Thailand is a highly populated country, with an approximate density of 130 people per square kilometre. For comparison, there are 33 people per square kilometre in the US.
The government of Thailand strictly regulates the real estate market, being perfectly aware of how valuable the land is. It is not forbidden for foreigners to buy land in Thailand, but American citizens often face obstacles. Read on to find out more about how you can become a land owner in Thailand if you are an American.
Land Law Regulations in Thailand
As of 2023, the right of a foreign national to own land in Thailand is limited by Section 96 of the Land Code. According to this rule, foreigners can buy land in Thailand if they invest over 40 million THB ($1,097,695) in the local economy. The business receiving the investment must be economically and socially important to the country. The investment must also be approved by the Thailand Board of Investment and investors must support their projects for at least three years.
However, even if you meet all the requirements listed above, you can only buy land in the Metropolitan Area of Bangkok, Pattaya, or within a municipal or residential area listed in the Urban Planning Law, and foreigners cannot own more than 1600 square metres of land. It can only be for residential use, and the sale must be approved by the relevant minister.
If the Thai authorities discover that the land has not been used for two years since the date of registration, the Ministry has the right to dispose of it at their discretion.
The Board of Investment can allow exemptions for foreign companies operating in Thailand and wishing to own land. In this case, they are required to make significant investments over a long period of time.
Restrictions on the Size of the Plot of Land
Thai laws set the following size limitations for plots owned by foreigners, including US citizens:
- 1600 square metres for a plot where one plans to live, trade, conduct religious services, or bury their family.
- 16,000 square metres for an industrial or agricultural plot.
- 8000 square metres for charity purposes.
Main Ways to Buy Land in Thailand As an American
There are several ways of buying land in Thailand directly or with someone's help.
- Heritage. As a foreign national, you can inherit plots of lands in Thailand.
- Local business. Unfortunately, this method has not worked since 2006. In the past, foreigners ignored Thai laws and bought out a majority interest in a local company, using it to register their newly acquired land. In theory, this method can still work, but in reality the local authorities do not welcome property deals where one of the parties is a company with foreign capital. They thoroughly check if a foreign national is using the company solely as a nominee shareholder.
- Real estate construction. In Thailand, you can transfer ownership rights for the property without transferring the rights for the land it is built on. This means it is quite possible to sign a lease or a usufruct agreement (scroll down for more details) for the land if you comply with all the requirements to get approval for construction. In this case, the real owner of the property is not important.
Chiang Mai, Thailand. Photo: Peter Borter (Unsplash)
Unlike owning land, Thai laws do not pose any additional restrictions on foreigners who want to lease the land in the country. The key thing to remember is that owning and leasing a plot of land are two completely different things.
First of all, foreigners can lease land in Thailand for no more than 30 years. If you violate the terms of the contract, it can be terminated prematurely. Secondly, the leased land cannot be mortgaged or inherited by someone else. However, you can rent it out to another person or make a preliminary agreement on that with the owner. Do not forget to include this section in your contract. If you want to pass the leasing rights to a third party, you must get the owner's approval first and then register the agreement at the Thailand Land Office.
The lease contract can be prolonged if both parties agree to it. It cannot be extended automatically, even if the owner gave their consent beforehand.
Usufruct is another way of owning the land without actually having ownership rights on it. Usufruct allows you to use someone else's land as long as you live. Usufruct is especially popular with international marriages where one of the spouses is a Thai citizen. Thus, they can ensure the spouse will not lose the property if the other spouse dies.
Usufruct, as a form of owning land, does not only apply to families. Anyone can apply for it. However, it must be registered with the Thailand Land Office.
It is important to note that usufruct is an encumbrance on the property. If the property owner decides to sell it to another person, the buyer will have to deal with the foreign national having usufruct rights on the land. In this case, it is the foreigner who has a temporary but exclusive right to own, use, and manage the land.
However, there are also some restrictions. For instance, foreigners cannot sell the usufruct land, pass it on, or dispose of it in any other way. At the same time, it is the responsibility of the foreign national to maintain the property and take care of any damage caused to it on their behalf.
Sukhumvit Road, Thailand. Photo: Andreas Brücker (Unsplash)
In a Nutshell
Foreign nationals can legally buy land in Thailand but a number of obstacles make this process almost impossible.
The best way to own a plot is to get a long-term lease on it, up to 30 years, or sign a lifetime usufruct agreement. Another way is to have ownership rights for the property without owning the land it stands on. American citizens can also construct a building in Thailand.
It is not a good idea to use one-day local companies to get ownership rights for the land. The Thai government is actively fighting this method of becoming a land owner, which was popular among foreign nationals in the past.
Cover photo: tawatchai07 (freepik)