Since the law regarding the foreign ownership of land in Thailand is fairly straightforward – foreign individuals and foreign companies are not allowed to own any direct interest in land unless an exception to the general rule applies. Many people (or companies for that matter – both are permitted to hold title to condominium units) may want to take advantage.
It is generally considered to be the most significant of such exceptions: condominium ownership. What follows is a brief overview of some of the most common legal and other considerations to be taken into account when buying a condominium in Thailand.
What are the most significant conditions on foreign ownership of condominiums?
Foreign individuals and foreign companies seeking the purchase of condominiums are generally required to provide 100% of the purchase price from an offshore source. The significance of this is that it entirely precludes foreign purchasers from local financing. Some banks, most notably Bangkok Bank (Singapore Branch) and UOB were prepared, in the recent past, to provide offshore financing to suitably qualified applicants, but this is no longer the case as of the time of writing.
Upon the date scheduled for the transfer of title, it is usual for the seller and the purchaser to meet at the local (to the condominium in question) Land Office. The presiding official will require the production of evidence of the purchase price from a source offshore, issued by the purchaser’s (Thai) bank. This document is known as a Foreign Exchange Certificate, and generally takes around 2 days to be issued. Note that without this document, the official will not approve the transfer of title. It should also be noted that any currency exchange transactions need to be performed in Thailand, or will not qualify for purchase. Foreign residents holding a Permanent Resident Certificate are exempt from any offshore funds requirement.
The other significant consideration for foreign purchasers is the ratio of foreign ownership in a condominium building. The Land Office will also require the seller of the property to produce a letter from the building’s management company (frequently know as the Juristic Person) stating the ratio of foreign ownership in the building does (or will, in the case of developments) not exceed 49 percent. The rationale for this rule is that since the Juristic Person owns the land upon which the building stands, a majority of foreign ownership would effectively raise a conflict with existing laws concerning foreign ownership of land. There are some buildings exempt from the rule, most notably in Bangkok. The practical reality of the ratio issue is that it does not, generally speaking, cause a significant amount of problems, since it is fairly unusual for a building to exceed 49% foreign ownership.