Condominium Act: succession and inheritance
Foreign ownership of a condo in Thailand is under condominium laws an individual right of the foreigner who qualified under condominium laws for ownership. Once foreign ownership is obtained it is not freely transferable between foreigners (not even by inheritance) and the Thailand Land Registry only allows registration of ownership to another foreigner if he is eligible for ownership pursuant to section 19 of the Condominium Act. Basically the right of foreign freehold ownership ends at death of the foreigner who qualified for ownership under the Condominium Act. Foreign freehold ownership of a condominium is not automatically transferable by inheritance to another foreigner.
The Thailand Condominium Act is not foreign friendly. The Condo Act deals with inheritance of a condominium unit by foreign nationals in section 19/5 (under 1) and section 19/7 of the Condominium Act and only foreigners who qualify under section 19 of the Condominium Act are eligible and allowed to register ownership of the inherited condominium apartment unit within the 49% foreign ownership quota of the condominium (as specified in section 19/2 (bis) of the Condominium Act B.E.2522).
Who (foreigners) qualifies for ownership of a condo in Thailand
Condos in Thailand may be inherited by foreigners through testamentary or intestate succession, however, in order to legally register ownership of the unit with the Land Department a foreign successor of a condo must submit proof that he qualifies for ownership under section 19 of the Condominium Act. Under section 19 only the following foreigners qualify for condominium ownership registration:
- Foreigners permitted to have residence in the Kingdom under the Immigration law;
- Foreigners permitted to enter into the Kingdom under the investment promotion law;
- Juristic persons as provided in Section 97 and 98 of the Land Code and registered as juristic persons under Thai law;
- Juristic persons which are foreigners under the Announcement of the National Executive Council No.281 dated November 24, B.E. 2515 (note: repealed by the foreigner definition in section 4 of the Foreign Business Act) and have obtained promotion certificate under investment promotion law;
- Foreigners or juristic persons regarded by law as foreigners who have brought in foreign currency into the Kingdom or withdraw money from Thai baht account of the person who have residence outside the Kingdom or withdraw money from a foreign currency account.
Qualified and unqualified successors
Section 19/5 of the Condominium Act permits qualified foreigners (section 19 first paragraph above) to register ownership of the condominium unit acquired by inheritance, as long as the registration does not exceed the 49% foreign ownership quota within the condominium. Condominium Act, the foreigner as provided in Section 19 shall dispose of apartment (section 19/5 under 1):
'when the foreigner or juristic person stipulated in Section 19 (a qualified foreign natural or juristic person) has acquired an apartment unit by legacy in the capacity of statutory heir or inheritor under will or by other means (e.g. gift) as the case may be, and when included the apartment already held by foreigners or juristic persons stipulated in Section 19 exceeding the ratio prescribed in the first paragraph of Section 19 bis.'
Section 19/7 of the condominium Act deals with unqualified foreigners (i.e. not listed in section 19, 1 to 5 as listed above). Other foreigners inheriting a condo must sell the unit within 1 year of the acquisition of the unit by inheritance.
'An alien (foreigner) or juristic person regarded by law as alien other than those specified in Section 19 who acquires an apartment by inheritance as statutory heir or legatee or otherwise, as such case may be, shall notify in writing the Competent Official within a period of sixty days from the date of acquisition of ownership of apartment, and shall dispose of such apartment within a period of not exceeding one year from the date of acquisition of ownership of apartment. If disposition is not made within said period, the provisions of the fourth paragraph of Section 19 quinque shall apply mutatis mutandis.'
Ineligible foreign heirs of condominiums
In case of an unqualified foreign heir of a condominium apartment unit the solution could be to become qualified under section 19, e.g he buys the condominium out of the estate for a price at least equal to the government appraised value. In this case he must transfer foreign currency into Thailand equal to the appraised value and exchange it to Thai baht and pay transfer taxes. By exchanging the amount of foreign currency into Thai baht inside Thailand he is able to show a FET-form and qualifies for ownership registration under section 19 No. 5 of the Condominium Act.
When it comes to inheritance by foreigners the Condominium Act is not foreign friendly and in general foreign heirs must dispose of the unit acquired by last will or succession laws within 1 year of the date of acquisition by inheritance. If the successor fails to dispose of the condo the Director-General of the Land Department is authorized to dispose of the condominium and retain a fee of 5% of the sale price before any deductions or taxes.
Inheritance of a leasehold condominium apartment
Inheritance of a leasehold condominium is limited by laws relating to succession of lease right under the Civil and Commercial Code and not governed by the Condominium Act read more...
Note: Some lawyers aiming their services at foreigners incorrectly argue that a foreign heir pursuant to sections 1599 and 1600 civil and commercial code (lex generalis) obtains all the testator's or deceased person's rights, duties, and liabilities, except those which by law or by their nature are purely personal to the testator. Therefore they argue this includes the right of foreign ownership of the testator under section 19 of the condominium act. This is wishful thinking as the Condominium Act (lex specialis) is clear on the subject of foreign ownership and succession. If nothing was specified about this subject in the Condominium Act they may have had a point, however this is not the case.