New ownership rights for foreign house owners
Under existing rules foreigners are not permitted to own land in Thailand (other than a few special exemptions). A new law implemented last year, the ‘Sap-Ing-Sith Act’, aims to give foreign buyers more protection over immovable property and boost foreign investment into the housing market
Most foreigners looking to buy houses in Thailand currently do so using legal structures such as a Thai holding company, leasehold arrangements or usufruct. All of these structures have different limitations and if not used correctly can potentially circumvent the law. The new regulations grant the holder the right to use an immovable property on land plots (this can be applied to both houses and condominiums). A Sap-Ing-Sith can be legally registered with the local land office for a period of up to 30 years.
The Sap-Ing-Sith has some advantages over existing rights. These include the right to make alterations to the property or transfer the Sap-Ing-Sith to a third party without the land owner’s consent. Furthermore the Sap-Ing-Sith can be used as security for a mortgage (unregistered), and is inheritable under statutory inheritance law. The new law also requires the Sap-Ing-Sith holder to provide written consent to the land owner to transfer ownership of the land or use it as security.
Although the Sap-Ing-Sith does provide some additional benefits in terms of utilizing the value of the property on the land and allowing for easy sale of such property; it doesn’t include many more benefits than existing registered leaseholds. Furthermore the 30 year limitation keeps it in line with similar leasehold structures. Therefore it is likely that many foreign investors will continue to utilize Thai company structures for their property investments. However the new law may benefit some house owners looking to secure rights to their property. Many real estate developers are calling on the government to further relax property regulations for foreign buyers to stimulate the housing market.
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