Things to look out for when acquiring land in Thailand
By Kasemsan “Sam” Itthithamwinit
Siam Legal
Buying a property in Thailand can often be confusing with so many sources offering differing views. It is almost common knowledge in Thailand that foreign nationals may not own land but what some may not know is that foreigners can actually own the house or any structures built on the land. The biggest problem for foreigners therefore is how to own the land. At present, there are a few options available under
Thai law. The first option is to set up a Thai Company to hold the land under a freehold title. Do bear in mind that this company should be a genuinely trading company operating a business in Thailand with the prerequisite Thai shareholders.
Another option is to own the land under a leasehold structure which is a much simpler and effective means of acquiring ownership. There are other ways for foreign nationals to register property rights in Thailand and these include the use of, among others, usufructs, superficies and others. These other rights which are afforded by
Thai law, however, may be beyond the scope of this article. Notwithstanding, it appears a leasehold title is currently still the best option for foreigners to enjoy rights over land in Thailand.
Now that you have acquired the land in Thailand, there are a number of issues which you should be aware of in order to avoid any surprises in the future.
Properties and Taxes
The issues concerning taxes are often enigmatic but it is important to be aware of a few issues. When you hear the word “tax”, your first thought would normally be that is something overwhelmingly complex, especially when you are outside your own country where the language and governing law are different. What taxes will you be responsible for? When are the taxes payable? Who should rightfully bear the burden for certain taxes? These are important questions which are good to keep in mind as it is certainly wise to avoid any unwarranted visits from the revenue department.
Apart from the government fees, stamp duties and taxes which you have to pay at the
Land Office, there are two other taxes concerning the land as well as any structures built on it. These are Local Maintenance Tax and Structure and Usage Tax.
Local Maintenance Tax
The owner of the land has the ultimate responsibility to pay the Local Maintenance
Tax. This type of tax is not overly burdensome to the payer as the tax rate is only between 1-70 baht per Rai per year.
Structure and Usage Tax
The owner of the land with any structures built has the responsibility to pay these taxes at the Municipality or District Office within February of the following year at the rate 12.5% of the estimated cost or income. However, the government exempts this Structure and Usage Tax for the first piece of land that is used primarily for

residential purpose. In other words, if you own only one piece of land and do not receive any income from the land or do not conduct any business on that land, you do not have to pay the Structure and Usage Tax. On the contrary, if you have more than one piece of land; even if you do not receive any income from either land nor conduct any business on them, you are still required to pay the Structure and Usage Tax on the second piece of land. In case the land and structure is in the company’s name, the company has the duty to pay the Structure and Usage Tax even if the company does not derive any income from it. If this tax is outstanding and being neglected it may lead to further investigations by certain government bodies.
Fortunately for the leaseholder, since the Lessee is not the landlord, the Lessee is not responsible or liable to pay the Local Maintenance Tax, Structure and Usage Tax and
Personal Income Tax arising from the rental. However, most Lessors always pass these tax burdens on to the Lessee by means of a contractual obligation. Thus, it is prudent to seek advice from a trusted professional before you sign any contracts.
4 Possible Ways Your Land Can be Taken from You
Adverse Possession of Land
Adverse possession occurs when you allow any person to possess or use the land while you are, for example, back in your home country. Under the Civil &
Commercial Code (CCC), Article 1382, it states that “Where a person has, for an uninterrupted period of ten years in case of an immovable, or five years in case of a movable, peacefully and openly possessed a property belonging to another, with the intention to be its owner, he acquires the ownership of it.” As such, if other persons have taken possession of your land for 10 years consecutively with the intention to be the owner, they can legally ask the court to transfer the land into their names. If the title is Nor Sor Sam Kor, Article 1375 states that possession will take effect in as early as 1 year.
Access, Easement, or Profit a Prendre
Is your land surrounded by other properties? Whether you have a freehold or leasehold title, if a piece of land is surrounded by other pieces of land, there is a good probability that it has no access to the public roads. The owner must pass over the surrounding land to reach a public road. The place and the manner of the passage must be chosen as to meet the needs of the person entitled to passage and to cause as less damage as possible to the surrounding land. Additionally, the person entitled to passage must pay compensation for any damage suffered by the land owner on account of the passage being established. These are rights provided by the law and require no registration at the land office.
Servitude
To the freehold or leasehold owner, the owner of any adjoining land may have some rights over your land and vice versa . A land may be subjected to a servitude by virtue of which the owner of such land is bound, for the benefit of another land. The servitude established by agreement from both parties must be registered at the land office. A good example of this is the communal water well.

Expropriation by the Government
This is the most unpredictable manner in which your land can be taken from you. In practice, the government will normally reserve such land before issuing the Title Deed for any future developments. However, in some rare circumstances with cases involving, for instance, transportation and utility projects, developments of national security, national resources, agriculture, industrial or town planning, the government can seize private land under their rights granted by the Government Property Seize Act
B.E. 2530.
By this action, the government will normally pay compensation to the land owner in accordance with the government’s appraisal price which is normally much lower than the real market price. This is perhaps the worst possible scenario as the chances of being granted when appealing such actions are very slim. This is even worse if you are a leaseholder as the compensation will be paid to the lessor as the rightful land owner.
This may be burdensome for lessees who have paid the entire rental in advance. In such cases, you should ensure that there is a clause in your contract which provides you with a refund in the event that the land is seized by the government. Again, we do recommend seeking some professional advice before you sign any contracts in
Thailand.
What Happens Upon Your Demise?
This is certainly not something we would like to think about but it is important to have good estate planning to ensure your loved ones are taken care of should you finally pass away. If there is no will, the intestate’s assets must be distributed in accordance with the classes of relations as stipulated in the CCC Article 1629 which are, in order of priority: (1) descendants; (2) parents; (3) brothers and sisters of full blood;(4) brothers and sisters of half blood; (5) grandfathers and grandmothers; (6) uncles and aunts.
Before any distribution of the estate to the relatives, half of the estate, known as Sin
Somros , will belong to the spouse, if any..
.
The rest will be equally distributed accordingly. If there are no living relations, the estate will devolve on to the State. As such, we do strongly recommend making a Thai Will to cover all of your properties and assets in Thailand. For those who own land under a company on a freehold basis, upon your demise, your property would not simply be passed on to your heirs. Instead, it would be passed on in the form of shares. In the other words, your heir will receive shares of the company as opposed to the actual property itself which can involve complex legal mechanisms.
For those who acquired a property under a leasehold structure, it is worth mentioning that lease is a personal right which is not attached to the property per se and essentially terminates when the lessee dies. Therefore, if you make a renewable long term lease and have already paid the rental in advance, you should also ensure that there is a succession clause in the lease contract so as to allow you to transfer your right of the lease to your heir. Nevertheless, you should still have a Will which states your clear intention to pass on such rights to your loved ones.

There are a lot of things that can happen to your property if you are not aware of your legal rights in Thailand. The entire process can become quite a tangled web and at times, very costly if certain precautions are not taken early on. One of the major concerns in any property acquisition is the minimization of risk and the security of your investment. This is even more important when you purchase properties outside of your own jurisdiction where communication can also serve as a severe impediment to your objectives. It is always wise to seek some professional advice from a trusted professional that looks out for your interest and understands your needs.
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