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Professional Agent in Luxury Beach Front Villa and Sea View Apartment
in Phuket
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
Trading
as
Knight Frank Chartered (Thailand) Co., Ltd
Knight Frank Phuket Co.,Ltd
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