LAND OWNERSHIP
Thailand Land Owning Laws
In the beginning, i.e. the Sukhothai era, most of the land in Thailand was in the possession of the people, who reserved the right to individually use said land and to transfer it to their heirs. Later, in the Ayutthaya and Ratanakosin era, the land was owned by the kings. The people had to request a royal grant in order to obtain land. At present, the possession of land has to be in accordance with the principle land administration laws. There is the supervising Land Department and some land is still controlled by other governmental authorities, such as the Forestry Department, which is responsible for the management of land in forest zones, [Sor Por Gor] is responsible for land in reformed land zones, District Offices and Municipalities [Or Bor Tor] look after public land zones. All land under the control of these government departments have no effect as to the rights of people who owned land before the government appointed the land as a forest, public or reformed zone. The law has no retrospective effect on the individual's rights to land under the law before it became a forest zone. That individual person still maintains its rights to the land.
There are two types of rights to private land:
The first is the right of possession (Possessory right), i.e. people who possess and use the benefit of land will have the right to possess such land under the Civil and Commercial Code. The second is ownership by a person who has a title deed and documents concerning the land.
1. Sor Kor 1
is a notification form of possessed land. There is a certificate to show the right to the land. This maintains existing rights. Notification of Sor. Kor 1; on December 1st 1954, the government advised all land proprietors to notify such possession to the government as per form Sor. Kor 1. After it was proven that such a proprietor had possessed the land legally and used the benefit of the land, then the government would issue Nor. Sor 3 or Nor. Sor. 3 Gor as evidence. Nor. Sor 3 and Nor. Sor. 3 Gor are legal certificates provided that any name shown on the title is a person who has the right to the land (according to the principle law). This right will be recognized by the law and can be used as evidence in any dispute with an ordinary person or the government.
2. Por Bor Tor 6
is evidenced by the issuance of a tax number for the purpose of paying tax for using the benefit of the land. Such land has not yet been assessed as to the person’s right to possess such land. In the event that there is no title for the land , then it may be land in a conserved forest, public land or land which existed under Sor Kor 1, Nor. Sor 3, Nor. Sor. 3 Gor or a title deed. Any of these titles must have a Por. Bor. Tor 6 as tax must be paid, the same as any land without a title. Purchase of such land is possible by handing over the possession of the land to the buyer along with the tax number. The right to land under Por. Bor. Tor 6 can not be used as evidence in any dispute with authorities.
3. Sor Por Gor 4-01
is an allotment of land from the land reformative committee, and under no circumstances may this land be bought or sold. It may be transferred to heirs only.
4. Nor Sor 3
is an instrument certifying the use of land issued by the government to the proprietor of land not a possessory title, i.e. it is confirmed by law that a person holding Nor. Sor 3 has the legal right to possess the land. This land title can be used as a legal document or to use the benefit of the land as an owner. Nor Sor 3 is a floating map with no parcel points. It is issued for a specific plot of land and is not connected to other land plots. This causes problems in verifying the land area. Any legal acts must be publicized for 30 days.
5. Nor Sor 3 Gor
is a legal land title with the same legal basis as Nor. Sor. 3. The difference being that Nor. Sor. 3 Gor has parcel points on the map, and is set by using an aerial survey to set the points and the land area. It is possible to verify a nearby land area. It always uses the same scale of 1:5000. There is no need to publicize any legal acts, and it is possible to partition (divide) the land into smaller plots.
6. Land Title Deed
is a certificate for ownership of land. A person having their name shown on the deed has the legal right to the land, and can use it as evidence to confirm the right to government authorities. The title deed has been issued by using GPS to set the area and boundaries of the land, which is a very accurate method. Any legal acts may be done immediately, as per the right of ownership. Land partition of more than 9 plots must be carried out according to the Land Allotment Law, Section 286.
7. Condominium
(may be used as drafted) Buildings on land
Foreigners have the right to ownership of buildings only, where land is not included. Legal acts are unlimited. A suggestion for foreigners is to lease the land for 30 years with an option to an extension of the lease, then purchase ownership of the house built on the land. Certainty of possession of land and house is assured, by being the owner of the house. The ownership of the land shall be leased out. If arranged as stated above, then the house will be separate from the land, and will not be a component part under the Civil Law. Ownership of buildings can be confirmed, and the lessor can not seize the house upon expiration the lease.
Useful Measurement Conversion Factors
The units of land measurement in Thailand are the Wah, Ngan, and Rai.
Conversion factors between Thai measurements and Metric measurements are:
1 Wah = 2 meters
1 square Wah = 4 square meters
100 square Wah = 400 square meters = 1 Ngan
4 Ngan = 1 Rai = 1,600 square meters
Conversion factors between Thai measurements, meters and acres are:
1 acre = 4840 square yards
1 acre = 4,046.8561 square meters
1 acre = 2.529285 Rai (approximately)
hectare = 10,000 square meters = 2.471 acres = 6.25 Rai (approximately)
FOREIGN NATIONALS MAY OWN
- A unit in a registered Condominium
- A building (as distinct from it's land)
- A registered leasehold of up to 30 years for all types of titled land (and/or buildings). However with appropriate extension and purchase options a 30 year lease can become tantamount to freehold purchase.
FOREIGN NATIONALS MAY NOT OWN
- Freehold Land
- More than 49% of the shares in a Thai company that owns freehold land
Building Regulation
There are several building codes which define limits to the location, height and density of properties. Two of the main groups are:
Oceanfront Zones
Starting from the oceanfront, there are (with some exceptions) designated zones each with different parameters.
- Zone 1 extends from the mean high line back 50m
- No building may be constructed in the first 20m. In the remaining 30m, structures may only be up to 6m in height, which may occupy up to 25% of the titled area.
- Zone 2 then extends back a further 150m. Here buildings may be up to 12m in height and occupy 70% of the available land.
- Zone 3 runs as far as the base of the hills allows buildings up to 16m in height.
Hillsides
- · No buildings on land over 80m above sea level.
- · For safety reasons, if you build on hillside land (i.e. land more than 40m above the sea level) then an 8m building limit applies.
- This is measured from the original grade level so terraced homes can be built whose total height, bottom to utmost top exceeds this height.
Some helpful notes:
- · Properties which appear to defy these codes may have been built prior to the introduction of these laws.
Apart from knowing the regulations for their own property, buyers should also know what is allowable beside and in front of them.
Land owning laws in Thailand
Ownership of land in Thailand is governed by the
Land Code BE 2497 (1954), the Civil and Commercial Code, Land Reform for Agriculture Act BE 2518 (1975) and the regulations set forth by the Ministry of the Interior.
Although Thai law stipulates that a foreigner may not own
land in Thailand in his name, he has the right of ownership of buildings only. If a foreigner wishes to purchase land in Thailand to build a property, he has 2 options:
1. 30 Year Lease Option
The land is purchased on a 30-year leasehold with an option to extend the lease for further 30 year periods. Possession of the land is assured by virtue of the fact that property occupies the land. The lessor cannot seize the property upon expiration of the lease, as the property is separate from the land.
In order to be enforceable, any lease for a period longer than three years must be registered at the Land Department, which involves payment of a registration fee and stamp duty based on a percentage of the rental fee for the whole lease term. The original registered lease remains in force and effect even if the property is sold. Both parties can contractually agree to renewals, but this right can't be registered at the Land Department.
2. Thai Limited Company
If a foreigner is going to operate a business in Thailand then he may purchase the freehold of the land through his Thai Limited Company. The land will be owned by the Thai Company, not by the individual.
Limited Liability Company - this form of purchasing property is the most popular with foreign investors as the Articles of Association can be varied to allow greater protection for foreign minority shareholders where majority Thai ownership is required under the Alien Business Law.
Thai law requires that 51% of the shares be held by Thai juristic persons, however, any company with more than 40% foreign interest that purchases land will be investigated by the Central Land Office in Bangkok (under section 74 of the Land Code) to ensure that the company has not been organized in an attempt to circumvent the prohibition against foreign ownership of land.
This results in the foreign ownership of the company being limited at 39% (only if buying land), but with the recommended changes of the Articles of Association, the foreigner can be the only director of the company, and the only person of the company who can commit or bind the company in any contractual dealings (buy or sell land and house), effectively giving the minority shareholders control over the company.
