Land Purchase /lease

[eddienlynne]

hi guys

we are new to the forum & would like to ask you out there who have obviously experienced what we are about to.

we are a couple of farangs that are looking to purchase some land in hua hin and hope to build on it eventually.

we have been told that you cannot buy and own the land outright, but have to lease the land on a maximum 30yr lease?

could you please advise us on this?

if it is the case that the only way is to lease the land, what happens when the 30yr lease is up?

do you then have to re- lease the land?

if so at what cost would the re-lease be?

is it likely to be the same price as the original lease?

any light you can shed on this matter would be much appreciated

many thanks eddienlynne

[johnnyk]

hi guys

we are new to the forum & would like to ask you out there who have obviously experienced what we are about to.

we are a couple of farangs that are looking to purchase some land in hua hin and hope to build on it eventually.

we have been told that you cannot buy and own the land outright, not in your own name but have to lease the land on a maximum 30yr lease?

could you please advise us on this?

if it is the case that the only way is to lease the land, what happens when the 30yr lease is up? you negotiate a new one, if the landowner is willing

do you then have to re- lease the land? yes

if so at what cost would the re-lease be? whatever you negotiate with the owner

is it likely to be the same price as the original lease? who knows? its 30 years down the road. i suspect it would be more, put yourself in the owner's shoes.any light you can shed on this matter would be much appreciated

many thanks eddienlynne

[keeniau96]

There will be others more expert than I am, but a common lease form is the 30-years, but a 30+30+30 lease has been around for some years now. That's the original 30 with options to renew. But the options are a weak crutch, subject to the owner being alive, etc. The 30-year lease will be registered at the land office, giving you good protection for the first 30 years, but the options will not be filed there. Some advisors suggest that the owner include the option provision in his/her will, which is again quite weak, subject to will revision, codicils, etc. that you will never know about.

[johnnyk]

There will be others more expert than I am, but a common lease form is the 30-years, but a 30+30+30 lease has been around for some years now. That's the original 30 with options to renew. But the options are a weak crutch, subject to the owner being alive, etc. The 30-year lease will be registered at the land office, giving you good protection for the first 30 years, but the options will not be filed there. Some advisors suggest that the owner include the option provision in his/her will, which is again quite weak, subject to will revision, codicils, etc. that you will never know about.

Many previous TV posts on this. 30+30+30 is NOT recognized or registered by the Land Office.

Therefore it is <deleted>, a creation of falang realtors to separate gullible falang from $$$.

Anything beyond the first 30 is a personal agreement that would not be binding on heirs or successors. All that has to be done to screw Joe Bloggs is for the owner to sell the land to his brother-in-law two weeks before the 30 years is up. Oh, you can go to court about it.... great idea when you are 84 years old and your home has just disappeared.

[InterestedObserver]

IAW the Civil and Commercial Code you can lease land for a maximum of 30 years at a time, anything longer than 3 years must be registered at the local land office who will record the lease on the back of the Chanote (land title) document. Any options to renew, 30+30 for example, are subject to renegotiation at the time of renewal. A lot can change after 30 years; the original owner can die, sell the land, substantially increase the price, or change his mind and want his land back. You are correct, foreigners cannot own land in Thailand.

Edited November 21, 2009 by InterestedObserver

[eddienlynne]

IAW the Civil and Commercial Code you can lease land for a maximum of 30 years at a time, anything longer than 3 years must be registered at the local land office who will record the lease on the back of the Chanote (land title) document. Any options to renew, 30+30 for example, are subject to renegotiation at the time of renewal. A lot can change after 30 years; the original owner can die, sell the land, substantially increase the price, or change his mind and want his land back. You are correct, foreigners cannot own land in Thailand.

many thanks for your reply and take on board what you say,

when the renewal of the lease is due does this mean the land owner then owns everything on the land as well? ie if you have built a house etc.

regards eddienlynne

[eddienlynne]

hi guys

we are new to the forum & would like to ask you out there who have obviously experienced what we are about to.

we are a couple of farangs that are looking to purchase some land in hua hin and hope to build on it eventually.

we have been told that you cannot buy and own the land outright, not in your own name but have to lease the land on a maximum 30yr lease?

could you please advise us on this?

if it is the case that the only way is to lease the land, what happens when the 30yr lease is up? you negotiate a new one, if the landowner is willing

do you then have to re- lease the land? yes

if so at what cost would the re-lease be? whatever you negotiate with the owner

is it likely to be the same price as the original lease? who knows? its 30 years down the road. i suspect it would be more, put yourself in the owner's shoes.any light you can shed on this matter would be much appreciated

many thanks eddienlynne

thanks for taking time out to reply & take on board what you have commented on

being a couple of naive farangs does this also mean that the land owner then owns everything that remains on his/her land? ie if you have constructed a house etc

regards eddienlynne

[InterestedObserver]

IAW the Civil and Commercial Code you can lease land for a maximum of 30 years at a time, anything longer than 3 years must be registered at the local land office who will record the lease on the back of the Chanote (land title) document. Any options to renew, 30+30 for example, are subject to renegotiation at the time of renewal. A lot can change after 30 years; the original owner can die, sell the land, substantially increase the price, or change his mind and want his land back. You are correct, foreigners cannot own land in Thailand.

many thanks for your reply and take on board what you say,

when the renewal of the lease is due does this mean the land owner then owns everything on the land as well? ie if you have built a house etc.

regards eddienlynne

If you get a building permit and register the house in your name on leased land, the house legally is yours. You would be free to remove it, bulldoze it, or sell it to the land owner at the end of the lease period. At the end of the lease period, unless renewed, you would have to vacate the land.

[eddienlynne]

IAW the Civil and Commercial Code you can lease land for a maximum of 30 years at a time, anything longer than 3 years must be registered at the local land office who will record the lease on the back of the Chanote (land title) document. Any options to renew, 30+30 for example, are subject to renegotiation at the time of renewal. A lot can change after 30 years; the original owner can die, sell the land, substantially increase the price, or change his mind and want his land back. You are correct, foreigners cannot own land in Thailand.

many thanks for taking time out to respond to our question & we take on board what you say.

being a couple of naive farangs, would this mean at the end of the land lease the land owner would then own everything on the land as well?

ie if you had constructed a house etc? would he /she then legally own this?

[Beryl]

IAW the Civil and Commercial Code you can lease land for a maximum of 30 years at a time, anything longer than 3 years must be registered at the local land office who will record the lease on the back of the Chanote (land title) document. Any options to renew, 30+30 for example, are subject to renegotiation at the time of renewal. A lot can change after 30 years; the original owner can die, sell the land, substantially increase the price, or change his mind and want his land back. You are correct, foreigners cannot own land in Thailand.

many thanks for taking time out to respond to our question & we take on board what you say.

being a couple of naive farangs, would this mean at the end of the land lease the land owner would then own everything on the land as well?

ie if you had constructed a house etc? would he /she then legally own this?

Get a lawyer to draw up a superficies agreement whereby you own the house and after thirty years the landowner has to buy the land and the house at the market value of the day OR renew the lease.

[eddienlynne]

IAW the Civil and Commercial Code you can lease land for a maximum of 30 years at a time, anything longer than 3 years must be registered at the local land office who will record the lease on the back of the Chanote (land title) document. Any options to renew, 30+30 for example, are subject to renegotiation at the time of renewal. A lot can change after 30 years; the original owner can die, sell the land, substantially increase the price, or change his mind and want his land back. You are correct, foreigners cannot own land in Thailand.

many thanks for taking time out to respond to our question & we take on board what you say.

being a couple of naive farangs, would this mean at the end of the land lease the land owner would then own everything on the land as well?

ie if you had constructed a house etc? would he /she then legally own this?

Get a lawyer to draw up a superficies agreement whereby you own the house and after thirty years the landowner has to buy the land and the house at the market value of the day OR renew the lease.

hi there

many thanks once again for your much valued info,

Sorry to be a pain but hope you don't mind me asking what is a superficies agreement?

can you give us as much info on what you know about our situation from the original question please.

we are both very keen to build a new life for ourselves but are just worried that if we do, by the time the land lease is up we would both be around the 80's years of age and end up in a predicament where we would not be able to afford to renew the land lease and therefore would have lost everything we had worked on over the previous 30 yrs.

your time taken to respond to our questions is very much appreciated.

kind regards eddienlynne

[donx]

Another option (which may be the same thing as a superficies) is a usufruct which has the advantage of being able to be applied for the life of those on the usufruct. So since I believe you are two farang, both of you could be listed as having usufruct rights to the land as long as either one of you are alive. In this case though, the usufruct couldn't be left in a will. But if you have an heir in mind, that person or persons could also be listed on the usufruct. You can even obtain a usufruct for a set period of time (up to 30 years I think) just like you can a lease. I suggest you use the search feature in this forum. There have been many threads in here discussing the various methods of having some control over land and two such methods are usufructs and leases.

[stgrhe]

You can even obtain a usufruct for a set period of time (up to 30 years I think) just like you can a lease.

The usufruct can be for life or a period of time which shall not exceed 30 years. In case of the latter should the usufruct agreement be for a longer period than 30 years it will be reduced to the said 30 years by the land office.

[stgrhe]

With regards to the the leasing period, this is what Section 540 of the Civil and Commercial Code says:

" The duration of a hire (lease in our case as there is no specific law for leasing) of immovable property cannot exceed thirty years. If it is made for a longer period, such period shall be reduced to thirty years. The aforesaid period may be renewed, but must not exceed thirty years from the time of renewal".

Please observe the wording "... may be renewed, ...". "May" is in legal terms a rather wage definition of something that might be possible but cannot be guaranteed.

However, provided the lease agreement is properly worded and the lease is duly registered the lease holder can sit still in the boat for 30 years, but the use a good lawyer for the lease agreement is always recommended since the wording need to be precise.

[benchmark]

IAW the Civil and Commercial Code you can lease land for a maximum of 30 years at a time, anything longer than 3 years must be registered at the local land office who will record the lease on the back of the Chanote (land title) document. Any options to renew, 30+30 for example, are subject to renegotiation at the time of renewal. A lot can change after 30 years; the original owner can die, sell the land, substantially increase the price, or change his mind and want his land back. You are correct, foreigners cannot own land in Thailand.

many thanks for taking time out to respond to our question & we take on board what you say.

being a couple of naive farangs, would this mean at the end of the land lease the land owner would then own everything on the land as well?

ie if you had constructed a house etc? would he /she then legally own this?

You can get comprehensive information on this topic on this website Link

[CDNinKS]

What about the lease agreement itself? Is it necessary to go to a lawyer to have it drawn up or is there a standard form available.

Thanks for that link Benchmark.....very good info. About the tax payable, I'm a bit confused. It says that Owner-occupied residences are exempt from Building and Land tax for the first property. Is that referring to the land owner or the building owner?

My situation is the same as a lot of people I'm sure. The land is in my wife's name, but to protect myself against any unforeseen future developments, I want a 30 year lease and the house in my name. What taxes/fees will I be expected to pay when we register the lease?

[stgrhe]

What about the lease agreement itself? Is it necessary to go to a lawyer to have it drawn up or is there a standard form available.

You should be careful of using any standard forms as the wording of the lease agreement is very important. Use a lawyer but not anyone recommended by the builder/seller/developer.

My situation is the same as a lot of people I'm sure. The land is in my wife's name, but to protect myself against any unforeseen future developments, I want a 30 year lease and the house in my name. What taxes/fees will I be expected to pay when we register the lease?

If you have a This wife you really should consider a usufruct instead of a lease. The usufruct can be signed for life or for a period of up to 30 years, but if you have another younger relative, e.g. a child from a previous marriage, his/her name can also be added and then the usufruct will be valid until the last one of your or he/she passes if the life option has been chosen.

However, there have been reports that a few land offices, Ban Chang being one, has refused to honour the usuftuct although it is perfectly legal and in accordance to Thai laws.

[ajazza]

Hi there,

I have a quick question related to this as well. If I was to lease land and build a house on the land - can the property be solely in my name (I am obviously a farang). I was under the impression that a farang can not own a house either - or is this just the case when the land is freehold.

Thanks

Adam

[stgrhe]

Hi there,

I have a quick question related to this as well. If I was to lease land and build a house on the land - can the property be solely in my name (I am obviously a farang). I was under the impression that a farang can not own a house either - or is this just the case when the land is freehold.

Thanks

Adam

Yes, you can own the house but there is no specific title document for that. You should have a lease, a usufruct or a superficies on the land and the ensure that the agreement for the house construction and the payment therefore is in your name. Then the building permit should also be applied for in your name.

If it is an existing house then the procedure is a little bit more complicated but the house can nevertheless be "separated" from the land and you become the owner of the house.

[thefalang]

There will be others more expert than I am, but a common lease form is the 30-years, but a 30+30+30 lease has been around for some years now. That's the original 30 with options to renew. But the options are a weak crutch, subject to the owner being alive, etc. The 30-year lease will be registered at the land office, giving you good protection for the first 30 years, but the options will not be filed there. Some advisors suggest that the owner include the option provision in his/her will, which is again quite weak, subject to will revision, codicils, etc. that you will never know about.

Many previous TV posts on this. 30+30+30 is NOT recognized or registered by the Land Office.

Therefore it is <deleted>, a creation of falang realtors to separate gullible falang from $$$.

Anything beyond the first 30 is a personal agreement that would not be binding on heirs or successors. All that has to be done to screw Joe Bloggs is for the owner to sell the land to his brother-in-law two weeks before the 30 years is up. Oh, you can go to court about it.... great idea when you are 84 years old and your home has just disappeared.

I agree 100%. You summed it up good.

All these people who purchased a 30-yr leasehold estate 20-yrs ago (for the same amount as what a fee simple interest would have cost) are now realizing that their equity is quickly losing value. Instead of having a substantial equity build-up from 20-yrs of appreciation, they're holding property that they cannot sell and will revert to the Thai owner in a mere 10-years. It's sad.

It's a great way for the Thais to secure a retirement fund, they can literally sell the property twice. It reverts back to them in 30-yrs at a substantially increased value and they sell it again. Oh, the best part is that the land owner also owns the house that you built on the property too!

Edited November 27, 2009 by thefalang

[stgrhe]

Oh, the best part is that the land owner also owns the house that you built on the property too!

Not really, the land owner can buy the house at an agreed price, failing that the house owner can do whatever he likes with the house before the land lease expires.

[pkrv]

Oh, the best part is that the land owner also owns the house that you built on the property too!

Not really, the land owner can buy the house at an agreed price, failing that the house owner can do whatever he likes with the house before the land lease expires.

You mean threaten to demolish it, or else.

Leasehold is dead simple you rent someting up front. In this case for 30 years. After that please go away, otherwise I will call the police.

[thefalang]

Oh, the best part is that the land owner also owns the house that you built on the property too!

Not really, the land owner can buy the house at an agreed price, failing that the house owner can do whatever he likes with the house before the land lease expires.

That probably depends on how the lease is written. Many leases stipulate that any improvements made by lessee become property of lessor upon expiration of the lease. I believe that a foreigner lessee would encounter problems should he wish to demolish improvements just prior to the land lease expiration. Who knows!!!

[stevejones123]

Why isn't there a large market for prefabs in Thailand. surely they'd be able to last the thirty years of the lease?

[johnnyk]

You can own the house separate from the land. If you plan to build then the building permit in your name proves ownership otherwise register the house in your name at the land office.

When the lease is up the landowner is supposed to offer you market value of the house should he not want to renew the lease.

This is fine, en principe as the French say. The reality is how do you get it done?

You could end up as an old man in a Thai court or if you want to sell it to the landlord at the end of lease he has you by the short and curlies.

Edited November 27, 2009 by johnnyk

[johnnyk]

There will be others more expert than I am, but a common lease form is the 30-years, but a 30+30+30 lease has been around for some years now. That's the original 30 with options to renew. But the options are a weak crutch, subject to the owner being alive, etc. The 30-year lease will be registered at the land office, giving you good protection for the first 30 years, but the options will not be filed there. Some advisors suggest that the owner include the option provision in his/her will, which is again quite weak, subject to will revision, codicils, etc. that you will never know about.

Many previous TV posts on this. 30+30+30 is NOT recognized or registered by the Land Office.

Therefore it is <deleted>, a creation of falang realtors to separate gullible falang from $$$.

Anything beyond the first 30 is a personal agreement that would not be binding on heirs or successors. All that has to be done to screw Joe Bloggs is for the owner to sell the land to his brother-in-law two weeks before the 30 years is up. Oh, you can go to court about it.... great idea when you are 84 years old and your home has just disappeared.

I agree 100%. You summed it up good.

All these people who purchased a 30-yr leasehold estate 20-yrs ago (for the same amount as what a fee simple interest would have cost) are now realizing that their equity is quickly losing value. Instead of having a substantial equity build-up from 20-yrs of appreciation, they're holding property that they cannot sell and will revert to the Thai owner in a mere 10-years. It's sad.

It's a great way for the Thais to secure a retirement fund, they can literally sell the property twice. It reverts back to them in 30-yrs at a substantially increased value and they sell it again. Oh, the best part is that the land owner also owns the house that you built on the property too!

Yup. That's why I went the company route. It ain't perfect but IMO better then leasing if done right. I would have taken a lease if it was 50 years or more but 30 is very short.

Edited November 27, 2009 by johnnyk

[cangetman]

Hi Guys the text below from Thai Law no rubbish it does not matter what any one says it is 100% true , to start off with you can not own land 100% under any circumstances as a farang forget it and anyone who tells you that you can is simply lying to you or does not have a clue . There is one exception but lookslike a complete waste of time.

<H3 align=justify>

Land ownership by foreign individuals</H3>The Thai government created one exception to the rule in the Land Code Amendment Act B.E. 2542 (1999) (section 96 bis Land Code Act) allowing foreigners to acquire 1 Rai (approx 1600 sq.m) for residential purposes. Under the amendment Act granting permission is subject to the permission of the Minister of Interior and among other rules and restrictions (location) requires the foreigner to remit not less than 40 million Baht (approx 800,000 EURO) into Thailand for specific investment purposes approved by the Board of Investment (BOI approval) beneficial to Thai economy for a specific period of time (in addition to the investment in the real estate property). This is not a viable option for foreign individuals and the exception to the rule was invoked to enable foreign embassies and multi nationals to purchase large houses for their ambassadors and CEO's).

--------regulation-------

Requirements to be granted the right to acquire 1 Rai with permission of the Minister of Interior: the land to be purchased shall be not more than 1 rai in area, and the following rules and conditions must be met:

1. Bringing money not less than Baht forty million into the Kingdom for investment and maintaining the investment not less that three years; 2. Permission must be obtained from the Minister of Ministry of Interior; 3. Money brought into the Kingdom shall be invested in one of the following businesses or activities; 3.1to purchase bonds of Thai Government, bonds of Thai National Bank, bonds of State Enterprise or bonds which the Ministry of Finance secures the capital or interest, 3.2 an investment in a property mutual fund, a property mutual fund or a mutual fund for resolving financial institution problems established under the law on Securities and Stock Exchange, 3.3an investment in share capital of a juristic person who is granted permission of investment under the law on promotion of investment, 3.4 an investment in an activity as declared by the Board of Investment to be an activity eligible to be granted promotion of investment under the law on promotion of investment; 4. the land to be acquired shall be located in Bangkok Metropolis, Pattaya City , or Tessaban (Municipality), or in the area specified as residential zone according to the law on Town and Country Planning and shall not be located in a military safety zone according to the law on Military Safety Zone;

[rufanuf]

Hi Guys the text below from Thai Law no rubbish it does not matter what any one says it is 100% true , to start off with you can not own land 100% under any circumstances as a farang forget it and anyone who tells you that you can is simply lying to you or does not have a clue . There is one exception but lookslike a complete waste of time.

<H3 align=justify>

Land ownership by foreign individuals</H3>The Thai government created one exception to the rule in the Land Code Amendment Act B.E. 2542 (1999) (section 96 bis Land Code Act) allowing foreigners to acquire 1 Rai (approx 1600 sq.m) for residential purposes. Under the amendment Act granting permission is subject to the permission of the Minister of Interior and among other rules and restrictions (location) requires the foreigner to remit not less than 40 million Baht (approx 800,000 EURO) into Thailand for specific investment purposes approved by the Board of Investment (BOI approval) beneficial to Thai economy for a specific period of time (in addition to the investment in the real estate property). This is not a viable option for foreign individuals and the exception to the rule was invoked to enable foreign embassies and multi nationals to purchase large houses for their ambassadors and CEO's).

--------regulation-------

Requirements to be granted the right to acquire 1 Rai with permission of the Minister of Interior: the land to be purchased shall be not more than 1 rai in area, and the following rules and conditions must be met:

1. Bringing money not less than Baht forty million into the Kingdom for investment and maintaining the investment not less that three years; 2. Permission must be obtained from the Minister of Ministry of Interior; 3. Money brought into the Kingdom shall be invested in one of the following businesses or activities; 3.1to purchase bonds of Thai Government, bonds of Thai National Bank, bonds of State Enterprise or bonds which the Ministry of Finance secures the capital or interest, 3.2 an investment in a property mutual fund, a property mutual fund or a mutual fund for resolving financial institution problems established under the law on Securities and Stock Exchange, 3.3an investment in share capital of a juristic person who is granted permission of investment under the law on promotion of investment, 3.4 an investment in an activity as declared by the Board of Investment to be an activity eligible to be granted promotion of investment under the law on promotion of investment; 4. the land to be acquired shall be located in Bangkok Metropolis, Pattaya City , or Tessaban (Municipality), or in the area specified as residential zone according to the law on Town and Country Planning and shall not be located in a military safety zone according to the law on Military Safety Zone;

Absolutely correct....so options are:-

1. Have a company - which means the company can own the land, but as a farang you can't own the company outright, and besides if the authorities decide a company was set up for the purpose of buying land you could have it confiscated.

2. Take a 30 Year lease with or without a cluase for renewal, which may or may not be honoured

3.Have Usufruct. The advantage of a Usufruct is that is for the lifetime of the beneficiary...however in the event the Usufruct has been in force for over 30 years and their is a dispute between landowner and Usufruct holder the agreement could be contested and revoked by a Thai land department or court.

Basically the system is watertight, you cannot own land in Thailand, which is why it is important that anyone entering into a Thai "Property Investment" needs to be able to justify the investment to themselves over and above anyone else.

The only sure way to retain control (if not ownership) over land is.....there isn't one. Things have to be done on trust thats it...and who knows if you have done your homework things may work out for long enough for you to reap the benefit you envisaged. If your unlucky you w'ont.

PS the 14 Rai is still for sale!