Buying land in Thailand in 2021, the complete guide
Moving to Thailand is a dream that many travelers cherish. Each year, more and more of you take the step, attracted by a quality of life and a change of scenery that you tend not to find in your home country. Hence the desire to buy a piece of land in order to build the home of your dreams.
However, buying land in a foreign country, especially Thailand, is not a decision to be taken lightly. It is important to get informed before committing yourself to anything, but above all, it is essential to surround yourself with people who are competent in this matter. Therefore, the help of a good lawyer is essential, even if it is only to verify administrative documents and to accompany you safely throughout the purchasing process.
According to the Thai Civil and Commercial Law, foreigners have the same rights as Thai citizens, but under the Domain Act “B.E. 2497” of 1954, it is prohibited for a foreigner to own land in Thailand. Since ownership of land is an essential element in real estate investment, it follows that an apartment located in a building registered under the condominium license is the only way for a foreigner to own property in Thailand in his or her own name.
Understand the different types of property titles
Overall, there are 7 main Property Titles in Thailand that are used as evidence of ownership of land, rights of possession or other interests in land.
As a foreigner wishing to acquire property in the Kingdom, you only need to consider land with a Title deed “Chanote”, “Nor Sor 3 Gor” and “Nor Sor”. These can be bought, rented and used as mortgage collateral. These are the only titles on which a Property Right or Lease can be registered. These Titles are also required to obtain a Building Permit.
Watch out! Only the “Chanote” and the “Nor Sor Sam Gor” are the Titles of Property on which registered rights of ownership or lease may exist, and therefore the only ones that a ( cautious ) foreigner should take into consideration when buying, selling or leasing land. Always ask to see a copy of both sides of the land title. A translation will be unavoidable (all administrative documents are in Thai), but it will help to know who the current owner is, if the land has all legal approvals, its shape, surface, orientation, as well as the neighborhood or public environment (road, river, ocean…).
The “Chanote” is the Title deed that offers the most guarantees in Thailand. It certifies that the parcel of land has been precisely identified by a public cadastral survey. The lot has been surveyed and certified accurate nationwide by the Land Department. It is by far the most commonly used, safest and most recommended type of property in the Kingdom. This document certifies that the holder of this certificate has the right to use his property as he wishes: it can be sold, rented, used as a mortgage…
If you have the opportunity to visit the lot you are interested in, a simple check consists of looking for the presence of bollards or red posts at the corners of the lot. Each post must then have a unique identification number. If you note the presence of such bollards, the lot is highly likely to have a “Chanote”. It is advisable, in all cases, to ask for a copy of the Title deed and to turn to a lawyer to ensure its authenticity with the local land department.
“Nor Sor 3 Gor”
Apart from the “Chanote”, the “Nor Sor Sam Gor” is the only Property Title that is worth considering for a quiet purchase. It certifies that the person named on the certificate has a legally recognized right of possession over the land. It will thus be possible for you to upgrade the title to obtain a “Chanote” (change from a right of possession to a right of ownership). The existence of a “Nor Sor Sa Gor” implies that the land has been surveyed and a cartographic statement has been drawn up by the public authorities. The parcels adjacent to the lot are also represented in the plan, drawn up at a scale of 1:5000.
When writing the title, the boundaries of the plot are written on the document, as well as the precise distance between each one. Although the surveys used as a basis for the “Nor Sor Sam Gor” are less secure than for the “Chanote”, many real estate developers prefer to stick to the “Nor Sor Sam Gor” first, for the good reason that it is not necessary to ask for authorization from the “Land Department” to subdivide the land into plots, contrary to the “Chanote” for which this procedure is mandatory. This freedom offers more flexibility to developers during the initial planning phase. Once the project is completed, it is still possible for owners to individually convert their land title “Nor Sor Sam Gor” into “Chanote”.
Watch out! Plots with a “Nor Sor Sam Gor” can be sold, rented or mortgaged. Before the transfer, the intervention of an attorney is therefore essential to ensure that the title is not pledged and that no other Third Party can assert a right on it. On the other hand, if you hold this type of certificate, you are not allowed to leave the land fallow for more than 12 years, you must obligatorily cultivate your land or build on it before the expiry of this period.
Here are the other documents you may encounter. These are not full title documents and you should not consider buying land that has only these papers. In all cases, we recommend that you seek the services of a lawyer.
“Nor Sor 3”
Similar to the “Nor Sor Sam Gor”, it can, nevertheless, become an inexhaustible source of trouble. This type of certificate is issued when the owner has not met all of the requirements to assert a right to possession. Thus, before any modification or transfer of the land is registered, it will be mandatory to have a legal publication carried out. Anyone who has grounds for opposing the registration may assert their rights for 30 days, at which time disputes may arise. In addition, this certificate is issued without any reference to adjacent parcels, which may encourage neighbourhood disputes.
“Nung Kor Sor”
This certificate recognizes that the person currently enjoys the land, but does not confer any ownership rights to it. The land attached to these documents cannot be legally bought or sold. Possession is exclusively transferred by inheritance in direct descent.
“Kor Sor 1”
This is a form used to claim private ownership of land from the Thai government. In force since 1954, it serves as a basis for verifying claims on a given piece of land. In case of success in the process, it can lead to the issuance of a “Nor Sor Sam Gor”. It is not a land title and does not carry any right of ownership or use.
“Por Bor Tor 6”
This document results solely from the attribution to the land of a tax identification number. The tax is then due on all income from the land. It does not in any way constitute a title deed, an acknowledgement of possession, or a right of usufruct. It only means that the parcel has been listed as taxable on the income of the person claiming the certificate.
“Tor Bor 5” ou “Tor Bor 6”
Very popular in Thailand, it is a plot of land allocated by the Royalty to many locals to develop agriculture. Official documents do not allow the construction of “hard” buildings (cement or concrete) on the land, but simply wooden houses for farmers.
This type of real estate is only allowed for the development of agriculture (and nothing else!) after official authorization from the “Land Department” and the municipal administration of the region concerned. It cannot be sold to a Third Party, but can be rented out (despite everything, many “lessors” of this land find buyers by devious means). This Title deed is transmissible by inheritance. Often magnificent and offered at incredible prices, these lands are very sought after by expatriates (especially through their Thai spouse) and locals.
However, all reputable lawyers will advise against buying them because they are a problem. Once again, these lands belong to the royal authorities, who can recover their property overnight without any compensation.
Measurement Units in Thailand
1 Hectare = 6, 25 Rai
1 Acre = 2, 5 Rai
1 Rai = 1 600 sqm = 4 Ngan
1 Ngan = 400 sqm = 100 Talang Waa
1 Talang Waa = 4 sqm
1 Waa = 2 m
Dangers to avoid in case of Land Purchase
The Access Road
How many foreigners felt completely helpless and lost because they had no access road to reach their land. Sometimes the properties are far from the main road and one has to cross several plots owned by locals before accessing one’s estate. This means that you have to ask permission to use these private crossings to build an access road or even to have a right of way, and that’s where the problems begin!
Most of the time, the neighborhood accepts graciously, but sometimes some of the more shrewd locals ask you for a lot of money (up to 1 million baht or more!) to get access to their path. And this just for a few meters borrowed… In this case, either you are forced to pay or you find a compromise. Of course, everything must be written down in black and white in a contract with the lawyer (with especially the authorization A VIE of a right of way for you, your company, your descendants and the future managers of your company in the event that you would be led (e) to sell your land).
Also, before you buy your property on Bangkok, Koh Samui, Phuket, Hua Hin, Chiang Mai or Pattaya, do some site surveys and ask your Thai lawyer to do some research to find out what constraints and easements you might face. Often the owner of the land, knowing the problem, will not tell you anything during the negotiations… unless asked.
What about electricity! In case your land has no electrical connection, it will be entirely at your charge: electricity poles, cables, transformer, meter… The note often turns out to be very salty! Up to several tens of thousands of euros! (depending on the length of the line to be built). 2 options are available to you:
The private power line with the creation of a low voltage line. The cost is usually a few hundred thousand Baht. Thereafter, maintenance is your responsibility and in case of technical problems (damaged cable, overturned pole …), you will have to pay the bill personally. And don’t count on the neighbors to help you, they won’t do anything about it. Being your property, nobody has the right to connect to your line, because it belongs to you personally or to your company.
The public power line with the creation of a high-voltage line. The cost can vary from a few hundred thousand Bahts to several million Bahts (depending on the length of the line)! The line does not belong to you, even if you have paid in full. However, in the future, it will be up to the Thai public electricity company to take care of maintenance and technical incidents. You will not have to pay anything more, except for your private power transformer, based on your land, in case of a problem. Finally, because it is a public line, neighbors can connect to it without any difficulty and affix their electricity meters.
Locals always find tricks to connect to electricity at a lower cost or even free of charge (especially in the mountains or in isolated places, especially through a building site meter). For the “Farangs”, none of that! As a foreigner, you will pay “full rate” and more (especially, in the islands). Moreover, as “Electricity Generating Authority of Thailand” (“EGAT”), the Thai public electricity company, holds the monopoly, it takes advantage of it cheerfully. Whether you go directly to them or to a private electrician, the result in terms of cost will be more or less the same, because in the end, it is always “EGAT” that makes the final decision for the electrical connection. However, rates can differ greatly depending on where in the country you will be installing your line.
Good to know: with the construction of your public power line, the surrounding land, which had no monetary value until then, will suddenly experience a phenomenal inflation! The locals, far from being amateurs in this matter, will take advantage of this opportunity to negotiate their land several times its original price (whereas at the beginning, it was not even intended for sale). Indeed, once the public power line is installed, everyone will be able to connect. In Thailand, the “richest” participate in the economic development of the nation.
Water is a very important issue in Thailand, especially when you own land in a steep area, far from urbanized areas. If you are unable to get a connection to the public water system, drilling a well may be a good alternative. However, this has a cost (between 100,000 Bahts and more than 500,000 Bahts depending on the depth of drilling, access to your land and the region of the country you are in). Moreover, you can never be sure that you will find a water table that is large enough to have water all year round.
Also, choosing the right location for a drilling operation requires intuition, experience and luck. Generally, Thai professionals working in these companies know their job very well and know where to dig. In case you don’t need to drill a well, the addition of one or more water tanks is a wise precaution. Indeed, except in Bangkok, the reliability of public water supply networks does not equal those we are used to in Europe. It is common to have water cuts ranging from a few hours to a full day. A properly dimensioned reservoir will make it possible to make the connection during this service interruption.
Depending on the city, it will even be possible for you to get emergency supplies from a tanker truck. Finally, the domestic water pumps installed in homes in Thailand are simple, efficient and reliable, ensuring many years of trouble-free operation. Although this device is rarely found in Europe, it allows Thai homes to stabilize or increase the water pressure in the domestic installation.
When buying a piece of land, people rarely ask themselves whether the seller actually owns the property or not. Several recent cases illustrate the importance of this problem, which can be vital for the future.
As a buyer, you must be very vigilant and check all the details before making an acquisition. The first thing to require is a copy of the deed of ownership (“Chanote” or “Nor Sor 3 Gor”) on which the name of the owner of the land is inscribed. You should only deal with the REAL lessor of the property! Never sign a document with a person claiming to be authorized to act on behalf of the owner. Unless this person provides legal proof of this.
Once you have this document in hand, check with the Land Office to verify its veracity and the information written on it (get help from your lawyer beforehand). You must make sure that the property or parcel described on the deed is the same. There are some places that private entities cannot own, such as lots that border the seashore. Check that the land does not fall into this type of category.
Make sure that the parcel is not under expropriation (otherwise you may find yourself evicted from your property later on). Another relatively common scam: the owner of the property, after having sold it, does not transfer the certificate of ownership to the “Land Department”, he takes advantage of the opportunity to sell the land one or more times to other people before you, and then disappears with the money. From then on, the purchased property does not belong to you! Also, always inquire on the spot to see if the land is not subject to claims or conflicts from a Third Party (family, neighbor, potential buyer, authorities…).
The sales contract is the key to everything! You must make sure that all the essential details are written down in black and white in this document, such as easements and the various unusual or exceptional features of the parcel of land. If it is proven that the lessor has voluntarily concealed certain serious expenses, the contract can be cancelled.
In conclusion, while buying unserviced land can generally be very attractive financially, the future costs of installing water, electricity and the access road (not to mention future construction) usually generate a significant increase in costs. Therefore, the difference in price between a serviced plot and an unserviced plot is often minimal. Therefore, take the time to think about it and weigh the pros and cons. Once again, it’s all a matter of choice… and budget.
Good to know: Once you own your land (in your own name or through a Thai law company), you are free to use it as you wish:
- A Real Estate Investment: many expatriates develop the land or build a house on it (villa, building) in order to sell their property with a nice capital gain.
- A Rental Investment : also very common. Buying a piece of land with a view to building one or more houses, bungalows or buildings on it and renting them on a “Short Term” or “Long Term” basis (renting for short periods, seasonal or year-round) and thus receiving a regular income.
- A Private Placement: build your own home.
- A Placement of Professional Order: to buy a piece of land in order to create one’s work tool (restaurant, hotel, resort, store, company).