Thailand: Real Estate (2nd edition)

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This country-specific Q&A provides an overview to real estate laws and regulations that may occur in Thailand.

It will cover the most pertinent issues including ownership structures, restrictions, transfers, taxes and environmental contamination.

This Q&A is part of the global guide to Real Estate. For a full list of jurisdictional Q&As visit

  1. Overview

    • Thailand uses the Civil law system, under which all of the laws and regulations are set forth in the forms of codes and related legislation, for example: acts, emergency decrees and royal decrees.
    • The Civil and Commercial Code (“CCC”) (Articles 1299-1434) provides key provisions on rights in property and ownership.
    • The Land Code regulates the ownership, possession, rights and affairs of and with respect to land – under the authority of the Ministry of Interior.
    • Given that Thailand has relatively strict rules for foreigners (both natural persons and juristic persons) regarding holding/ obtaining the ownership/rights in real estate in Thailand, there is legislation enacted to facilitate and encourage certain types of investment in Thailand which makes available ownership/rights in real estate, for example: Investments Promotion Act 1977 and Petroleum Act 1971.
  2. How is ownership of real estate proved?

    Ownership of real estate in Thailand is based on a registration system. The ownership and possessory rights including rights in property are registered with the competent officer of the Land Office.

    In case of land plots, evidence of ownership/possessory right is shown on title deeds/ certificates of utilization – details on which include specific particulars of the land, e.g., location, area, sheet numbers, numbering referred in the land office system, current owners and previous ones.

    Additionally, land registration is administered by a ‘physical’ system where people keep paper title deeds and go to the relevant land office and proceed to make the registration.

    Under the Land Code, any plot of land the ownership of which is not vested in any person belongs to the State.

    In case of buildings and factories – if the owner thereof is not the same one as the owner of the land on which it is situated, the ownership can be proven by reference to the building construction permit, where the applicant must be the owner of the building.

  3. Are there any restrictions on who can own real estate?

    Under the current implementation of the Land Code, foreigners (an individual or a juristic person in which foreigners hold more than 49 % of the capital or the number of foreign shareholders exceeds 50% of the total) are generally restricted from owning real estate, with certain exceptions stipulated therein (e.g., the foreigner received the land by inheritance), as set forth in specific laws and regulations. In addition, a foreigner cannot be granted ownership by law as a result of adverse possession.

    Here are the material exceptions:

    (1) Investment Promotion Act 1977

    A foreigner who receives investment promotion under this Act will be permitted to own plots of land for the purpose of the promoted business operation, as the Board of Investment deems appropriate. However, in the case of dissolution or transfer of business, the foreigners must dispose of such plots of land within one year of the dissolution date or transfer date (as the case may be).

    (2) Industrial Estate Authority of Thailand Act 1979

    A foreign business operator in an industrial estate may be granted the right to own plots of land within such industrial estate as the Board of Directors of the Industrial Estate Authority of Thailand (“IEAT”) deems appropriate. In the case of dissolution or transfer of business, the foreigners must dispose of such plots of land to the IEAT or the transferee of the business within three years of the dissolution date or transfer date (as the case may be).

    (3) Petroleum Act 1971

    For the purpose of operating petroleum business under this Act, the Petroleum Committee has the power to permit a foreign concessionaire to own plots of land, as it deems necessary.

    (4) Condominium Act 1979

    For other kinds of real estate, the Condominium Act 1979 permits foreigners to own a condominium, subject to qualifications under the Act, provided, that foreigners may not own more than 49% of the total area of the condominium.

  4. What types of proprietary interests in real estate can be created?

    Thai law does not properly define ‘proprietary interests’. There are several rights in property applicable in Thailand, however, and below we provide a synopsis of common rights or interests in real estate which create or later create ownership thereof.

    (i) Freehold interest

    The most common type of proprietary interest, the owner has absolute ownership of the surface of the land and the space above and below as well as any buildings constructed thereon (with respect to a building, only in the event that it is not registered in the name of another owner, see point 5 below.)
    Another form of freehold interest in real estate is the rights in a condominium – each unit in the building belongs to a different owner who also has joint ownership in the common area.

    (ii) Adverse possession

    Ownership in real estate will be created by law if someone holds such real estate in possession in a peaceful and open manner for a period of 10 years with the intention to obtain ownership.

  5. Is ownership of real estate and the buildings on it separate?

    Yes, the ownership of real estate and the building on it can be separate.

    The CCC provides that the owner of the property shall be the owner of the component part attached to such property; provided that such component part is attached to the property so that they are inseparable without having to destroy the component part. The building erected on the land is a component part of the land. However, there are cases where the building erected on the land is not a component part thereof, for example:

    (i) where the lessee constructs a building on the land it leases, without providing that the ownership of the building will be transferred to the lessor who is the owner of the land.

    For this case, the separation of the ownership can only be confirmed through the lease agreement.

    (ii) condominium pursuant to Condominium Act 1979 where the ownership of each unit is separate from the ownership of the land.

  6. What are common ownership structures for ownership of commercial real estate?

    The choice of ownership structure depends on the commercial purposes and therefore is determined on a case-by-case basis.

    However, the common ownership structures are:

    • Owned by a corporate

    Corporate-owned real estate is basically for operating a business, including intra-group restructuring, e.g., line of business grouping.

    Another familiar purpose is wealth management for families. There were tax incentives made available in certain years in a form of enacted royal decree, omitting transfer-related taxes and income tax for the transfer to land from a natural person to a company.

    • REIT (Real Estate Investment Trust)

    A REIT allows the owner to generate more revenue and expand investment from the real estate through fundraising from the public. There are currently various types of REITs: offices, warehouses and department stores. All units of a REIT will be listed on the Stock Exchange of Thailand, and the relevant regulators have placed qualifications and conditions for REIT establishments.

  7. What is the usual legal due diligence process that is undertaken when acquiring commercial real estate?

    When acquiring real estate, it is advisable to pay attention to the legality of the current operation regarding ownership, rights or lease of such real estate to ensure the success of the acquisition with legal risks being minimized as much as possible.

    As an illustration, in acquiring land plots, the usual due diligence will cover:

    • Title deed review – it provides necessary information of the owner, the former owners, areas, address and most importantly – whether it is subject to security of any kind or subject to any kind of rights, for example servitude.

    Where the title deed of a land plot reveals that it is subject to mortgages or other jus in rem (right in property) – relevant agreements registered with the land office will be requested for a review.

    It is also usual to request to review, at the land office where such real estate located, a sheet of land plots to verify boundaries and determine whether a land survey is necessary.

    • Agreements with regard to such real estate – lease agreements and registration with the land office application.
    • Licenses/permits for (1) building construction permit and building construction certificate (if applicable under the Building Control Act 1979) which provide details and type of the construction, including the owner who requested the construction; (2) business-related licenses, for example a factory license under the Factory Act 1992, a license to establish a market under the Public Health Act 1992 – the qualifications and terms of which will help us verifying compliance by the owner with relevant regulations and potential legal risks; and (3) other licenses which give the owner of the real estate certain benefits/privileges, for example a BOI certificate.
    • Zoning – location of the real estate will be reviewed whether its usage is in compliance with Town Planning Act 1975.
  8. What legal issues (if any) cannot be covered by usual legal due diligence?

    Legal due diligence covers review of title deeds and relevant agreements referred to on the back of the title deeds, but does not cover the land survey.

    The land survey process normally consists of detailed investigation of land plots, area measurement, reviewing documents/information retained by relevant land officers. As the land survey sometimes takes an additional amount of time and requires expertise of personnel, it is therefore only conducted when the real estate is the key asset of the transaction, or where special issues or concerns are addressed.
    Therefore, usual legal due diligence sometimes may not cover the following:

    - Whether the actual areas of the land plot reflect information provided in the deeds in terms of measurement and occupation.

    - Whether there are any issues threatening the ownership or the rights in property, e.g., whether the land plots relate to permanent forest areas, whether a boundary line investigation is needed and whether the distance to the public road is in compliance with relevant laws, for example, the Building Control Act 1979.

    - Other uninformed factual facts, as we do not conduct physical land due diligence.

  9. What is the usual process for transfer of commercial real estate?

    We will divide into two phases: (i) the commercial; (ii) legal requirements.


    - the process normally starts off with negotiation between the parties regarding pricing, registration fee for the transfer of real estate, in this case the result of negotiation may be made in the form of a letter of intent or MOU.

    - the buyer, as it deems necessary, may conduct full land due diligence or request to review the title deeds.

    - the parties must prepare a draft sale and purchase agreement and finalise it

    - the parties execute the agreement and determine the closing date on which the buyer will proceed to make the payment and the registration at the relevant office must be undertaken and completed.

    Legal requirement

    - given that the parties have their own sale and purchase agreement, the land officer of the relevant land office will prepare and use the form prepared by land office; the agreement entered into by the parties will be attached to the form prepared by the land officer.

    - the officer will review supporting documents, which must be or translated to be in Thai, to ensure the correctness and completeness

    - the parties pay the registration fee.

    - the officer therefore records the transaction on the back of the title deeds – both officer’s copy and owner’s copy.

  10. Is it common for commercial real estate transfers to be effected by way of share transfer as well as asset transfer?

    Yes, it is common to transfer real estate either way. The selection of means and manner heavily depends on the commercial aspects, for example: consideration of the purpose of the acquisition –business operation or only assets -- and pricing. One issue worth noting is that if it is an asset transfer, then registration will be required and the registration fees will need to be taken into account –it is always advisable that the parties should agree and specify in the agreement who will be responsible for relevant fees and registration expenses.

  11. On the sale of interests in land does the benefit of any occupational leases and income automatically transfer?

    Yes. If there is a sale of real estate, the CCC specifically provides that a lease of real asset does not interfere with a transfer of such real estate ownership – the transferee therefore takes ownership subject to the occupational leases, without binding to specific provisions (if any) of such occupational leases. In practice, it is therefore advisable to arrange an addendum to the lease agreement acknowledging the change of the lessor, and agree additional terms (if any).

  12. What common rights, interests and burdens can be created or attach over real estate and how are these protected?

    Quite a number of rights, interests and burden may be attached to or created on real estate. Here are the common ones:

    - Servitude: where real estate is bound for the benefit of other real estate so that the entire proprietary rights of the real estate are affected and cannot be fully enjoyed.

    - Usufruct: when usufructuary is granted a right of possession, use and benefit of the real estate.

    - The right of habitation: when a person is entitled to occupy the building without having to pay the rental.

    - Right of way of necessity: where the right to access to the public ways is granted to the owner of landlocked who shall pay a compensation for such usage of way of necessity to the grantor.

    Generally, rights, interests and burdens require registration with competent officers, including registration of leases with duration of three years or more, mortgage or collateral registration under the Business Collateral Act 2015, which only applies when the debtor conducts real estate business.

  13. Are split legal and beneficial ownership of real estate (i.e. trust structures) recognised

    No, this concept is neither regulated nor recognized under Thai law.

  14. What are the main taxes associated with commercial real estate ownership and transfer of commercial real estate?


    • Under the Building and Land Tax Act B.E. 2475, the owner of the real estate property is liable for building and land tax at a rate of 12.5% of the annual assessed rental value.


    • The transfer of real estate property is subject to a transfer fee at the rate of 2% of the assessed land value. This amount can either be borne by one party to the transaction or shared between the transferor or transferee.
    • The transferor of real estate property is subject to specific-business tax at a rate of 3.3% of the transfer value or market value, whichever is higher.
    • The transferee of real estate property is subject to withholding tax at a rate of 1% of the transfer value or market value, whichever is higher.
  15. What are common terms of commercial leases and are there regulatory controls on the terms of leases?

    Common terms the parties agree on in the lease agreement:


    - The law provides that registration with the competent land office is required when the lease term of real estate exceeds three years.

    - The law also states that the lease term may not exceed 30 years, however, the law allows a 30-year extension


    - It is a common practice for the parties to agree on who is responsible for the registration fees (if applicable) and relevant expenses.

    - Fixed rate or fluctuating rate

    - Revisit and agreement on the rental for if the term is extended

    - Late-payment / non-payment interest rate

    Sub-lease/ Assignment of Rights

    - Whether the lessor consents to a sub-lease / assignment of rights.

    Lessee’s Obligations

    These provisions usually require the lessee to carry out maintenance and allow the lessor’s personnel to conduct an inspection upon termination of the lease

    - Whether termination for convenience is allowed

    - How much prior notice is required for the case of termination for convenience and breach of agreement

    - Termination due to the breach of agreement

    Dispute Resolution / governing law

    - Stipulating means and ways for the parties to resolve a dispute.

  16. How are use, planning and zoning restrictions on real estate regulated?

    Planning and zoning regulations in Thailand are divided into general town plan and specific town plan. The main regulation is the Town Planning Act 1975, which provides outlines and implementation of general town plan and specific town plan, surveillance to ensure that everyone complies with the town plan regulations including the duties and penalties there under.

    For each specific province, there are specific ministerial regulations together with a plan setting the utilisation of the land classified by categories in colour, for example purple indicates manufacturing areas, red indicates commercial affair areas, and green indicates rural and agriculture.

    In addition, each category will dictate the (i) FAR (Floor Area Ratio) stipulating the maximum area of construction that can be built in that area; and (ii) OSR (Open Space Ratio) stipulating the required open space for the entire area.

  17. Who can be liable for environmental contamination on real estate?

    Thailand’s Enhancement and Conservation of National Environmental Quality Act 1992 has begun to adopt the principle ‘the polluter-pays’. The key concept is that a person who pollutes the environment must be responsible for the damages caused.

    Under the Act, the owner or the processor of the point which is a source of pollution is subject to relevant pollution control and mitigation regulations, and non-compliance with the Act will result in fines.

  18. Is expropriation of real estate possible?

    Yes, it is. There is a specific act regulating the process and necessity for expropriation of real estate: Real Estate Expropriation Act 1987 (the “Expropriation Act”).

    Expropriation by the State under the Expropriation will occur when the State deems that the expropriation is necessary for the case of public utility, national defence, obtaining natural resources, city planning, or other economic-wise purposes, for example: agriculture development, agro-industry or industry and trading. A specific Royal Decree will be enacted for any expropriation – which stipulates, at a minimum, the purpose of the expropriation, the authorized expropriation officer and the area.

    The owner of the real estate will be given notice by the authorized expropriation office where he will begin the process after the enactment of the Royal Decree. Any person who disrupts the duties of the authorized expropriation office will be subject to six-month imprisonment or a fine not exceeding THB 6,000, or both.

    The authorized expropriation office has the authority under the Expropriation Act to determine the compensation amount to be given to (1) the owner of the land plot to be expropriated; (2) the owner of the construction thereon; (3) the lessee of the land or the construction thereon, provided that the lease must be in writing, and the sum that will be paid is for the actual damage caused for an early withdrawal from the land/construction before termination of the lease period; (4) the owner of the perennial agriculture on the land on the date on which the Royal Decree comes into force and effect; and (5) any person who is deprived of rights of way or water pipeline or electricity line due to such expropriation.

    In the event that the real estate subject to expropriation is under mortgage or jus in rem (right in property), a written notice issued by the authorized expropriation office will be served on the mortgagee or the beneficial owner of such jus in rem (right in property) notifying that there is a 60-day notice period for the repayment request. However, the compensation for the expropriation will be paid to such mortgagee or beneficial owner only on the condition that it is duly agreed/settled by the parties.

  19. Is it possible to create mortgages over real estate and how are these protected and enforced?

    Yes, it is. This kind of security for the mortgagor’s performance is applicable to all types of real estate. The mortgage agreement must specify the property mortgaged with the amount that is placed as collateral.

    The mortgage agreement is required by law to be made in writing and registered with a competent land officer.

    A person may put his/her own property in mortgage as security for the performance of another person (a debtor), where such person may elect to perform the obligation on behalf of the debtor in order to prevent the enforcement of the mortgage on the property. In such case the mortgagor has the right to receive the amount paid for the performance from the debtor.

    The mortgagee is subject to be repaid out of the mortgaged property before other ordinary creditors, regardless of whether ownership of the property is transferred to a third person.

    For the enforcement of mortgaged property: (i) seized by the court’s order and sold in public auction; (ii) in the case of no other mortgages/preferential rights over the mortgaged property, the mortgagee is entitled to claim the amount received due to the foreclosure. If the amount received from the auction is short of the repayment of the amount due or if the assessed value of the foreclosed property is lower than the amount due, the debtor is not responsible for the difference.

  20. Are there material costs associated with the creation of mortgages over real estate?

    Yes. One material cost for the creation of a mortgage over real estate is a registration fee assessed by the Land Department: one percent of the mortgage limit amount, however the maximum amount of the registration fee is capped at THB 200,000.

  21. Is it possible to create a trust structure for mortgage security over real estate?

    No, it is not. Unlike other countries under the common law system, the ‘trust’ concept where title of property held by a person for the benefit of another person is not recognized in Thailand.

  22. What is the main legislation relating to commercial real estate ownership?

    • The CCC provides regulations on proprietary rights and other rights - whether or not, by juristic act, in property.
    • Land ownership, the allocation of lands, means and manners of land registration are provided in the Land Code and ministerial notification and land department regulations.
    • Ownership in condominium, it is referred in Condominium Act 1979.