Land Laws
land code amendment act

Foreign land ownership in Thailand under a treaty

Foreigners may under section 86 of the Land Code acquire land in Thailand by virtue of the provision of a treaty providing him with the right to own land. Obtaining such acquisition is subject to the provision of the Land Code and the Ministerial Regulations issued under the Land 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,
  • Pakistan.

Since then Thailand has no longer made any treaty with any country allowing foreigners to acquire land in Thailand. However, the Land Code Act has been amended with Section 96 bis providing that since January 19th, 2002, a foreigner 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 permission from the Ministry of Interior mus be obtained and the following rules and conditions must be met:

-------------- rules and conditions------------

  1. Bringing money not less than Baht forty million into the Kingdom for investment and maintaining the investment not less that five years (note this investment must be in BOI approved and specified assets or government bonds beneficial to the Thai economy, in addition to the land purchase)
  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

  1. 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)
  2. 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

THE LAND CODE AMENDMENT ACT (NO.8)

B.E. 2542 (1999)

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BHUMIBOL ADULYADEJ REX.

Given on the 10 th of May, B.E. 2542

Being the 54 th year of the Present Reign

His Majesty King Bhumibol Adulyadej has been graciously pleased to proclaim that:

Whereas it is expedient to amend the Land Code;

BE IT THEREFORE BY THE KING, by and with the advice and consent of the National Assembly, as follows:

Section 1. This Act shall be called the “Land Code Amendment Act (No. 8) B.E. 2542 (1999)”

Section 2. This Act shall come into force as from the day following the date of its plublication in the Government Gazette.

Section 3. The following statement inclusively as Section 96 bis and Section 96 tri in Chapter 8 “Limitation of Right in Land of Alien” of the Land Code.

Section 96 bis. The provisions of an alien who may acquire land by virtue of the provision of a treaty under Section 86 paragraph one shall not apply to alien who bring money to invest as amount specified in the Ministerial Regulation which not less than forty million baht. Thus, an alien shall aquire the land for residence not more than one rai and shall obtain permission from the Minister.

The acquisition of land of an alien in paragraph one shall be in accordance with the rules, procedures and conditions prescribed in the Ministerial Regulation in which shall contain at least the following essential matters:

  1. The type of business invested by an alien shall be benificial to the economic and social of the country or shall be eligible to obtain the promotion of invesment pursuant to the Invesment Promotion Law as declared by the Board of Invesment.
  2. The invesment period needs to be maintained not less than three years.
  3. The location of land permitted for acquisition shall not beyond the confines of Bangkok , Pattaya, Municipality of land specified for residence purpose provided by the law of Town and Country Planning.

Section 96 tri. As alien who obtained permission to acquire land under Section 96 bis and does not comply with the rule or conditions prescribed in the Ministerial Regulation Section 96 bis paragraph two shall have to dispose of the land owned by him within the period of not less than one hundred and eighty days and not more than one year as specified by the Director General. The Director General shall have the power to dispose of such land when the time limit elapes.

An alien who obtained permission to acquire land under Section 96 bis and does not use it for residence within two years from the date of acquisition registration, the Director General shall have the power to dispose of such land.

Countersiged by:

Chuan Leekphai

Prime Minister

Remark: Reason for promulgation of this Act are as follows:

Whereas it is expedient to grant an alien, who bring money to invest in the significant business and bring the benefit to the country's social and economic development, that he/she may acquire land for residential purpose to the amount as specified in the law. This aims at facilitating and providing an alien, who enter into the Kingdom for business purpose, with a promotion factor for investment decision making. This is also to increase the buying power for the business of immovable property being from the economic downtown, as well as to revive the country's overall economy. It is therefore expedient to revise the same to make them more suitable.

(Published in the Government Gazaette Vol. 116 No. 39 Kor dated May 18 th ,B.E. 2542 (1999))

Legal Affairs Division

Department of Land

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Tags: land law, real estate law