As a general rule, the owner of the land becomes the owner of the things fixed to, or forming a body with the land (section 139 Civil and Commercial Code). However, buildings as distinct from its land (the land must be N.S.3, N.S.3.G, N.S.4.J titled land) are a form of immovable property (Supreme Court) that can be owned separate from its land. The owner of the building does not have to be the same as the owner of the land. The owner of a building may also be a foreigner. Foreigners may not own the land freehold, they may own the building built upon the land freehold.

Buildings (apart from condominiums) do not have any form of title document but their sale can be registered at the local Land Office. Proof of ownership can be established either by a building permit in the foreigner's name or the official land office 'sale agreement' signed and administrated at the local land office. The land office is the competent authority for administration and transfer of ownership of a building.

The procedure is as follows:

• If buying from a developer (depending on the sale and tax structure and liabilities the developer chooses) the sale of a house is either by (1) a sale and purchase agreement or (2) a construction contract with a building permit in the purchaser's name. The sale and purchase agreement as offered by the developer must be followed by a land office sale agreement signed and administrated at the land office.
• In case an individual person is developing a plot of land the building permit issued in the name of that person and administrated at the land office will be proof of ownership.
• Sale of an existing building requires the current owner (as registered at the land office in a previous sale agreement or building permit) and purchaser to sign a land office sale agreement (issued by and signed at the land office), followed by a public announcement/ posting of the sale for 30 days before transfer is allowed. The land office issues 4 copies of the 30-day announcement to be put up at specific locations. The transfer of a building will take at least 30 days, but usually 40-days. The 30 day period is to see if anyone wishes to contest the ownership over the house.

If the seller can't show a building permit or land office sale agreement this is most likely because the house was illegally built. Unregistered houses are being sold to foreigners, since foreigners are less likely to check the registration nor follow the official procedure for the transfer of a house.

A right of superficies further specifies the rights of the owner of the building towards the land, meaning the term and could include a clause stating what should happen to the house when the right to possess the land (lease and/ or the right of superficies) ends.

The Right of Superficies is a transferable and inheritable interest in land giving for a specified term the right to own or acquire buildings construction in, on or above the land owned by another. The Right of Superficies does not give the exclusive right of possession and use of the land, therefore, the right of superficies should be combined with a land lease. The rights of superficies is a real right interest in land (opposite to personal rights), meaning it will follow the freehold title of the land and is enforceable against third parties. A superficies in a renewable lease structure (meaning a registered 30-year lease combined with a separate right of superficies) should be registered for the maximum term, 30-years.

A superficies can include:

• Renewal option (promise)
• Option (promise) to purchase the land upon expiration of the superficies
• Offer (promise) by the owner to purchase the building for the market value upon expiration

The right to own a building upon someone else's land directly relates to the rights towards the land (lease, usufruct, superficies). On expiration, usually after 30 years, the building will remain on someone else's land without a legal right to possess the land, therefore the rights to possess and use the land must be renewed and agreed upon, and if parties can't agree will depend on a court's decision.

Proof of ownership should not be confused with the House Registration document (Ta bian Baan) or blue book (Thor.Ror.14) or yellow book for foreigners (Thor.Ror.13)), which is only a register of the house and its occupants (District Amphur). The house registration book/ Tabian Baan is under Thai law an official document identifying the house. It gives the full address of the house at the book's first page. It is not necessary to have the name of the owner in the house book.

Unless the foreigner has residency in Thailand the foreign owner can't be registered as the owner of the house in the house registration book. This is not relevant as this document just identifies primarily the address of the house and may include it's occupants and owner (this is not required). The house book is required for certain procedures, transfer and registration of a motorbike or car, application for telephone line, electric, etc.

For individual land owners if they lease out their property Building and Land Tax shall be collected at the rate of 12.5% of the yearly rental according to the lease agreement or the annual value assessed by the Land Department, whichever is higher. The annual assessed value means the amount of money which the property may reasonably be gained from the lease out of a property for each year if the property is offered for lease.

If the land and buildings or any other improvements is owned by a company the company is required to pay Building and Land Tax even if it is actually the residence for the foreign director and the company does not receive any income out of it or does not operate a business.

A common clause in a lease is: 'The lessee agrees to pay to the Lessor any and all taxes, if any, beginning with taking possession of the property and during the term hereof which may be levied upon or assessed against the property and all interests therein and all improvements and other property thereon, whether belonging to Lessor or Lessee. The Taxes are payable annually in advance beginning on the Commencement Date and subsequently at the first of each calendar year whereby for the first year of the term hereof the Taxes shall be prorated as of the Commencement Date and taxes for the last year of the term hereof shall be prorated as of t he expiration of the term'.

Owner-occupied residences are exempt from Building and Land tax for the first property (the second or more properties are not exempt). If the house on the leased land is owned freehold and owner occupied the house is exempt from Building and Land tax. It is the owners responsibility to inform the local authorities (Or.Bor.Tor) and pay this tax before the end of February each year. The relevant authorities are not active in collecting Building and Land tax, as it is the responsibility of the lessor to come forward and pay this tax.

There is also a tax on non-rental property (local development tax) imposed upon the person who either owns or is in possession of the land without a building. The rate depends on location and land classification and assessed value, and varies from 0.25% to 0.95% a year.

Transfer tax
The transfer of a house as immovable property is subject to withholding (income) tax, transfer fees, stamp duty, business tax. There is no fixed formula for sharing these costs and 'who pays the transfer tax' is part of the overall price negotiation. The last place you want to be working out such details is when you arrive at the Land Office (read more transfer tax)

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