Foreign nationals can legitimately secure their possession and usage of a plot of land in Thailand through the following methods:
1. Leases
The most common way for a foreigner to acquire a property is by way of leasehold in which a land owner can lease his house to a foreigner for a maximum period of 30 years. Upon the expiration of 30 years, the owner can upon his discretion renew the lease for an additional 30 years, as concurrent renewal periods do not exist in Thailand.
If a lease is made for a period longer than 3 years, the lease needs to be registered at the relevant land department in order to be considered valid and to create an encumbrance on the land.
Standard lease contracts are provided by the land department in Thai language, however in order to ensure that all rights of both the lessor and the lessee are covered, it is suggested that a lease contract be drafted in English with a Thai translated version attached. The cost for registration of a lease is approximately 1.1% of the lease value. It is also suggested that a lease include the lessee’s family members as co-lessees in order to ensure that upon the lessee’s demise, the lease will be transferred to them. Particulars of the lease period and the names of the parties are then outlined on the back of the title deed on which the lease is based. Even upon the death of the lessor, the lease is registered and attaches to the land.
2. Habitation
The right of habitation grants to an individual or an entity the right to occupy a building and land only for living purposes without paying rent, otherwise it becomes a lease.
The right of habitation can be granted for maximum 30 years and may be renewed for periods not exceeding 30 years. This right is not transferable by way of inheritance.
The grantor is not bound by the obligation to maintain the property in a good state. If the grantee brings improvements to the property, he cannot claim reimbursement of these expenses.
3. Superficies
In Thailand a foreigner is in generally not allowed to own land. The law does not specify any restrictions on building ownership, so a foreigner can be the owner of a house.
The right of superficies is a right granted by a land owner to an individual or an entity to build upon his land and consequently, own the structure built upon the land. No ownership rights are obtained over the land itself.
The registration of the ownership of the house will be made separately from to the registration of the ownership of the land. The document issued by the Land Department for the house is not a title deed and cannot be enforced against third parties.
This right is not transferable by way of inheritance.The right of superficies may be granted for maximum 30 years, for the lifetime of the owner of the land or for the lifetime of the superficiary. Superficies are registered at the relevant land department located in the same area the land is located and is outlined on the title deed on which the land is based.
Taxes are to be paid by the grantee for the whole period of the superficies, despite the fact that there may not be any structure erected on the land or even if such structure is damaged and not in use.
This right is transferable to a third party only with the approval of the land owner. The land owner at any point during the grant period may also charge rent from the grantee, however a notice of at least one year must be given either to pay such rent or to terminate the superficies.
If the land owner sells the land, the new land owner can ask the superficiary to remove the house in exchange for removing fee.
4. Usufruct
A usufruct provides limited property rights, to use and enjoy another person’s immovable property, including the fruits or benefits of property. A usufruct is registered on the title document. It may be created either for a specified period, not exceeding 30 years, or for the life of the beneficiary of the usufruct (usufructuary), and may not be inherited. This right can be granted with or without asking for a payment.
The property may not be damaged or altered in any way by the usufructuary. He must keep the property intact and is responsible for the costs of maintenance of the property, for paying taxes and duties, and for interest payable on debts charged to it. If the owner requires, the usufructuary shall pay an insurance in favor of the owner for the whole duration of the usufruct.
This right is not transferable by way of inheritance.The usufructuary is allowed to lease or rent out the land in exchange for a payment. He may also transfer his rights to the usufruct to a third party, but he will be responsible for the damages caused by the third party.
The usufructuary has no power to prohibit the owner from selling the property without damaging the usufruct. Therefore, no consent is required from the usufructuary if the owner wants to sell the property. However, the usufruct is a real right that remains valid for any third party, including a new owner. In the case of any transaction which damages the usufruct, the usufructuary can file an objection or force the receiver to register the usufruct.