Buying Land

Before you can build you house you need to acquire land to build it on. This is not a simple matter for farangs, but having a traditional teak house solves some of the problems.

Foreign ownership of land in Thailand

The Bowring treaty of 1855 gave British subjects the right to purchase land near the capital and was the first time that foreigners were allowed to own land in Siam. Similar treaties were signed shortly after with other Western powers.

These treaties, however, were later considered unequal treaties, and by the 1890's the Thais started putting up barriers to foreigners acquiring land and finding ways to oust those foreigners who had purchased land or houses often without compensation.

The law is continually changing but it is clear that Thais are not happy about foreigners owning land and any concessions that are given are likely to be clawed back at some time.

Legal Matters

Thai law stipulates that foreigners may not own land in their own names; one has the right of ownership of buildings only. However a recent law gives the right to a foreigner to buy 1 rai of land if they bring in 40 million baht into the country to invest.

Some lawyers suggest  forming a Limited Company and registering the land as owned by the company. However there are problems with this. For a Thailand-registered company to buy land legally, it must consist of Thai shareholders. The foreigner can personally own a maximum of 49% of the company shares, and the remaining 51% must be in the names of Thai nationals (39% - 61% at the time of registration of the property; can be changed after). The foreigner can hire Thai nationals to act as nominees of their company but this may be risky in the long run. These Thai nominees will become legal shareholders of the company and therefore, legally own the company. You could make the Thai's sign papers withdrawing from the company so that they can be easily replaced should they get ideas beyond their nominal ownership. The problem with this is that it is strictly illegal if the company is just a dummy with no other genuine trade, and should the arrangement come to light then the property can be forfeit. Note that many real estate agents gloss over these difficulties, because they make their money through commission on the sale of the property. Their primary aim is to push the deal through and they are unlikely to give you objective advice.

Foreigners can lease land on a 30 year contract which contains a clause giving the lessee first option on a further 30 years. The same contract, registered at the Land Office (Department of Lands), can be renewed every 30 years for a maximum of 990 years. The lessor's heirs are bound by law to honour the agreement, and the lessee can bequeath the lease to his/her heirs in a Last Will and Testament. A potential weakness with owning a lease  is, for example, that the lessor can conceivably claim that the lessee is mismanaging the land to the detriment of its value, and can sue to dissolve the agreement. Of course, this point must be proven in court, but could be a serious headache for the lessee. 

Another option would be to put the land into the name of a Thai citizen who you trust such as your spouse or children (if over the age of 16) for example. An advantage of having a traditional Thai house is that should your relationship with this person sour over time, you can always dismantle the house, of which you are the legal owner, and remove it. It would be hard to do this with a concrete house.

There are minimal planning laws in Thailand, and so if your neighbor wants to open a pig farm next door to your dream home, there is nothing you can do. Again, another advantage of being able to dismantle and move your house. Or a change in a flight path that  causes aircraft to pass over your home all day - a difficult eventuality to predict.

Land titles

True title deeds, which prove that an individual owns a specific piece of land, are indeed quite hard to come by in Thailand. This is because Chanote Tee Din (as these deeds are called in Thai) can only be issued once the land has been accurately surveyed and plotted out against the national land survey grid.

Out in the countryside it is unlikely land will yet have a Chanote title. In these cases, other official documents proving land use and possession do exist. There are several levels of these titles, but you must be aware that all but one will not have been surveyed and thus the boundaries of the land may be contested.

Nor Sor Sam documents, one step below Chanote Tee Din, are registered with the Land Office and prove that the land in question has been exploited by the possessor and thus he or she has a confirmed right to use the land. These titles can be transferred, leased or sold, but they do not provide the same clear-cut ownership rights as Chanote Tee Din. Thus, before any legal act concerning the land takes place, public notice must be posted for 30 days so that anyone can contest it.

The newer, Nor Sor Sam Gor papers, that have been issued since 1978, are slightly more accurate and the land has usually been marked out against the national survey, or at the very least a scaled aerial photograph. This means that for this newer type of Nor Sor Sam paper, no public notice needs to be posted before a change in status can be made. It is also possible (as with Chanote land) to subdivide and resell smaller plots of Nor Sor Sam Gor land.

Nor Sor Sam are probably the highest type of paper you will find in rural areas and can usually be bought or leased in confidence (provided you follow the procedure for checking ownership, as detailed below), as most of the requirements for the issuance of a Chanote title deed have been met and it is only a question of time (possibly several years) before the paper gets upgraded to a Chanote Tee Din.

Below these type of papers are a whole host of others, mainly issued for agricultural land and none of which give a right to build - or even apply for planning permission to build - any permanent structure. Any houses or other buildings you see on the land are illegal - and what is okay for local Thai people is not the same for 'wealthy' foreigners, so don't expect to be able to get away with it because they can.

Sor Gor Neung is the most basic recorded right to a piece of land. This document does not entitle its owner to lease or sell the land in question (again, not accurately surveyed). If you have Sor Gor Neung land already (say, in your wife's family), it can, however, like the Nor Sor Sam and Nor Sor Sam Gor papers, be relatively easily 'upgraded' to Chanote titles, once the land has been surveyed by the provincial Land Office.

If you come across such things as the Por Bor Tor Ha and the Por Bor Tor Hok, these are little more than tax receipts from the Land Office, held by people who have paid tax to use the land for farming or grazing etc. They can be considered the same as squatter or settler claims. Again, it is not possible to build on this land, nor use it as collateral for a loan or mortgage, nor register its sale or lease.

Under certain circumstances (i.e. when the 'owner' has friends in the right places), this type of paper can also be upgraded to a Nor Sor Sam Gor or Chanote Tee Din title, but for a foreigner to go down this route and invest money, even egged on by promises of a Chanote at the end, would be risky to say the least.

The final type of paper is the Sor Bor Kor, equivalent to the Chanote Tee Din, in that the land will have been accuratetely surveyed and plotted and the paper confers full rights of ownership and right to develop the land within the law. They are, however, only issued to those who have a historical claim to usually wooded areas, often near National Parks - on the strict condition that they may not be leased or sold. They are transferrable only to heirs through the last will and testament of the owner.

All types of land papers and titles are registered with the provincial Land Office. To check ownership - an essential part of the buying / leasing process - you, or your lawyer, will have to go there with copies of front and back of the title deed plus a copy of the owner's ID card and house registration. Officials will then be able to check if the paper is correctly registered in the claimed owner's name.

Make sure that the numbered markers on the Chanote title deed correspond with those physically in the ground, or you may end up buying a different piece of land from that which you viewed! If in doubt, for a small fee you can arrange for officials from the land office to come to the site to remeasure and confirm the boundaries - this is especially useful if you will be buying or leasing a plot to be subdivided.