Foreign Ownership of Real Estate
Due to the 1997 economic crisis, caused by a real estate glut in Bangkok's office, condo, and housing estate markets, the IMF applied pressure to relax laws restricting foreign ownership of property. This was an effort to bring in foreign investment, particularly to the nonperforming real estate investments which were causing the liquidity crisis.
The , which would have also helped many powerful Thai individuals who own real estate but are burdened with debts due to not being able to sell it to other Thais after expensively developing it. As of the time of writing this article (April 2000), the most far reaching reforms regarding foreign ownership of property that were hammered out during the IMF presence were still pending in Parliament and not sure to pass, and those aren't really very far reaching anyway. They are politically unpopular. The main details are discussed a few paragraphs below. However, they're not necessary in order to have and control property.
The present situation is likely to continue as a natural state of political affairs as long as foreigners are much richer and have far more buying power than Thais. The argument is that if the property market were opened wide to foreigners, then the prices would skyrocket out of the reach of the vast majority of indigenous Thais, and foreigners would take over too much of Thailand whereby the Thais would lose significant sovereignty and cultural integrity, instead being exploited in colonialist fashion.
Foreigners in the press commonly argue that Thais are free to buy property in the U.S. and other countries, and thus the reverse should be allowed as well, instead of continuing "outdated anti-colonial" and "xenophobic" policies. The same argument could be made regarding travel visas, whereby any poor Thai prostitute could skip going down to the US Embassy for a visa rejection and instead just take a plane flight to the U.S. and get a visa-upon-arrival at the U.S. airport, just like Americans can come to Thailand without a visa. The reality is that the U.S. would soon become about 10% Thai in the form of illegal workers, who would in turn far outnumber immigration officials and police forces after their one month visa-upon-arrival expired. So major relaxation of laws regarding foreign ownership of property will probably occur around the time that Thais are given "fair treatment" as regards travel visas. (I've never seen this counterargument acknowledged when foreigners and their government representatives argue for greater property ownership rights in Thailand, of course.)
In my writings, I must first start with a disclaimer: I am not a lawyer, all Thai law is in the Thai language, I cannot read Thai law, I haven't tried to read Thai law to date, I am not an authorized translator anyway, and I cannot guarantee the accuracy of the following. Use at your own risk.
These are general problems that people run into when dealing in any country whose language they cannot read. (At least the Thai language is phonetic, not hieroglyphic.) Even in one's own country, people usually depend upon their lawyers rather than read the law themself. The problem in Thailand is dealing with the nationalistic laws.
There are some great deals on inexpensive and abandoned luxury houses out here, but you'd better know the laws and procedures.
In short, here is a summary of the current status of foreign real estate property ownership in Thailand, as I've perceived from my research:
* A foreigner can own a condominum as long as less than 40% of the condos or apartments in the building are owned by foreigners. (This is an old law.)
* A company can own property such as land and a house (and hence the foreigner can buy land and a house via their company) as long as no one foreigner owns more that 39% of the company (recently amended from 33%) and total foreign ownership of the company does not exceed 49%.
* The Thai wife of a foreigner can own property (a recently changed legal status due to gender equality in the new 1997 constitution revision), in her name only. This is fine as long as you don't have marital problems. (The same, of course, goes for a Thai husband, but the law was changed recently for Thai wives due to the new constitution guaranteeing equal rights.)
* A foreigner can lease land for 30 years, with an option for another 30 years, according to articles in the press and as confirmed by every lawyer I've asked. (If you live longer than 2x30 years, consider yourself lucky in another regard.) This is referred to as the 2x30 ("two times 30") option.
The 2x30 option has been mentioned in "this is how I did it" circles, but you are advised to check with a lawyer, and ask about what proposed laws were actually passed in Parliament over the past few years. After the 1997 economic crisis and IMF intervention, plans were written up to amend the property laws so that a foreigner could lease in their individual name up to 1 rai of land for up to 30 years (1 rai = 1600 square meters or about a 40 meter x 40 meter plot, or 1 acre = 2.5 rai), on which the foreigner could build a residential property. Before the foreigner could do this, the foreigner must deposit 10 million baht of hard currency from overseas into a bank in Thailand. This amendment to the property law had been pending in parliament for a long time, but I didn't keep up with it. Lawyers say it was passed, but I didn't read that myself in the newspapers, not that I never miss a day.
However, I did catch something in apparent reference to that "10 million baht of hard currency", as stated by The Nation in March, 2001:
Opening the door
AUTHORITIES are leaning towards dropping a requirement that foreigners wanting to purchase property in Thailand have to bring in a certain amount of foreign currency and invest it in the domestic market.
The move would be part of the government's short-term economic stimulus package to help the export, tourism and real estate industries.
The Finance Ministry, National Housing Authority and Government Housing Bank agreed at a meeting yesterday to submit the proposal to the Finance Ministry on Tuesday, an official from the Finance Ministry said.
Many foreigners have "secured" land and houses in Thailand, in addition to condominiums, in various ways and I haven't heard of any horror stories to date from those who followed the procedures mentioned here. The only horror stories I have heard are those where the foreigner put everything into their wife's name with no lease or any other contract, and were subsequently kicked out. I've heard lots of those horror stories.
Notably, when the registered Thai wife of a foreigner buys property, she must state that the money is hers, not her husband's. For example, one farang guy said that the provincial official asked his wife this, and when she said it was her husband's money, he shook his head and informed her that she could not purchase and register the property under the law, in an explanatory way. Then he asked her again, in which case she changed her mind and said it was her money, and everyone then smiled and the transaction was allowed to go forward to completion.
I should note that I've seen illegal property transactions on the books for years, which continued to be honored simply because nobody challenged the transaction. Thai society has been easygoing to date, in general, with local officials usually deciding what's OK or fair or whatever. I've seen some tricks pulled by lawyers and real estate agents which other lawyers have said are illegal, usually in regard to matrimonial arrangements other than those mentioned here (i.e., not a simple and clear lease).
However, I've occasionally seen some transactions challenged years afterwards by someone on a mission, nearly all these unpleasant challenges based on matrimonial technicalities in the pre-1997-constitution era. Since I'm not a lawyer and haven't seen the legal text in Thai myself (with my limited Thai reading abilities) regarding foreigners owning property, I can only recommend that you find a good Thai lawyer. I can recommend some Thai lawyers to rely on if you don't have any good referrals. You can read the text yourself and interpret it yourself, all of it, back to the Constitution. Otherwise, you can believe the lawyers, the market, and how quiet it is as regards property invalidations.