What are the key factors to consider renting vs. buying real estate in Thailand?

Question

I'm living in Thailand for several years so far (student "ED" visa).

It's well-known that Thai laws are pretty much restrictive regarding non-local citizens buying out real estate in the country. E.g., in the condo non-Thai citizens can't buy more than 49%; you can't buy a separate house unless you have a Thai partner (or a spouse) who would own 51%, etc.
Some expats open companies first and then make the real estate owned by these companies.

I'm living alone in rented apartments but I'd like to make a step forward towards buying.

Obviously, I don't like "cheating the system" by a false marriage, false company or so.

So, the question is, what are the key factors I should take into consideration before actually buying a real estate in Thailand (or deciding that renting is better)?

Answer 1

Owning a house is possible in Thailand, but only if you build it yourself, and submit lots of paperwork. You do not own the land on which the house is situated, though. Foreigners can not own land in Thailand. (Think: "ไผทของไทยทุกส่วน" from the national anthem - they really mean it!)

A company is a legal entity, and can own land - and there are two ways (that I know of) for a foreigner to own 100% of a company. One is for US citizens only, and the other is to start a BOI company. Both a little convoluted, but can be done. If the government suspects that the company only exists to allow a foreigner to control Thai land, they will close it down.

You can not own 49% of a piece of land, even if married to a Thai national. If married to a Thai and they acquire some land, you have to sign a document stating that you will not have anything to do with the land (go on - ask me how I know!).

OK, that's houses and land covered. Condos ... you can own one of those outright, but you have to prove that the money you use to buy it (outright - you can't get a bank loan to buy one) comes from overseas. The exclusion to this is if you have a work permit, where you do not have to prove that, as you are allowed to earn money in Thailand. There was once a case where you could get a bank loan for purchasing a condo, but it was from the SG overseas branch of Bangkok Bank, and the conditions were ... not favourable.

Also, foreign ownership of condo units in a building is capped at 49%, but that's only a problem if buying in an area with lots of other foreigners.

Finally, the most important thing to remember, is that foreigners can not own the tiniest piece of land in Thailand. There are no exclusions to this rule, and if you see someone claiming otherwise, they are trying to sell you something that you will not actually own.

Answer 2

A foreign national cannot own land in Thailand.....

But, you can LEASE the land for up to 30 years, and then build what you want on top of it. You can also add a provision to have the right to renew the lease for 30 more years. You can then also sub-lease the land or pass on the lease rights to another foreign national. But this lease needs to be registered in the local/provincial land office in order put an encumbrance on the land title. This is the most important aspect, so that the lessor or new owner does not come back later and claim that you are merely squatting on their land. How long do you plan to actually exist on this planet in an able-body capacity (e.g. not hooked up to life support or bed rest)?

To put it in perspective, do you really want to OWN property in a particular location? Or do you want to control who gets to stay there, what you can do with it, etc? In your home country, even if you do not currently have any outstanding mortgage or liens, try not paying property taxes for a year and see who really "owns" your property.

Not sure how trusts would work with foreign nationals. That was something I wanted to explore: To have a house for my half-Thai son that I would have the right to stay there and manage it at least until he turns 20 years old (lease it from the trust if needed).

But if you really want to OWN the land....either you need to

1. obtain Thai citizenship.....or
2. get married to a Thai national and then you can own up to 1 rai of land upon their death.

I'll get in touch with my lawyer friend who consults for a top Thai legal firm to confirm exactly how that works (if it is an automatic entitlement of the surviving spouse, if a judge has to sign off on it, is a will required, etc). I'll also inquire about the trust.