Owning a House in Thailand
The owner of the building in Thailand does not have to be the same as the owner of the land.
The general rule under Thai law is that the owner of the land is the owner of the things fixed to, or forming a body with the land (section 139 Civil and Commercial Code).
However, the Supreme Court of Thailand clearly ruled that buildings as distinct from its land can be a separate immovable property that can be owned separate from its land. If the correct procedure has been followed the owner of a building, as opposed to land in Thailand, can also be foreign. In a land lease structure it is recommended to obtain ownership over the building as it gives an additional protection in a lease structure and lowers building and land tax.
The right of ownership of a house upon another man's land always relate to the right to use the land (i.e. the land lease agreement or superficies).
Building ownership title
Buildings in Thailand, apart from condominiums, do not have any form of title deed document but their sale and transfer must be registered at the local land office to be complete. Proof of ownership is normally established either by a building permit (the person named in the building permit is assumed to be the owner) or the official Thai language land office sale contract signed and administrated at the local land office. The land office is the only competent authority for administration and transfer of ownership of a building.
The procedure to obtain ownership over a house structure is as follows:
If buying property from a developer, depending on the sale and tax structure and liabilities the developer chooses, the sale of a house is either by:
- a sale and purchase agreement. The actual transfer sale procedure must take place at the local land office and an official document is issued.
- a construction contract with a building permit (if any) in the purchaser's name.
Building yourself
In case an individual person is building a house on a plot of land the building permit issued in the name of that person is assumed to be proof of ownership. When transferring the house this document will be asked as supporting evidence of ownership in a transfer of ownership.
- 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 address of 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 or occupants in the house book.
Sale and transfer procedure of a house separate from the land
Sale of an existing building requires the current owner (as registered at the land office in a previous sale agreement or building permit) and the purchaser of the house to sign the Thai script land office sale agreement followed by a public announcement posting of the sale for 30 days before actual transfer is allowed and the land office issues the official sale document.
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 takes 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.
Superficies
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. 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. A right of superficies is registered on the title deed. A superficies can used in addition to a land lease.
The rights of superficies is a real right interest in land (opposite to personal contractual rights), meaning it is registered on the land title deed and will follow the freehold title of the land and is enforceable against third parties. A superficies in a long term lease structure should be registered for the maximum term of 30-years.
A superficies contract can include:
- Option of renewal of the superficies
- Option to purchase the land upon expiration of the superficies
- option to purchase the building for the market value upon expiration
Tabian baan, ta bian baan or tar bian baan (yellow or blue house book).
Unless the foreigner has residency in Thailand the foreign owner can't be registered as the owner of the house in the blue 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.. A yellow book can be obtained, depending on the location requirements for issuing this doocument could include a work permit and non-immigrant visa or Thai marriage certificate.
Building and land tax
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.
Read Ups: Building and Land Tax
Transfer tax for a house
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 transfer tax). The assessed value used by the land office depend among others on location, number of floors, materials used.
Read Ups: Transfer Tax Thailand
