Property Title Transfer in Thailand

Investing in property in Thailand, whether for residential, commercial, or investment purposes, is a significant financial decision. One of the most important steps in the real estate transaction process is the property title transfer—the legal procedure by which ownership of a property is officially transferred from the seller to the buyer. This process is governed by Thai property law and must be completed at the Land Department to ensure the new owner’s legal rights are protected.

Both Thai nationals and foreigners must carefully follow the procedures involved in title transfer to avoid future disputes, legal issues, or ownership challenges. This article outlines the key aspects, procedures, legal considerations, and requirements for transferring property titles in Thailand.

Importance Property Title Deeds in Thailand

Before diving into the transfer process, it is essential to understand the types of land title deeds in Thailand. Not all titles provide the same rights, and some may restrict the ability to sell, lease, or transfer ownership.

The main types include:

1. Chanote (Nor Sor 4 Jor): The highest form of land title with full ownership rights and clearly surveyed boundaries. Ideal for buying and selling.

2. Nor Sor 3 Gor: Recognized title with confirmed land boundaries, but less precise than Chanote. Can be sold or transferred with legal registration.

3. Nor Sor 3: Similar to Nor Sor 3 Gor, but land boundaries are not confirmed by aerial survey. Transferable but less secure.

4. Sor Kor 1 and others: Limited usage rights and cannot be legally transferred in the same way. These titles are not recommended for investment.

For condominium ownership, Condominium Title Deeds (Or Chor 2) are issued, which list ownership percentage in the building’s common areas.

Who Can Own Property in Thailand?

Thai nationals can own land and property freely. However, foreigners face restrictions under the Thai Land Code:

• Foreigners cannot own land directly, with few exceptions (e.g., BOI promotion, US-Thai Treaty).

• Foreigners can own condominiums, as long as foreign ownership in the building does not exceed 49% of the total floor area.

• Foreigners can also lease land for up to 30 years (renewable) or own buildings separate from the land.

In cases where land ownership is involved, it is crucial to work with a qualified legal advisor to structure the transaction legally and effectively.

Process of Property Title Transfer in Thailand

Transferring property in Thailand involves several legal and administrative steps. Here’s an overview of the standard procedure:

1. Due Diligence

Before initiating the transfer, a thorough due diligence in Thailand check is essential. This involves verifying the legitimacy of the title deed, ensuring the land is free from encumbrances or legal disputes, and confirming the seller’s ownership.

Due diligence should include:

• Land Office record checks

• Reviewing zoning regulations

• Verifying building permits (if applicable)

• Checking for mortgages, leases, or liens on the property

2. Sales Agreement

Once both parties agree on the price and terms, a Sales and Purchase Agreement (SPA) is drafted. This contract outlines:

• Sale price and deposit

• Payment schedule

• Title transfer date

• Obligations of both parties

• Penalties for breach

The SPA should be reviewed by a legal professional to ensure compliance with Thai law and fairness for both parties.

3. Preparing for Transfer

Prior to the title transfer, the buyer and seller (or their legal representatives) must prepare the following documents:

• Original title deed

• SPA

• Seller’s ID and house registration

• Buyer’s ID or passport

• Power of attorney (if applicable)

• Foreign exchange documents (for foreign buyers transferring funds into Thailand)

For foreigners, the Foreign Exchange Transaction Form (FETF) from a Thai bank is necessary when the purchase involves foreign currency over USD 50,000—especially for condominium ownership.

4. Transfer at the Land Office

The actual transfer takes place at the Land Department in the province where the property is located. Both parties (or their authorized representatives) must be present. The Land Officer will:

• Verify all documentation

• Confirm identities of the parties

• Calculate and collect taxes and fees

• Register the new owner on the title deed

Upon completion, the buyer receives the updated title deed with their name officially recorded as the new owner.

Taxes and Fees Involved in Title Transfer

Several government fees and taxes are associated with a property title transfer:

1. Transfer Fee: 2% of the appraised value (usually shared between buyer and seller, but negotiable)

2. Stamp Duty: 0.5% of the sale price (applies if exempt from Specific Business Tax)

3. Specific Business Tax (SBT): 3.3% (applies if property is sold within 5 years of purchase, unless exempt)

4. Withholding Tax: Based on seller’s income (individual or company), ranging from 1% to 5%

Tax responsibilities should be clearly outlined in the SPA to avoid disputes during the transfer process.

Special Considerations for Foreigners

• Foreign buyers purchasing a condominium must ensure the unit is within the foreign ownership quota (49% of total floor area).

• The funds used to purchase the condo must be transferred from abroad and recorded through a Thai bank with an FETF form.

• Foreigners leasing land must register the lease at the Land Office for legal enforceability.

Working with a legal expert or property lawyer is essential to ensure all documents and procedures meet legal requirements.

Common Pitfalls to Avoid

• Buying land under invalid or restricted titles

• Skipping due diligence

• Signing contracts without legal review

• Assuming informal agreements are legally binding

• Failing to register leases or structures separately

Proper legal advice and a well-structured contract can prevent costly mistakes and protect your investment.

Conclusion

Transferring property titles in Thailand is a structured legal process that ensures property rights are clearly defined and enforceable. For both Thai nationals and foreigners, understanding the requirements, completing due diligence, and complying with legal procedures are crucial steps to secure ownership. By working with experienced professionals and following the proper legal process, buyers can enjoy the benefits of property ownership in Thailand with peace of mind.