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Real Estate in Thailand

Since Thai law generally prohibits the ownership of land by foreigners, it used to be the case that the Land Office, as a matter of policy, would prohibit Thai nationals married to foreigners from owning any land in Thailand.

The rationale behind such a provision was that foreigners may be actually exercising indirect control, or effective ownership of land through their Thai spouse, a right reserved entirely for Thai nationals. This provision, regarded as excessively onerous by many, was eventually repealed in 1999 by a ministerial regulation giving Thai nationals married to foreigners the legal right to own land. However, quite recently it was widely reported that the Director of the Land Department issued a statement to the effect that land purchases by Thai nationals using money from foreign spouses was illegal and could result in a possible revocation of title to the land. Needless to say, this announcement caused widespread concern and confusion in the foreign community in Thailand.

Is it illegal for a foreigner to give their Thai spouse a cash gift for the purpose of buying land?

With regard to Thai nationals married to foreigners Thai law requires that, before title to the land can be transferred, the couple must jointly execute a standard Letter of Confirmation at the Land Office stating the money used for the purchase is entirely the personal property of the Thai spouse alone.  It is important to note here, the declaration makes a very specific reference to the purchase money being entirely the personal property of the Thai spouse. This distinction is critical because it means such money is excluded from being community property (property acquired by a husband and wife after marriage which would generally be shared equally in the event of death or a divorce) and in this way will consequently exclude the foreign spouse from any rights or claim over any property (i.e. the land) acquired by the use of this money. This principle has its basis in law, since the Thai Civil and Commercial Code states that personal property (amongst other things) consists of:

•    Property acquired by either spouse during marriage by way of a will or a gift
•    Property given by a man to a woman as evidence that the marriage will take place

The law requires only evidence of delivery as sufficient proof of the validity of either cash gifts or property (e.g. a wedding ring, sin sot etc.) given as evidence the marriage will take place.

In view of the above, a convincing argument can be made that it would be a practical impossibility for officials of the Land Office to attempt to distinguish funds given by a foreigner to a Thai spouse as a gift from those given explicitly for the purpose of avoiding the law. In addition, the fact that the Letter of Confirmation serves as an effective waiver to any right or claim whatsoever over the land in question lends additional weight to the contention that the provisions in the Thai Land Code regarding this matter have not been avoided.

Can a foreign spouse loan money to a Thai spouse for the purpose of buying property?

Assuming the absence of a pre-nuptial agreement to the contrary, property acquired during marriage is generally considered community property, and a loan would most probably not be considered the personal property of a spouse. This being the case, a likely interpretation would mean this would be a violation of - at the very least - the spirit of the law and should be avoided.

Is the legality of title of land owned by Thai nationals married to foreigners likely to be questioned by the Land Office as a matter of common practice?