Taxes
and Selling Properties in Thailand
Acquisition of Land by Alien
According
to Section 86 of the Land Code, an alien may acquire land in
Thailand only by virtue of the provision of a treaty providing
him with the right to own immovable property. Obtaining such
acquisition is subject to the provision of the Land Code and
the Ministerial Regulations issued under the Code, and the
permission must be obtained from the Ministry of Interior.
Before the termination of the treaty which was made on February
27th, 1970, there were 16 countries bided to the treaty ; USA,
England, Switzerland, Germany, Denmark, Norway, the Netherlands,
France, India, Belgium, Sweden, Italy, Japan, Burma, Portuguese,
and Pakistan. Since then, Thailand has no longer made any treaty
with any country to allow an alien to acquire land in Thailand
by virtue of a treaty.
However, the Land Code has been amended with Section 96 bis providing
that since January 19th, 2002, an alien is allowed to purchase
land in Thailand for residential purpose and the land to
be purchased shall be not more than one rai in area, and
the following rules and conditions must be met:
1. Bringing money not less than Baht forty million into the Kingdom
for investment and maintaining the investment not less that
five years;
2. Permission
must be obtained from the Minister of Ministry of Interior;
3. Money
brought into the Kingdom shall be invested in one of the following
businesses or activities;
3.1 to purchase
bonds of Thai Government, bonds of Thai National Bank, bonds
of State Enterprise or bonds which the Ministry of Finance
secures the capital or interest,
3.2 an investment
in a property mutual fund, a property mutual fund or a mutual
fund for resolving financial institution problems established
under the law on Securities and Stock Exchange,
3.3 an investment
in share capital of a juristic person who is granted permission
of investment under the law on promotion of investment,
3.4 an investment
in an activity as declared by the Board of Investment to be
an activity eligible to be granted promotion of investment
under the law on promotion of investment;
4. the land
to be acquired shall be located in Bangkok Metropolis, Pattaya
City, or Tessaban (Municipality), or in the area specified
as residential zone according to the law on Town and Country
Planning and shall not be located in a military safety zone
according to the law on Military Safety Zone;
5. an alien,
who is granted permission, shall utilize the land only for
residence for his/herself and the family in a way that is not
contrary to the local custom or good living of the local community;
6. if an
alien, who is granted permission to acquire such land, does
not comply with the rules and conditions specified, he/she
shall disposes of such land in the portion of his/her possession
within the period of time specified by the Director General
of the Department of Lands which shall be not less than one
hundred eighty days and not more than one year. If the time
limit elapses, the Director General shall have the power to
dispose of such land;
7. if an
alien, who is granted permission to acquire such land, does
not utilize the land for residence within two years as from
the day the registration for land acquisition is made, the
Director General shall have the power to dispose of such land.
Besides the aforementioned rules and conditions, an alien may
acquire land by inheritance as statutory heir, in this instance,
the land devolved when combined with the land already acquired
shall not exceed that specified by law, for examples, land for
residential purpose not exceeding 1 rai per household, land for
commercial purpose not exceeding 1 rai, land for industrial purpose
not exceeding 10 rais, and land for agricultural purpose not
exceeding 10 rai per household.
An alien whose spouse is a Thai national either legitimate or
illegitimate, that Thai national can purchase land but the alien
spouse of that Thai national must give a joint written confirmation
that the money which that Thai national will expend on purchasing
the land is wholly the separate property or personal effects
of that Thai national and not the Sin Somros or jointly acquired
property.
Fees
(a) 0.01% of the valuation price, in the case of purchasing the
land located in the land development project (this rate is
due in December 2002)
(b) In the case other than (a) the fee is 2% of the valuation
price
Taxes and duties
To be paid according to the Code of Revenue
Legal
Affairs Division
Department of Land
Acquisition of Condominium Unit by Alien
Previously,
an alien could have ownership in a condominium unit or bought
a condominium unit in each condominium in a proportion not
higher than forty percent of the total space of all units in
that condominium at the time the application for condominium
registration had been lodging. Later, on April 28th, 1999,
the Condominium Act was amended to facilitate an alien in the
purchase of condominium unit. As such, an alien may have ownership
in a condominium unit in a proportion not higher than forty
nine percent of the total space of all units in that condominium
at the time the application for condominium registration is
being lodged. The amended Act also provides that an alien may
have ownership in a condominium unit exceeding forty nine percent
if the following rules are satisfied:
1. Such condominium shall be situated in Bangkok Metropolis,
municipality area or other local administrative area i.e. the
Pattaya Ciity;
2. The total area of the land on which a condominium is situated,
when combined with the land provided for common use or benefit
of all co-owners, shall not exceed five rai;
3. Such condominium shall accommodate not less than forty condominium
units;
4. Such condominium shall be registered not less than one year
prior to the date an alien applies for ownership in the condominium
unit;
5. Such condominium shall not be situated in the area of military
safety zone under the law on Military Safety Zone;
6. An alien shall utilize a condominium unit in a way that is
not contrary to the local custom or good living of the local
community;
However, in a five year term as from April 28th,1999, the rules
concerning the acquisition of ownership by an alien in a condominium
unit in a higher proportion than forty nine percent shall take
effect. After that it shall be repealed, and the alien obtaining
an ownership in this regard and the alien receiving an ownership
in a condominium unit transferred by the former are allowed to
continue holding the ownership in that condominium unit even
in a higher proportion than forty nine percent.
Hire of Immovable Property for Commerce and Industry
by Alien
In general,
an alien may hire land in Thailand as provided by the Civil
and Commercial Code and the contract of hire cannot exceed
thirty years thereof. Once the contract comes to an end, it
can be renewed, but it must not exceed thirty years from the
date of renewal.
Later and according to the Government policy focusing on boosting
industrial and commercial investment, the Hire of Immovable Property
for Commerce and Industry Act B.E. 2542 was enacted and subsequently
put into force on May 19th, 1999. The Act aims at providing specific
rules and conditions in respect of the hire of immovable property
for commercial and industrial purposes whereby an alien can choose
either from hiring land not exceeding one hundred rai or more
than one hundred rai. Provided that the following rules for hiring
land not exceeding one hundred rai must be satisfied:
1. The duration of a hire of immovable property shall exceed
thirty years but not exceed fifty years. In this instance,
the letter and the hirer may make an agreement to renew the
contract but it shall not exceed fifty years from the day
the agreement is made;
2. The contract
of hire shall be made in writing and registered by the competent
official;
3. The letter
shall have possession in such immovable property;
4. The right
of hire can be used as suretyship for performance of obligation
by mortgage;
5. The right
and duties of hire are devolvable upon the heir and the hirer
can sublet or transfer his right of hire to a third person
unless otherwise provided by the contract of hire;
6. Immovable
property to be hire registered by the competent official under
this Act shall be located in either area of the followings;
6.1 the area
specified by the law on Town and Country Planning as for commercial
or industrial purpose,
6.2 the industrial
estate zone provided by the law on Industrial Estate of Thailand,
7. A commerce
or industry applied for a registration of hire shall obtain,
prior to the registration, either of the following appearances;
7.1 Being
a commerce with an investment cost not less than Baht twenty
million;
7.2 Being
an industry that is eligible to be granted a certificate of
investment promotion under
the law on Investment Promotion;
7.3 Being
a commerce or industry which benefits the economic and social
of the country as declared by the Minister of Ministry of Interior
and endorsed by the cabinet.
8. The type
of commerce or industry whereby an alien can apply for registration
must be a commerce or industry upon which an alien can make
business under the law on Business
Operation
of an Alien.
In the case
of hiring the land more that one hundred rai, besides the satisfaction
of the aforementioned rules, either of the following rules
must also be met:
1. The operation of such commerce or industry shall add value
to an exportation or support employment in the country;
2. Such operation shall never be operated in the Kingdom, unless
otherwise inadequate;
3. Such operation shall incorporate state of the art production
process or technology development;
4. Being in high benefit to the country’s economic and
social as declared by the minister of Ministry of Interior and
endorsed by the cabinet;
5. In the case where an alien is a hirer, sub-hirer or a transferee
of the right of hire, an investment in an operation of such commerce
or industry shall not be less than Baht one hundred million excluding
the cost of hire. Also, the total amount of money invested shall
be foreign exchange brought into the Kingdom or withdrawn from
the foreign currency deposit account or withdrawn from the non-resident
Baht account.
The
Acquisition of Land for Residential Purpose by Aliens
An alien
bringing money not less than Baht forty million as specified
in the Ministerial Regulation into the Kingdom for investment
may apply for acquisition of land for residential purpose not
more than one rai in area, provided also that permission must
be obtained from the Minister. Under section 96 bis of the
Land Code, the application for such acquisition of land shall
be in accordance with rules, procedures and conditions prescribed
in the Ministerial Regulation as follows:
1. In the
case of an alien, who brings money for investment and wishes
to apply for permission to acquire land for residential purpose,
shall lodge an application (Alien 4 Form) to the competent
official under section 71 of the Land Code together with the
following documents:
1.1 An alien
identification card issued by the Police Station in whose
jurisdiction the alien is domiciled or a certificate of residence
issued by the Immigration Division, National Bureau of the Royal
Thai Police Force or a passport indicating the nationality of
the alien;
1.2 Evidences
of an investment in the business or activity that falls under
Ministerial Regulation prescribing rules, procedures and conditions
concerning the acquisition of Land for residential purpose
by aliens B.E. 2545:
1.2.1 Letter
of investment confirmation from bond seller and bonds of
Thai Government, bonds of Bangkok of Thailand, bonds of State
Enterprise or bonds which the Ministry of Finance secures the
capital or interest;
1.2.2 Letter
from the Asset Management Company confirming that an alien
has invested in property mutual fund, property mutual fund
or mutual fund for resolving financial institution problems
established under the law on Securities and Stock Exchange,
and an evidence of investment in such fund;
1.2.3 Evidences
concerning investment in share capital of a juristic person
who is granted promotion of investment under the law on promotion
of investment, certificate of registration as a juristic person,
name list of the juristic person’s share holders, and
a certificate indicating that such juristic person is granted
promotion of investment from the Board of Investment;
1.2.4 Evidences
of engagement in an activity that entitles for being granted
promotion of investment under the law on promotion of investment
according to the announcement made by the Board of Investment,
certificate of registration as a juristic person, name list
of the juristic person’s share holders, and the Board
of Investment’s letter indicating that an activity being
operated entitles for being granted promotion of investment.
The evidences mentioned in para. 1.2.1 to 1.2.4 either the evidence
in one para. or one combines with the other(s) can be used but
the total amount shall be not less than Baht forty million.
1.3 Evidences
of bringing a foreign currency into the Kingdom or the withdrawal
of themoney from a foreign currency account or from a non-resident
Baht account for investment.
Either one or more of the above mentioned evidences can be used
but the total amount shall be not less than Baht forty million.
1.4 In the
case of the land to be acquired is not located in Bangkok Metropolis,
Pattaya City or Tessaban (Municipality); the letter of confirmation
from the Provincial Office of Town and Country Planning is
required certifying that the land to be acquired is located
within a residential zone under the law on Town Planning.
1.5 Letter
of Ministry of Defense or of the agency concerned confirming
that such land is not located in a military safety zone under
the law on Military Safety Zone.
1.6 The sketchy
map showing the location of land seeking for permission.
1.7 In the
case where an applicant has already had right on land by
the time the application is being lodged, an applicant shall
produce such land right document;
2. A person
who is granted permission shall maintain the investment period
not
less than five years. He/she is required to produce the evidence
of possession in the investment in 1.2 as the case may be as
current, which shall be not less than Baht forty million, to
the competent official according to section 71 once a year, on
five consecutive years and each year shall be no later than the
date making the acquisition registration of the aforementioned
land.
3. A person
who is granted permission shall utilized such land for a residential
purpose of his/herself and the family in a way that is not contrary
to the local custom or good living of the local community.
4. A person
who is granted permission shall inform such land utilization
for a
residential purpose to the competent official of land office
according to section 71 within sixty days as from the date of
utilization.
5. A person
who is granted permission shall facilitate the competent official
supervising the use of such land to ensure that the utilization
is in accordance with rules and conditions prescribed in the
law once he/she receives a written notifications from the competent
official under section 71.
6. If a person
granted permission withdraws an investment in the business
or activity before
the due date of investment in 2, he/she shall inform in writing
to the competent official according to section 71 within sixty
days as from the date of making the withdrawal.
7. A person
granted permission shall utilize such land for residential
purpose within two
years as from the date of the land acquisition registration.
8. If a person
granted permission does not comply with the rules and conditions
in 2-6, the Director General shall have the power to order
such person to dispose of the land in a portion of his possession
within the period of not less than one hundred eighty days
and not more than one year. If the time limit elapses the Director
General shall have the power to dispose of such land. Also,
if the person does not comply with the condition in 7, the
Director General shall have the power to dispose of such land.
9. Any foreign
language document shall be translated into Thai language. The
translation shall be certified according to the Ministerial Regulations
(B.E. 2540) issued under the Purview of Administrative Procedure
Act B.E. 2539. (Phraratchabunyat Vithipratibut Ratchakarn Thangpokkhrong
B.E. 2539)
10. In the
case of a person bringing money into the Kingdom to the amount
of Baht forty million for investment and has bought the land
less than 1 rai, if later and within the period of investment,
that person wishes to buy additional land, in this instance,
the documents attached to the current investment can be used
along with the application for acquisition of the additional
land.
Summarized by Knight Frank Thailand
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