I am having trouble understanding the details of buying a house as a foreigner with a 30 year land lease.

 

As an example let’s say I buy a 3 bed detached single storey house on a 400SQM plot of land that is being sold  for 5 Million THB. I sign for a 30 year lease.

I am only 40 years old and have a long life expectancy. Also assume that house prices stay constant.

 

I think I am right in that after the 30 years I will own nothing, the land owner will again own the land and everything on it.

Obviously at that time another 30 year lease may or may not be agreed.

 

So can the house ever be regarded as separate from the land?

Are the words “land lease” confusing me and it should be more accurately be called “land and everything on it lease”?

 

So what is the situation after 15 years?

How much is my house and land worth? Is it 2.5 Million THB because any buyer would only have a lease period of 15 years if they cannot successfully negotiate a 30 year lease with the land owner.

But if they successfully negotiate a 30 year lease with the land owner for the same price I paid what is the situation? Does the land owner receive 2.5 Million THB for a further 15 years and I also receive 2.5 Million THB.

This all seems a bit odd to me? Maybe I am missing something?

 

What is the situation after 29.9 years?

I talk to the land owner about another 30 year lease?

If he refuses to enter into another 30 year lease or would charge far too much do I own the house and could demolish it before the end of the 30 year lease?

This is where my mind becomes totally confused. I can see that this might be possible with the detached house I bought but what if I bought a middle town house?

 

So I ask again, can the house be regarded as separate from the land?

Should it always be regarded as renting the house and land for 30 years and paying the rent upfront?

 

I hope someone can help my very confused brain.

Thanks

Keith

You cant buy the house/land. A Thai person or company (51%) buys the house/land and you rent it. you are not, and cannot, individually buy the structure separate to the land.

You can own 49% of a Thai company that owns the house, and rent from that company. This company setup gives you a level of control over the property being sold or a new lease etc.

The example you give above is 5 million to buy the freehold, not the leasehold. its not paying the rent up front.

Ownership, buying, selling of the property and leasing the property are two separate things.

 

 

 

41 minutes ago, Peterw42 said:

You cant buy the house/land. A Thai person or company (51%) buys the house/land and you rent it. you are not, and cannot, individually buy the structure separate to the land.

sorry, maybe a bit off topic, but as i understand it, it is possible to build and own your own house on leased land if you have all the necessary permissions and documents. i’m not sure, though, if i can buy an existing house without owning the land itself (for example, if it’s only leased) ... 

5 minutes ago, motdaeng said:

sorry, maybe a bit off topic, but as i understand it, it is possible to build and own your own house on leased land if you have all the necessary permissions and documents. i’m not sure, though, if i can buy an existing house without owning the land itself (for example, if it’s only leased) ... 

Yes, you can build and own a structure, on land you don't own, but to what end ? It doesn't have its own separate title, it cant be separated from the land, it cant be bought and sold. No different to dumping a load of bricks on on someone else's land and saying the pile of bricks belong to you.

Unless its a caravan or portable house, and can be taken with you at the end of a lease it serves no purpose.

Thanks for the comments. I am still confused, maybe because I have not bought a house in Thailand, I am just considering it.

@Peterw42   thanks for your comment concerning a Thai company, it made me understand the advantage of this as there is no lease period. Although I believe if forming a Thai company with nominee thai shareholders only for the purpose of owning a house it is illegal, Thai law cannot be overcome that easily. For that reason I would never consider going down the Thai company route.

 

About a year ago I spoke an expat friend who had bought a house, he said with a 30 year land lease but he was having problems because when signing the purchase forms the land owner had entered a lower price on the contract to save tax but my friend unknowingly signed it. The expat’s first language was not English so maybe I did not fully understand but I think he said he paid a total of 5 Million but 1 Million of that was for the 30 year land lease. He was having problems because the original land owner had sold the land to another Thai person.

That is what I thought he said but now I am wondering if I understood wrong which has led to my confusion.

 

So my question is:-

If an estate agent has details of a detached house for sale for 5 Million what exactly does this mean?

Many of these houses are sold to expats and many times that a 30 year lease for the land has been mentioned.

Does someone own the land and the house, they cannot be separated. Then at the Land Office I would pay 5 Million to lease the land with the house on it for 30 years?

So the land owner almost always also owns the house?

 

Thanks

Keith

 

 

 

I know the mega rich home owners on here who have made millions, if not billions, in the Thai property market will shoot me down....but seriously......do not buy......rent.

Thanks for you comment @motdaeng and your advise  @Will B Good is good which is why I have been renting for the past 8 years.

Possible noise concerns me so I would prefer to rent a house for a period of time that the owner also wishes to sell. The main reason I am considering buying is because I have lived happily with my Thai girlfriend for 8 years and I totally trust her and it would also be a way to give her security. She has not mentioned it and actually seems quite happy to continue to rent.  

Actually I might continue to rent as if any problem can just move but I would still love to understand the situation when buying.

9 minutes ago, Keith5588 said:

Thanks for you comment @motdaeng and your advise  @Will B Good is good which is why I have been renting for the past 8 years.

Possible noise concerns me so I would prefer to rent a house for a period of time that the owner also wishes to sell. The main reason I am considering buying is because I have lived happily with my Thai girlfriend for 8 years and I totally trust her and it would also be a way to give her security. She has not mentioned it and actually seems quite happy to continue to rent.  

Actually I might continue to rent as if any problem can just move but I would still love to understand the situation when buying.

If you totally trust your Thai GF then you could buy a new build, put the land in her name and the house in yours OR buy an existing property and put it all in her name with a Lease/Usufruct giving you the right to live in the property for 30 years + the option to extend for a further 30 years if required. 

 

BTW there was a lot of talk about increasing the maximum lease period to 99 years, as with other things this seems to have gone quiet since the change of government but will hopefully be back on the table when the next government comes in. 

https://www.estate-samui-properties.com/thailands-new-99-year-land-leasehold-law/  

Thanks  @SamSpade actually I plan to do as you suggest, have my gf buy the property freehold + have a Usufruct contract. From what I have read the Usufruct contract is not for a period of time but it lasts until I die, then it dies with me.

I prefer an older house, not a new build, just my preference.

 

Even though, if I decide to buy and would do the above I still do not understand the basics.

 

If the property is advertised at 5 Million, is that broken down to say 4 Million for the house + 1 million for the land?  Then my gf buys the land freehold for 1 Million and I buy the house for 4 Million?

Or as the house was already built then I think my gf would buy the property freehold for 5 Million?

 

You mention put the land in her name and the house in my name. Is it possible to do that? If so then has it already been decided that the freehold land is worth say 1 Million + the house worth 4 Million?

 

My expat friend purchased his house, that was already built, with his Swiss wife for about 5 Million. They obviously could not have any freehold. I think he said that he paid 1 Million for leasing the land for 30 years but the original land owner entered 600,000 on the contract to pay less tax. At the time years ago my friend just signed without looking. Recently it became a problem because the original land owner sold the land and the new owner discovered what happened and wanted to buy the house cheap.

All this has left me confused. Maybe there was misunderstanding as the first language of my expat friend was not English.

 

 

My biggest query is that if a house in an estate agents window has a price of 5 Million and it will be sold to an expat who has to lease for 30 years. Will he be paying 5 Million for the 30 year lease? The house and land cannot be separated?

 

I am now 72 years old, maybe I am going ding dong without realising?

 

 

@Keith5588  IMHO ... that would be a really bad financial move, especially for the cost involved.

 

Spend 4 million instead, on a condo in your name, if you really must want to buy/lease something.   At 40 years old, I'm also wondering why you'd want to do that, 

 

What's it gong to be worth in 15 year ? .... ZERO, because nobody in their right mind, buys a house they don't own the land on, except a ding dong foreign (no offense intended), but no Thai would touch it.

 

The house would depreciate, a lot, if you could find a buyer.   Land appreciates here / TH, quite nicely, building do not.

 

Basically paying 30 rent in advance, and let that sink in.   Have you ever lived anywhere for 30 yrs at a time?

 

Much better to simply rent a nice house, can't lose anything there, and free to up and move when ever you want, for any reason.

 

5M over 30 yrs, @ 0% interest is still 13,889 a month.   Location location location, but that rents a decent place.

 

You don't state where the house is, or, what type of relationship you are in, and or, leasing house/land from someone party to that relationship.

 

Edit: see you have GF, and you're buying the house for her, just want a lease so you not evicted.   Good luck with that one.  If they don't want you living there, trust, you won't be living there.

 

How long have you been together, and do you live in TH ?   

If short time relationship, less than 5 years, and you don't live in TH ...

.... THAT'S A REALLY HARD PASS.

 

Buy a condo in your name.

 

I didn't even marry my present wife until we were living together for 8 years, as not sure if I was going to remain in TH.   Worked out, and been together for 20+ years.

 

2 hours ago, Keith5588 said:

Thanks for you comment @motdaeng and your advise  @Will B Good is good which is why I have been renting for the past 8 years.

Possible noise concerns me so I would prefer to rent a house for a period of time that the owner also wishes to sell. The main reason I am considering buying is because I have lived happily with my Thai girlfriend for 8 years and I totally trust her and it would also be a way to give her security. She has not mentioned it and actually seems quite happy to continue to rent.  

Actually I might continue to rent as if any problem can just move but I would still love to understand the situation when buying.

 

If you have capital or access to a mortgage buy in 'your own' market. I'm guessing it is relatively stable  (UK?) and you probably have a good handle on it.

 

Rent that property out and use the income to rent over here.

 

That way you are in the property market with minimal risks and yet retain the flexibility to move around over here if need be.

 

My wife had our house built.....very nice three bed, all en suite, European style set in one rai.......and it is 'worthless'. In total she probably spent about 3 million and it has virtually no resale value to speak of...... all down to location, location, location. So be careful.

 

 

Stop trolling Keith, you are either 40 years old or 72 years, not both as you claim.

55 minutes ago, Keith5588 said:

If the property is advertised at 5 Million, is that broken down to say 4 Million for the house + 1 million for the land?  Then my gf buys the land freehold for 1 Million and I buy the house for 4 Million?

Or as the house was already built then I think my gf would buy the property freehold for 5 Million?

If the property has already been owned by somebody else then you cannot separate the house from the land so your GF would buy the whole property freehold.

Thanks for your comments @KhunLA 

 

Sorry I didn’t make it clear, I was just using a fictitious house as an example.

I am actually 72 years old and have been living in Thailand for over 8 years with my Thai girlfriend. Similar length of time when you decided to marry.

 

The location I think does not matter much as I was just trying to understand the legal facts, firstly if a farang bought a detached house as an example.

 

I have to agree in that a Thai would buy freehold because they can.

We have lived in a condo but the chances of annoying noise I think are much greater compared to a house. I much prefer to live in a house.

 

Good to hear that you have had a good happy long experience with your wife. Me too, I think many do have good happy relationships.

 @Will B Good   I have to smile. I came to Thailand for a 4 month vacation in 2016 when I met my Thai gf. I returned to the UK and prepared my house to rent out. Had it rented out for 7.5 years while I lived happily in Thailand.  Just as you suggest!

Recently I went to the UK to sell my house as well as sort other matters. I have no immediate family in the UK, no children and my one brother had a tragic accident.

 

I had to do a lot of work to prepare my house. I am now 72, I can still do it but I didn’t want to. In another 10 years it would be harder. Basically I want to have it sold and live a simple happy life in Thailand and remove the selling of a house problem for me or my gf.

 

Your house sounds very good but I understand that location is important, thanks for the advise.

We spent the first 4 years living in Khon Kaen which was OK, but I could not live in one of the remote villages, too isolated for me, but I also do not like a busy tourist place.

 

Maybe you can sell me your house?  😊

@bubblegum I am 72.   The example I used was just that, I stated 40 year old person because if I stated 72 then asked about the situation after 29.9 years I would probably receive comments like I will be long dead.

Hope that explains things.

2 minutes ago, Keith5588 said:

 @Will B Good   I have to smile. I came to Thailand for a 4 month vacation in 2016 when I met my Thai gf. I returned to the UK and prepared my house to rent out. Had it rented out for 7.5 years while I lived happily in Thailand.  Just as you suggest!

Recently I went to the UK to sell my house as well as sort other matters. I have no immediate family in the UK, no children and my one brother had a tragic accident.

 

I had to do a lot of work to prepare my house. I am now 72, I can still do it but I didn’t want to. In another 10 years it would be harder. Basically I want to have it sold and live a simple happy life in Thailand and remove the selling of a house problem for me or my gf.

 

Your house sounds very good but I understand that location is important, thanks for the advise.

We spent the first 4 years living in Khon Kaen which was OK, but I could not live in one of the remote villages, too isolated for me, but I also do not like a busy tourist place.

 

Maybe you can sell me your house?  😊

 

 

HAHAHA! I would sell it to you tomorrow......sadly it's not mine......and believe me....you would not want to be living here.

 

It is about an hours drive beyond a sign that says You are now entering the back of beyond

1 minute ago, Keith5588 said:

I would probably receive comments like I will be long dead.

The odds are in favour of that aren't they ?

Thanks @SamSpade that makes sense, it helps me gradually understand.

 

I now thing there was some sort of misunderstanding when I spoke with the Swiss expat.

 

 

4 minutes ago, Keith5588 said:

 @Will B Good   I have to smile. I came to Thailand for a 4 month vacation in 2016 when I met my Thai gf. I returned to the UK and prepared my house to rent out. Had it rented out for 7.5 years while I lived happily in Thailand.  Just as you suggest!

Recently I went to the UK to sell my house as well as sort other matters. I have no immediate family in the UK, no children and my one brother had a tragic accident.

 

I had to do a lot of work to prepare my house. I am now 72, I can still do it but I didn’t want to. In another 10 years it would be harder. Basically I want to have it sold and live a simple happy life in Thailand and remove the selling of a house problem for me or my gf.

 

Your house sounds very good but I understand that location is important, thanks for the advise.

We spent the first 4 years living in Khon Kaen which was OK, but I could not live in one of the remote villages, too isolated for me, but I also do not like a busy tourist place.

 

Maybe you can sell me your house?  😊

 

 

Have you/will you....avoid CGT? And if so....how?

 

 

5 hours ago, Keith5588 said:

Does someone own the land and the house, they cannot be separated. Then at the Land Office I would pay 5 Million to lease the land with the house on it for 30 years?

So the land owner almost always also owns the house?

 

My understanding is that two separate chanotes, one for land and one for house is possible, but ONLY at the time the house is built.  Already existing structures on a chanote can not be separated.

 

If you wanted to lease land for 30 years, you'd put up a knockdown house on a concrete pad.  You could (I believe) get a separate chanote for the house itself, not including any land.  You would have the 30-year lease contract for the land.

 

At the end of 30 years, you could renew the lease, or pick up your knockdown house and move it elsewhere.

 

Or just rent a house.

5 hours ago, Will B Good said:

 

 

 

I know the mega rich home owners on here who have made millions, if not billions, in the Thai property market will shoot me down....but seriously......do not buy......rent.

Buying condos is ok, they've gone up massively since covid, those saying don't buy only rent have lost out

6 hours ago, SamSpade said:

If you totally trust your Thai GF then you could buy a new build, put the land in her name and the house in yours OR buy an existing property and put it all in her name with a Lease/Usufruct giving you the right to live in the property for 30 years + the option to extend for a further 30 years if required. 

 

BTW there was a lot of talk about increasing the maximum lease period to 99 years, as with other things this seems to have gone quiet since the change of government but will hopefully be back on the table when the next government comes in. 

https://www.estate-samui-properties.com/thailands-new-99-year-land-leasehold-law/  

      If the OP doesn't want to buy a condo in foreign quota and doesn't want to go the company route with a house, I think what you outline is the best option.  I would certainly choose this over any sort of deal with leased land.  

@Will B Good The sale of my house is not complete, my Title Deed plan needs to be updated, it's been an annoying delay. Concerning CGT, I'm sorry but that is something I also do not know, I have been told that CGT will be very small or maybe nothing as I have owned the house for over 45 years and it has been my only home.

The 30 year lease makes a lot of sense if you pay it monthly, and not a lump sum up front. 

 

฿5M is ~฿14K a month for 30 years. If you can get a house you like for ฿20k  a month locked in for 30 years, that’s a good deal.

16 hours ago, Keith5588 said:

My biggest query is that if a house in an estate agents window has a price of 5 Million and it will be sold to an expat who has to lease for 30 years. Will he be paying 5 Million for the 30 year lease? The house and land cannot be separated?

OP, you still appear a little confused with the process. If a house is for sale, that sale is for the "freehold", not the leasehold. Leases are not bought and sold at the land office, only freeholds. So if you ever see a house for sale its the price to buy the house/land, name on the title deed etc.

Also, houses cannot be separated from the land title, houses don't have titles or chanotes etc. A house sitting on someone else's land cant be brought or sold with a separate title. As I said above, 

Yes, you can build and own a structure, on land you don't own, but to what end ? It doesn't have its own separate title, it cant be separated from the land, it cant be bought and sold. No different to dumping a load of bricks on on someone else's land and saying the pile of bricks belong to you.

Unless its a caravan or portable house, and can be taken with you at the end of a lease it serves no purpose.

The only house ownership document you could possibly ever have, if you paid to build the house, is a receipt from the builder. The only possibly time this would maybe become applicable in a divorce settlement. Who paid what during marriage.

@Peterw42  Thanks a lot for explaining again, with your help I think I am starting to understand.

 

Let me please explain why I got things so wrong.

My problem was that I was mislead when talking with my French speaking Swiss friend some time ago. Not intentionally as his English was OK but not perfect and I cannot speak French. He bought a property with his Swiss wife for 4 or 5 Million baht, but he never talked about “property” he just said that he paid for a 30 year lease on the land. I think he even said that the land was worth 1 Million but 600,000 was entered to save tax. He was a bit foolish as he did not employ a lawyer and also just signed the contracts at the Land Registry office without reading them, he just trusted the estate agent I think. I now also think that he did not fully understand.

He was having a lot of trouble, basically the original Thai land owner sold the land to another Thai person. I now believe that it should be worded property and not land and the freehold to the property (land and house) was sold.

I think it was actually planned by the new Thai property owner as he saw that the contract was incorrect, a lower value entered to save tax. He wanted to buy my friends property for a cheap price. After many court visits my friend had to agree on a settlement and he said that he lost about 1 Million baht.

My confusion has been because my friend said the land owner entered a lower figure for leasing the land for 30 years thus saving only about 25,000 baht. He first offered to pay the court this 25,000 baht and explained all he was guilty of was not reading the contract but the court did not accept this.

I’m just writing this to explain why I have been so confused.

 

Now with your help I realise the above was wrong.

 

Now I think I am starting to understand that because my friend was buying an already built property, a Thai man owned the property (land and house) freehold and my Swiss friend signed a 30 year lease for this property.

 

Phew! Am I starting to understand now?

Thanks again for your help.

Just buy a condo, so many suckers build a house on their fake WAG land, in some god forsaken place, what could go wrong...

19 hours ago, Keith5588 said:

@Will B Good The sale of my house is not complete, my Title Deed plan needs to be updated, it's been an annoying delay. Concerning CGT, I'm sorry but that is something I also do not know, I have been told that CGT will be very small or maybe nothing as I have owned the house for over 45 years and it has been my only home.

Example....

 

1.  Owned for 45+ years: You qualify for PRR on the entire period you lived there as your main residence.

2.  Rented out for last 7 years: This portion may be partially taxable.

3.  PRR rules (2025):

  ⁠◦  You get full relief for the years you lived there.

  ⁠◦  You also get relief for the final 9 months of ownership, even if you weren’t living A there.

4.  Letting Relief:

  ⁠◦  This used to be generous, but since April 2020, it only applies if you were living in the property at the same time as the tenant (e.g., a lodger).

  ⁠◦  If you moved out and rented the whole property, Letting Relief likely doesn’t apply A anymore

 

Your questions are common. Leasing land in Thailand works like this:

 

You lease the land. You do not own the land. A lease gives you possession and use for the period you register, maximum 30 years under Thai law. The Land Code and Civil and Commercial Code set that limit. Renewals are possible in practice, but not guaranteed. A promise to renew is only contractual. It does not bind the land office. Especially since the last Supreme Court decision. (Available on ThaiLaw Online).

 

About the house. By default, a house follows the land. If you build a house on land you do not own, the house becomes part of the land unless you create a legal separation. Thailand allows separation of ownership through a superficies (สิทธิเหนือพื้นดิน). That gives you ownership of the structure separate from the land. With a superficies, you own the house, and the landowner owns the land. You can remove the structure at the end, or sell it, if the contract allows. Without a superficies or a clear agreement to separate the house from the land, you do not own the house long-term.

So yes, your instinct is correct. Without proper structure, after 30 years you hold nothing. Simple lease equals temporary use. Some developers market this as ownership. It is not ownership in law.

 

A house can be separated from land by contract, also by building permit. But many people don't do that. 

 

Value after 15 years. The market looks at the remaining term. Most buyers pay based on time left, quality of the property, and the chance of a renewal. A lease that started at 30 years and now has 15 left will have lower value. Hard to predict exact numbers. Many buyers discount steeply once a lease falls below 20 years. Renewals help but never guaranteed.

 

Renewal payments. If a new lease is granted, the landowner receives the new lease payment. You only receive money if you sell your leasehold rights and your house rights (if separated). Without separation, you hold a right to occupy, not to own.

After 29.9 years. You talk with the landowner. If the owner refuses a new term, your right ends. If you have a superficies, your house remains yours, and you have a right to remove it at the end. Removal of a townhouse in a row is not practical, which shows the problem. Without superficies, the house belongs to the landowner at the end. You can actually register a new lease 3 years before it ends according again to Sebastien from ThaiLaw Online who has the most knowledge and experience I know with real estate in Thailand. 

 

A lease is not ownership. Sap Ing Sith is different but limited to 30 years. And more expensive.  Treat it like paying rent upfront for 30 years. If you want protection, structure it properly:

• 30-year lease registered at the land office

• Superficies for the building

• In some cases, a usufruct or mortgage on the land for extra protection

We see many foreigners who did not structure things correctly and faced problems later. Do it correctly at the start, and do it with someone who deals with property in Thailand daily. You protect yourself, your partner, and your investment.

 

For more information, read our guide under “usufruct agreement in Thailand” or “property lawyer in Bangkok” on ThaiLaw Online.

 

Read also about "Reciprocal agreements". Nobody writes about that here. Very interesting.