
Comprehensive Real Estate Guides
Navigating the real estate landscape in Thailand requires a clear understanding of its unique laws, market dynamics, and cultural nuances. Our comprehensive guides are designed to equip you with the essential knowledge, whether you're buying your first property, investing, or simply exploring the possibilities.
Key Strategies to Maximize Return from Private Lending
Thorough Due Diligence:
Go beyond surface-level checks. This involves meticulously vetting borrowers' financial health, understanding their business models, and assessing their repayment capacity. For real estate-backed loans, a comprehensive evaluation of the property's value, market demand, and legal status is paramount.
Diversification:
Don't put all your eggs in one basket. Spreading your capital across multiple loans, different borrower profiles, and various property types can mitigate risk and smooth out returns.
Competitive but Realistic Interest Rates:
While the allure of high interest rates is strong, setting them too high can deter reliable borrowers or increase default risk. Research market rates, assess the specific risk profile of each loan, and find a competitive yet sustainable rate that reflects both the risk and the return you seek.
Structured Loan Agreements:
A robust, legally sound loan agreement is your strongest protection. Clearly define terms, repayment schedules, default clauses, and collateral arrangements. Engaging experienced legal counsel specializing in Thai property and lending law is highly recommended.
Proactive Loan Management:
Don't just lend and forget. Regularly monitor loan performance, maintain open communication with borrowers, and be prepared to act swiftly if any issues arise. Early intervention can often prevent minor problems from escalating into major defaults.
Understanding Local Market Nuances: Thailand's real estate and legal landscape has unique characteristics. Familiarize yourself with local regulations, cultural business practices, and economic indicators that can impact loan performance.

Maximizing Returns from Private Lending
in Thailand
Private lending in Thailand presents a compelling opportunity for investors seeking higher returns than traditional avenues. To truly maximize your profits, a strategic approach is essential.
Type 2
Annual Property Tax (Land and Building Tax)
Introduced in 2020, this annual tax replaces the old House and Land Tax and Local Development Tax. It applies to all landowners, building owners, and condominium owners, based on the government's appraised value of the property and its usage.
• Taxable Properties: Land, buildings, and condominiums.
• Liability: Owners, possessors, or users of the property as of January 1st of each year.
• Payment Due: Annually by April.
2.1 : Individual owner (Main residence, Name in House Book)
Appraised Value Threshold (THB) Tax Rate (%)
Up to 50 Million Exempt
50 - 75 Million 0.03%
Over 75 Million 0.05%

2.2 : Other Residential (e.g., Secondary Home, Rented Out)
Appraised Value Threshold (THB) Tax Rate (%)
Up to 50 Million 0.02%
50 - 75 Million 0.03%
75 - 100 Million 0.05%
Over 100 Million 0.10%

2.3 : Agricultural
Appraised Value Threshold (THB) Tax Rate (%)
Up to 75 Million Exempt
75 - 100 Million 0.01%
Over 100 Million Up to 0.10% (Progressive)

2.4 : Commercial/Industrial
Appraised Value Threshold (THB) Tax Rate (%)
Any Value 0.3% - 0.7% (Progressive)

2.5 : Vacant/Unused Land
Appraised Value Threshold (THB) Tax Rate (%)
Any Value 0.3%
(Increases by 0.3% Every 3 years, up to 3%)

***Important Notes***
Appraised Value: The tax is based on the official appraised value set by the Land Department, which may differ from the market value.
Exemptions: Specific exemptions apply, such as for properties used for agricultural purposes (up to certain value thresholds) or for an individual's primary residence (up to 50 Million THB appraised value if the owner's name is in the house registration book).
Penalties: Late payments incur penalties and surcharges.
Seeking Professional Advice: Property tax laws can be complex and are subject to change. It is highly recommended to consult with a qualified Thai real estate lawyer or tax advisor to ensure accurate tax calculations, proper compliance, and to explore any applicable exemptions or tax optimization strategies.
Understanding Property Taxes in Thailand
Type 1
Taxes at the Time of Property Transfer/Sale
These taxes are typically paid at the Land Department on the day of ownership transfer. The exact split between buyer and seller can be negotiated in the Sale and Purchase Agreement (SPA), but there are customary practices.
1.1 Transfer Fee
o Rate: 2% of the government's official appraised value of the property (which is often lower than the market value).
o Responsibility: Commonly split 50/50 between buyer and seller, though this is negotiable.
1.2 Stamp Duty
o Rate: 0.5% of the government's appraised value or the actual sale price, whichever is higher.
o Applicability: Applied if the SBT is not applicable (i.e., property held for more than 5 years or main residence exemption applies).
o Responsibility: Typically borne by the seller.
1.3 Specific Business Tax (SBT)
o Rate: 3.3% (3% + 0.3% municipal tax) of the government's appraised value or the actual sale price, whichever is higher.
o Applicability: Levied if the seller is an individual or company selling a property within 5 years of its acquisition.
o Exemption: If the property has been held for more than 5 years, or if the seller is an individual using it as their principal residence for at least one year (as per house registration book), this tax is usually not applicable.
o Responsibility: Typically borne by the seller. If SBT is paid, Stamp Duty is exempt.
1.4 Withholding Tax
o For Individuals (Seller): Calculated based on a progressive income tax scale applied to the government's appraised value of the property, adjusted for the number of years of ownership. This tax is considered a final tax for individuals and fulfills their income tax obligation from the sale.
o For Companies (Seller): 1% of the registered sale price or the government's appraised value (whichever is higher), treated as a corporate income tax prepayment.
o Responsibility: Paid by the seller. The Land Department will calculate and collect this tax on behalf of the Revenue Department.
Investment Due Diligence Checklist
Phase 1: Legal & Ownership Verification
Title Deed Verification (Chanote):
o Authenticity: Verify the originality and authenticity of the title deed (Chanote is the most secure form of land title).
o Ownership: Confirm the seller's legal identity matches the name(s) on the title deed.
o Encumbrances: Check for any registered mortgages, liens, easements, usufructs, leases, or other registered rights that could affect your ownership or use.
o Restrictions: Identify any transfer restrictions associated with the title deed.
o History: Review the ownership chronology to ensure proper legal transfers in the past.
Seller's Legal Authority:
o Individual: Verify passport, visa, and marital status (spousal consent may be required).
o Company: Review company registration documents, shareholder structure, board resolutions, and memorandum & articles of association to ensure the company is legally able to sell and the signatory has the authority.
Review of Existing Contracts/Agreements:
o Sale and Purchase Agreement (SPA) draft.
o Lease agreements (if applicable).
o Management agreements, rental guarantees, or other relevant contracts.
• Litigation Search: Check for any ongoing or past legal disputes involving the property or the seller that could impact the transaction or future ownership.
• Bankruptcy Search: Verify the seller's bankruptcy status.
Phase 2: Property & Physical Verification
Physical Inspection & Boundaries:
o Conduct a site visit to verify the property's physical condition, boundaries, and ensure it matches the title deed and plans.
o Check for any encroachments from neighboring properties or onto public land.
Building Permits & Compliance:
o Verify valid construction permits for existing structures.
o Ensure the building complies with current building codes, zoning regulations (City Planning Act), and local ordinances.
o Check for environmental regulations affecting the property (e.g., near protected areas, coastlines).
Access to Property:
Confirm legal and practical access to the land via public roads or registered private easements.
Utilities:
Investigate availability and connection processes for essential utilities (water, electricity, waste disposal, internet).
Structural Integrity:
For existing buildings, consider engaging an architect or engineer for a structural survey.
Phase 3: Financial & Tax Implications
Official Appraised Value:
Obtain the government's official appraised value of the property from the Land Department (used for calculating transfer fees and certain taxes).
Outstanding Taxes & Fees:
Verify that all property taxes (Land and Building Tax), common area fees, and utility bills are paid up to date.
Common Area Fees (for Condos):
Review the condominium's financial statements, common fees structure, sinking fund status, and any planned major renovations.
Transaction Costs:
Obtain a clear breakdown of all applicable taxes and fees associated with the transfer of ownership (e.g., transfer fee, stamp duty, specific business tax, withholding tax).
Foreign Exchange Transaction (FET) Requirement:
Understand the requirement for foreigners to remit funds from overseas for condominium purchases.
Phase 4: Additional Considerations (Depending on Property Type)
For Off-Plan/New Developments:
o Developer Reputation: Research the developer's track record, previous projects, and financial stability.
o Project Approvals: Verify all necessary construction and environmental permits for the project are in place.
o Escrow Account: Confirm that payments (especially deposits) go into a secure escrow account as mandated by law for condominium developments.
For Rental Properties:
o Review existing tenancy agreements.
o Assess rental yield potential and market demand.
Understanding Ownership Structure in Thailand
Type 1: Freehold Ownership
Definition:
Grants full, permanent, and absolute ownership rights over a property, including the land it stands on (where applicable). The owner has perpetual rights to sell, transfer, mortgage,
or bequeath the property.
For Foreigners:
o Condominiums: Foreigners can directly own freehold condominium units, provided that the total foreign ownership in that specific condominium building does not exceed 49% of the total saleable floor area. This is the most common and secure way for foreigners to own property in Thailand.
o Land and Houses: Generally, direct freehold ownership of land by foreigners is prohibited under Thai law (Land Code Act B.E. 2497). Exceptions are rare and highly restrictive (e.g., significant investment under BOI promotion).
Key Advantages:
o Permanent ownership and full control.
o Generally higher long-term appreciation potential.
o Easier to sell and transfer.
o Can be inherited by heirs.
Key Disadvantages:
o Limited availability for foreigners
(primarily condominiums).
o Higher initial cost compared to leasehold.

Type 2: Leasehold Ownership
Definition:
Grants the right to use and occupy a property (land or
building) for a specified period, typically up to a maximum of
30 years for residential purposes, as per the Civil and
Commercial Code. The ownership of the property itself
remains with the lessor (landowner/developer).
For Foreigners:
o A popular legal alternative for foreigners to control land or houses, as they cannot directly own land.
o Lease agreements for more than three years must be registered at the Land Department to be legally enforceable.
o While contracts may include options for renewal (e.g., "30+30+30" years), these renewals are not legally guaranteed upfront and would require new registration at the Land Department upon expiration of each term.
o Foreigners can own the building on leased land, but not the land itself.
Key Advantages:
o Allows foreigners to control land or houses for an extended period, circumventing foreign land ownership restrictions.
o Generally lower initial cost than freehold.
o Greater flexibility for shorter-term commitments.
o No foreign quota limitations (unlike freehold condos).
Key Disadvantages:
o Temporary possession; the property reverts to the lessor at the end of the lease term.
o Value may depreciate as the lease term shortens.
o Renewals are not guaranteed and depend on the lessor's willingness and future regulations.
o Can be more complex for inheritance (lease rights are generally personal and may terminate upon death, unless specific provisions are legally structured).
o Financing for leasehold properties can be more challenging.
Research and Define Your Needs
• Property Type: Determine if you're looking for a condominium (freehold ownership often available for foreigners), a house, or land (usually leasehold for foreigners, or through a company structure).
• Location: Research different areas based on your lifestyle, investment goals (e.g., rental yield, capital appreciation), and proximity to amenities.
• Budget: Establish a realistic budget, factoring in not just the purchase price but also transfer fees, taxes, common area fees, and legal costs.
Step 1
Engage a Reputable Real Estate Agent
• While not legally required, a good agent can help you find suitable properties, negotiate prices, and provide market insights.
• Seek recommendations and verify their experience and reliability.
Step 2
Appoint an Independent Lawyer
• Crucial Step: This is paramount for foreign buyers. An independent lawyer will conduct due diligence, explain complex legalities, draft and review contracts, and protect your interests throughout the process. Do not rely solely on developers' or sellers' lawyers.
Step 3
Property Viewing and Selection
• Visit potential properties in person. For condominiums, check the foreign ownership quota (foreigners can own up to 49% of the total usable floor area in a condominium project).
• Evaluate the property's condition, surrounding environment, and infrastructure.
Step 4
Purchasing property in Thailand can be a rewarding experience, but it's crucial to follow the correct procedures and adhere to local laws. This step-by-step guide outlines the typical process for foreign buyers.
Make an Offer and Pay a Reservation Fee
• Once you've selected a property, make a formal offer.
• A reservation fee (typically non-refundable, 1-5% of the purchase price) is paid to secure the unit. A Reservation Agreement or Memorandum of Understanding (MoU) is signed, outlining key terms.
Step 5
Due Diligence Period
• Your lawyer will conduct comprehensive due diligence (see "Investment Due Diligence Checklist" below). This typically takes 1-5 weeks.
• This phase involves verifying title deeds, checking for encumbrances, reviewing building permits, assessing legal compliance, and more.
Step 6
Sign the Sale and Purchase Agreement (SPA)
• After successful due diligence, the SPA is drafted (usually by your lawyer) and signed by both buyer and seller.
• A down payment (typically 10-30% of the purchase price) is made upon signing the SPA. The SPA will detail payment schedules, completion dates, and conditions.
Step 7
Fund Transfer and Foreign Exchange Transaction Form (FET)
• For freehold condominium purchases by foreigners, the purchase funds must be remitted into Thailand in foreign currency and converted to Thai Baht by a Thai bank.
• The bank will issue a Foreign Exchange Transaction Form
(FET or e-FET slip for amounts below USD 50,000) confirming
the purpose of the remittance is "to purchase real estate." This document is essential for ownership registration at the Land Department.
Step 8
Transfer of Ownership at the Land Department
• Both buyer and seller (or their authorized representatives/lawyers) meet at the local Land Department office on the agreed transfer date.
• All necessary documents (passports, FET forms, SPAs, title deeds) are presented.
• Transfer fees and applicable taxes are paid.
• The ownership is officially registered, and the new title deed (Chanote) with the buyer's name is issued.
Step 9
Post-Transfer Actions
• Register for utilities (electricity, water).
• Set up payment for common area fees.
• Arrange for house registration (Tabien Baan) if desired.