (I have Line and Whatsapp too) but I digress…onto the juicy bit…
If you would just like to know the purchase process in summary without all the details here you go…
- Find your perfect plot of Koh Phangan land
- Check the land borders to the land deed map and visit a few times at different times of the day
- Once you are happy that the plot of land is as you believe it to be, proceed to a land title deed check via a reliable lawyer or similar.
- If the land is Nor Sor Sam Gor title deed we recommend having the Land Office surveyors come and confirm the actual location of the land.
- Assuming the land checks out OK have your agent and lawyer discuss any payment terms etc with the seller
- Create draft contracts and review
- Once contracts are agreed and signed you can deposit on the land in order for it to be removed from the market and stop it being sold to another.
- Complete payment, according to the payment terms set out in the contract, and then transfer the property to yourself or your vessel.
- The whole process can take as little as a week depending on circumstances.
For a more detailed explanation of how to buy land in Koh Phangan (or Thailand) please read on…
I have heard that as a foreigner I can’t own land in Thailand, is this true?
Well the truth of the matter, and we like to tell the truth here at Koh Phangan Realty, is no…and yes. The law of Thailand prohibits foreign individuals from owning land in the Kingdom of Thailand, the Act which deals with this is the Thai Land Code Act. Actually, it says that foreigners can own land by a treaty, but there has never been such a treaty in place, so in other words no.
So that’s the no, what about the yes?
Well, I was getting to that. The yes, a foreigner can own land in Thailand is two-pronged. If we are talking legal ownership, as in the eyes of the law, freehold, then there is only one way. If we are being a little more flexible then we can also include rental or leasing of land. Both options can be used to hold land for the foreigner (farang) here in Thailand with a difference in the duration of each system.
The simplest way for a foreigner to ‘own’ land in Thailand
How do I buy land in Thailand?… The simplest way to ‘own’ land in Thailand, or make use of the land anyway, as a foreigner, is via a leasehold or land rental agreement. A leasehold on a plot of land in Thailand is 100% legal. Great, I hear you say, so we can do that, why doesn’t everyone just do that and where has the confusion come from?
Well, there’s a drawback to having a leasehold on your dream plot of land, which you have made your dream property upon. The problem with a Thai leasehold arrangement is that a land lease in Thailand is limited to 30 years in duration. That’s not just for the likes of you or me, that’s for everyone, Thai’s and foreigners alike. It’s the statutory law of the land. So you can see that the lease-hold arrangement is not for everyone. If you are young or are hoping to leave your hard-earned asset to your offspring then it won’t be appealing to go this route. So what else then? I hear you saying.
Ownership of land in Thailand via a Thai registered company
This method of land ownership to buy land in Thailand really does give outright ownership of the land of choice but as an asset of the Thai company that you control. It could be argued that you, the company director at this stage, do not actually own the land, but the company does but that’s just semantics. As the sole, or joint director of the company with the person of your choice, you have complete control of the company and its assets.
The director may sell the company assets (land, house, car, etc.) as and when they see fit and they may also change the shareholders of the company quickly and easily too.
It should be noted, however, that the Thai authorities frown upon the set up of a Thai company just to buy land in Thailand and thus a house. What they do not mind is the creation of a company in order to make a business, be it house rental, sales, etc. Business like this is very good from an economic point of view for the host country. FDI, or Foreign Direct Investment, is a goal of many of the economies of the world as it brings wealth into a country and makes the next year’s figures, for whoever is running the country at that time, look very good.
OK, Got it, All of that sounds great but what does Koh Phangan Realty Co., Ltd. recommend?
Well, we feel that it really depends on what you are looking to do. As with most choices, there are pros and cons to each choice to buy land in Thailand…
Renting/leasing land in Thailand – benefits
- Often a lower outlay at the beginning – deals may be negotiated for yearly, bi-yearly, five-yearly payment of rent depending on the parties involved.
- No need to incorporate your own company to gain the land.
- Seed money can be used to spend on development/construction rather than land purchase.
Renting/leasing land in Thailand – drawbacks
- Lower, and a reducing with time, resale value.
- No land asset to use for collateral if needed.
- A company is needed to do business in Thailand anyway, and most probably needed to gain a long term (non Immigrant) visa.
- After 30 years you will either –
- relinquish rights to your development on the leased land
- Have to renegotiate and re-sign contracts, if at all possible.