Expats interested in owning an apartment or who end up inheriting a foreign-owned condominium have quite a few questions about property laws in Thailand. As a premier Bangkok real estate agent, we at Century21SkyLux have facilitated both types of property transactions over the years and are very familiar with the issues surrounding these transactions. Here’s our mini-guide that answers the most commonly-asked questions that expats have regarding property ownership and succession in Thailand.
Who Can Own A Property In Thailand?
According to the Condominium Act B.E. 2522 (the Act) and its amendments, both foreign nationals and juristic person who meet certain criteria are permitted to both purchase and own condominium projects in Thailand. The two most important aspects of the law that expats need to be aware of are.
Can you own a property in that condominium project?
Section 19b of the Condominium Act specifies that foreign ownership in a condominium project should not exceed 49% of the total floor area of all the units combined. 51% of the total floor area of all the units combined have to be owned by Thais.
Given this legal requirement, expats need to make sure that they ask how many units are still available for foreign ownership in any condominium project that they are interested in, and be aware of the Thai-foreign ownership quota.
Do you qualify for foreign ownership?
Foreigners wishing to buy or invest in a condo in Thailand need to meet certain requirements for foreign ownership as prescribed under Section 19 of the Condominium Act. They must be –
- Foreign individuals possessing a Permanent Residence permit.
- Foreign individuals residing in Thailand under the laws governing investment promotion.
- Foreign individuals who have a foreign currency bank account, or withdraw money from a non-resident bank account, or who bring foreign currency into Thailand.
Inheriting a Condo in Thailand
What do the Thailand’s laws state about inheriting a foreign-owned condominium? If you are an expat who might inherit or has just inherited a condominium, these are the questions you need to ask.
What is the Thai-foreign ownership quota in the condominium project?
This quota is extremely important because it is one of the factors that will determine whether you get to keep the condo or not. According to the Condominium Act, when a foreigner who falls under Section 19 (1) and (2), has obtained a condominium by legacy in the capacity of statutory heir or inheritor under a last will and testament or by other means, that foreigner can own the unit provided that foreign ownership in the condominium project does not exceed 49% when they register ownership of the condominium.
Do I qualify for foreign ownership?
If you think you might inherit or have just inherited a condo, do you meet the criteria required for foreign ownership which is – do you hold a Permanent Residence permit under Section 19 (1) or do you reside in Thailand under the laws governing investment promotion under Section 19 (2)?
If registering the property under your name doesn’t exceed the foreign ownership of 49% and you qualify for foreign ownership, then there’s no problem going forward, and you will be permitted to keep the condominium.
However, if registering your condo ownership will cause foreign ownership in the entire condominium project to exceed 49% or if you don’t qualify for foreign ownership then you are not permitted to own the unit, under the law, and are required to dispose of the condo, within one year from the date you acquired it.
Another critical point to note – Even if the Thai-foreign ownership ratio is not exceeded but you don’t qualify for foreign ownership, then you are still required to dispose of it within one year from the acquisition date.
Section 19 (5) And Foreign-Owned Condominiums
What we at Century21SkyLux have seen is that foreigners typically acquire a condo by remitting foreign currency into Thailand under Section 19 (5). As an expat you might wonder whether legal heirs who fall under Section 19 (5) but don’t meet the criteria under Section 19 (1) and (2), can legally inherit the unit and not have to dispose of it in one year’s time. Good question!
The Land Department has clarified this issue as follows – Although the Condominium Act restricts foreign ownership to those who fall under Section 19, and only allows foreigners under Section 19 (1) and (2) to inherit a condo and keep it, the principal law governing succession as specified by Sections 1599 and 1600 of the Thai Civil and Commercial Code (CCC), applies here in cases of foreign inheritance too.
Understanding Sections 1599 And 1600 OF The CCC
These sections of the CCC clearly state that in the case of the death of the individual his/her estate devolves to his/her heirs. The term estate here includes –
- Every type of property the deceased individual possessed
- Their rights, duties and liabilities (except those which under law are considered purely personal to the individual).
What this means is that if the deceased foreigner was a qualified foreign individual under Section 19 (5) of the Condominium Act, and remitted foreign currency into Thailand to buy a condo, then their legal heirs (if also foreigners) inherit their rights and under Section 19 (5) are deemed to be foreigners too. Foreign legal heirs have the same rights held formerly by their relatives and can inherit the condo without having to get rid of it in a year’s time.
Such a legal foreign heir or inheritor specified in the deceased individual’s last will and testament, is legally required to register the unit with the relevant Land Office, and present the following documents to the land official.
- The deceased former owner’s death certificate.
- The last will and testament (or inheritance documents), a court order that appoints an estate administrator (if any), a family tree.
- Any other required documents.
In case there’s no court order that appoints an estate administrator, the registration of an inherited condo will be subject to a 30-day public notice requirement. Additionally, the registration will also be subject to a specific business tax (if applicable), that the land official calculates based on official assessed price of the condo unit (determined by the Land Office) and a transfer fee. One other point for expats to note regarding foreign-owned condominiums, is that a person who inherits it does not incur any personal income tax and stamp duty.
We hope this mini-guide on owning a condo or inheriting a condo in Thailand has helped clarify some of the critical issues surrounding both foreign ownership and foreign succession. If you require any more details, please do get in touch with us at Century21 Skylux, or drop in to our office. We will be glad to give you the benefit of our extensive expertise and provide further clarification and assistance should you should require it.