Thai Real Estate Regulations and Laws

Published on October 30, 2025 and written by Cyril Jarnias

Thailand, with its pristine sandy beaches, rich culture, and affordable cost of living, attracts numerous foreign investors eager to purchase real estate. However, before embarking on such a project, it’s crucial to understand the specifics of the Thai real estate market and the current regulations. This article will guide you through the essential legal and tax aspects you need to know to invest with peace of mind in the Land of Smiles.

Property Rights for Foreigners: Myth or Reality?

Contrary to what one might think, foreigners do indeed have the ability to acquire real estate in Thailand, but with certain restrictions. Thai law distinguishes between two types of property: land and buildings.

Regarding land, the legislation is very strict. Foreigners cannot directly own land in Thailand. However, there are legal alternatives to work around this restriction:

• Purchase through a Thai company where the foreigner holds less than 49% of the shares
• Long-term lease (up to 30 years, renewable)
• Usufruct (right to use the land for a determined period)

For buildings and condominiums, the situation is more favorable. Foreigners can purchase and own condominium units in their own name, provided that the total number of units owned by foreigners does not exceed 49% of the building’s total floor area.

The Legal Framework of Thai Real Estate: What You Need to Know

The Thai real estate market is governed by several important laws and regulations that every foreign investor should know:

• Foreigners can own up to 49% of the total floor area of a condominium building
• The purchase must be made with funds originating from abroad
• The buyer must obtain approval from the Ministry of Interior

• The maximum lease term is 30 years, renewable
• The lease contract must be registered with the Land Office to be fully enforceable

3. The Town and Country Planning Act This law regulates land use and real estate development. It defines the areas where construction is permitted and the types of buildings that can be constructed in each zone.

4. The Building Control Act This law establishes construction and safety standards that all buildings must comply with. It is particularly important for investors considering construction or renovation projects.

Real Estate Taxation in Thailand: An Advantage for Investors

Real estate taxation in Thailand is relatively advantageous for investors, although it has seen some recent changes. Here are the main taxes and fees to know:

• Primary residence: 0.02% to 0.1% of the appraised value
• Secondary residence: 0.02% to 0.1% for the first 50 million baht, then 0.1% to 0.3% beyond that
• Commercial use: 0.3% to 0.7%
• Undeveloped land: up to 1.2%

2. Transfer Fee When purchasing a property, a transfer fee of 2% of the appraised property value is due. These fees are typically shared between the buyer and the seller.

3. Stamp Duty A tax of 0.5% of the property value or rental amount (for leases) applies when registering the transaction.

4. Capital Gains Tax In Thailand, there is no specific tax on real estate capital gains. However, profits made from the sale of a property are considered income and are therefore subject to income tax, with rates ranging from 0% to 35%.

5. Withholding Tax For rentals, a withholding tax of 15% applies to rents received by non-resident owners.

Rights and Obligations of Owners: Key Takeaways

As a real estate owner in Thailand, you benefit from certain rights but must also fulfill obligations:

• Right to use, rent, or sell the property (subject to legal restrictions for foreigners)
• Right to collect rent
• Right to modify or renovate the property (subject to necessary permits)
• Protection against expropriation (except for public utility projects with compensation)

• Payment of taxes and fees related to the property
• Compliance with condominium regulations (for apartments)
• Maintenance of the property and adherence to safety standards
• Declaration of rental income if applicable

For condominium unit owners, it’s important to note that building management is handled by a juristic person (condominium association). Owners must participate in general meetings and pay common fees.

Regulatory Developments: Towards a Gradual Opening of the Market?

The regulatory framework for real estate in Thailand is evolving regularly, with a trend towards easing restrictions for foreign investors. Here are some recent changes and projects under discussion:

1. Extension of Leasehold Terms The Thai government is considering extending the maximum term of leasehold agreements from 30 to 50 years, or even 99 years in certain special economic zones. This measure, if adopted, would make long-term investment more attractive for foreigners.

2. Relaxation of Land Ownership Restrictions Discussions are underway to allow foreigners to purchase land for residential use, under certain strict conditions (minimum investment, specific location). Although controversial, this project demonstrates a willingness to open the market.

3. Tax Incentives for Foreign Investors The government has implemented tax incentive programs to attract foreign investors to certain sectors, including luxury real estate. These programs may include tax reductions or simplified procedures for obtaining visas.

4. Strengthening Controls on Shell Companies To combat abuse, authorities have strengthened controls on Thai companies majority-owned by foreigners and used to acquire land. Investors must now prove the origin of funds and the reality of commercial activity.

Conclusion: An Attractive Yet Complex Market

Real estate investment in Thailand offers great opportunities for foreigners, with a dynamic market and attractive prices compared to many tourist destinations. However, the complexity of the legal framework and the restrictions imposed on foreigners require a cautious and well-informed approach.

• Understand the different acquisition options available (condominium purchase, long-term lease, Thai company)
• Familiarize yourself with local laws and regulations
• Anticipate tax costs and fees associated with purchasing and holding a property
• Stay informed of regulatory developments that could impact their investment
• Engage trusted local professionals (lawyers, real estate agents, accountants) to structure their investment optimally

With proper preparation and sound advice, real estate investment in Thailand can prove to be an excellent opportunity, whether for a second home, a rental investment, or a retirement project in the sun.