What are the regulations around owning land on a lease contract?
In Thailand, foreigners are not permitted to own land directly, but they can own a house, condominium unit, or other structure. The Thai government offers a solution by giving foreigners a 30-year lease on a plot of land. When a Thai individual or company owns a piece of land, they can lease it to a foreigner, and this lease contract will be registered on the back of the Chanote land title deed.
If a foreigner wants to buy a house with a registered lease contract for the land, they have several options. If they are married to a Thai individual, or are a Thai person themselves, they can transfer the land ownership into the Thai individual’s name and own the house and land freehold.
However, if the buyer is foreign, they have two options: transfer the existing lease contract into their name or cancel the lease and register a new lease contract with the same landowner. This will necessitate a small administrative fee to register the new lease, or a small tax to cancel an existing lease.
The landowner typically levies a fee of 100-200,000 THB to transfer the lease agreement to the buyer or cancel an existing lease and register a new 30-year lease at the land office. This amount is due to the potential tax burdens for the landowner and administrative fees at the land office and is usually shared equally between the buyer and the seller.
In the event of a registered lease agreement, prospective buyers and sellers should be aware that there is a mandatory 30-day waiting period before a property transfer can occur. This could be inconvenient if either party is pressed for time.
If a buyer collaborates with a real estate agent to buy a property, the agent should inform all parties of the step-by-step purchase process and the general timeline. This will prevent surprising incidents or unforeseen delays. The agent should also assist in calculating the estimated taxes and transfer fees for the property, although the buyer or seller’s attorney should verify this data.