| Although foreigners are legally
prohibited from owing land in Thailand, there are proven and
effective ways in which you are able to purchase land and own
it while complying with Thai laws.
One form of land purchase, popular with foreign investors
is through a Limited Liability Company. The foreigner can
own a maximum 39% of the company shares, but can easily -
and legally - organize to be the only director of the company
who can commit or bind the company in any contractual dealings.
This effectively allows the buyer total & secure control
of the company and its assets.
Another form of land purchase for foreigners is through a
Leasehold Agreement. These are generally written up as 30
year leases with two additional prepaid 30 year renewals for
a total of 90 years. The lease will include clauses that automatically
allow freehold ownership if Thai law ever changes to allow
foreign ownership, and the right to sell, sublet, or transfer
the property. This makes Leasehold purchase effectively ownership.
Costs
On all purchase/sale of property in Thailand there is a stamp
duty, of 0.5%, a transfer fee of 0.01% and a business tax
of 0.11% levied against an owner who has been in registered
possession of the property less than 5 years, and income tax.
There is no capital gains tax in Thailand, unlike many other
countries, and Income Tax (usually between 1.0 - 3.0%) on
property is the comparable replacement. There are no set rules
on who pays the income tax, and it is just another part of
the bargaining process, as with all the other costs of the
transfer of ownership.
Titles
A freehold title gives the owner absolute proprietorship over
the land in perpetuity.
Leasehold property is held on a government lease for a period
of 30 years. At the end of this period, the landowner applies
for an extension of lease, which in nearly all cases is granted.
The lease can be extended for a period of up to 90 years at
which time the lease must be renewed.
Although a freehold title would be of distinct advantage,
a leasehold title bears no specific disadvantage to the purchaser.
Both forms of purchase are safe and effective means of property
ownership by foreigners.
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