Article

1. Understanding the Legal Landscape

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Land Ownership Restrictions

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Foreigners cannot own land in Thailand in their personal name. However, they can own structures—like villas or houses—built in Thailand.

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Ownership Options for Foreign Buyers

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• Leasehold: The most common route for villas. Foreigners may lease land for up to 30 years, with renewal options—commonly referred to as “30+30+30”—though extensions are not automatically enforceable and depend entirely on the landowner’s agreement.
• Thai Company Ownership: Setting up a Thai limited company (with at least 51% Thai ownership) can legally own land. This must be a legitimate business, not just a nominee scheme. Authorities increasingly crack down on nominee abuses.
• BOI Investment Route: Foreigners investing at least 40 million THB for a minimum of 5 years may be allowed to purchase up to 1 rai (~1,600 m²) of land, with prior approval from the government.
  
  

2. Structuring a Secure Purchase

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Leasehold Structures

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Ensure your lease is:

• Registered at the Land Office to be legally binding for terms over 3 years.
• Drafted by an experienced Thai property lawyer, with clauses covering lease renewal, succession, subletting, and resale. 
• Includes a convertibility clause to allow future transfer to Thai nationals or juristic persons, offering flexibility upon resale.

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Thai Company Ownership

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If considering this route, ensure:

• Genuine Thai shareholders hold majority shares.
• It operates as a real business, not just a shell to hold property.
• You follow all regulatory and compliance requirements, avoiding illegal nominee structures.
  
  

Due Diligence Essentials

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• Title Deed Check: Opt for a Chanote title—recognized as the most secure and accurate Land Department‑surveyed title. 
• Verify all permits—building, environmental, etc.
• Conduct a structural inspection to ensure the property (e.g. pool, utilities, drainage) is in good condition.
  
  

3. Transaction Mechanics & Financial Considerations

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Foreign Exchange Requirements

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When purchasing, funds must be:

• Transferred from abroad in foreign currency.
• Accompanied by a Foreign Exchange Transaction Form (FETF / Tor Tor 3) issued by a Thai bank to present to the Land Department for ownership registration.
  
  

Additional Costs & Fees

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Budget realistically:

• Transfer fees: ~2% of government appraised value.
• Lease registration fee: ~1.1% of lease amount.
• Legal and maintenance fees, possibly adding 8–12% on top of the purchase price.
  
  

Financing Options

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• Foreign mortgages are limited—most buyers pay cash, as Thai banks rarely extend loans to foreigners, except occasionally via international banks, and often at high interest rates. 

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4. Benefits of Owning a Pool Villa in Phuket

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Lifestyle & Investment Appeal

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• Premium lifestyle: Private, luxurious living with scenic beaches and tropical climate. Pediatric medical, schools, and infrastructure enhance long‑term comfort.
• Strong rental potential: Demand for short‑term rentals in the Phuket area can yield 6–8% returns.

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5. Key Pitfalls to Avoid

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• Assuming lease renewals are automatic; they are not enforceable by law.
• Falling for nominee or loophole schemes: These can be prosecuted under the Foreign Business Act, with fines and imprisonment at stake.
• Ignoring due diligence and relying only on agent claims—numerous scams involve fake developers or undeclared land issues. 
• Underestimating legal and hidden costs, taxes, or maintenance fees.
  
  

Owning a pool villa in Phuket as a foreigner is possible and rewarding—but success depends on understanding your legal options, securing strong contractual protection, and avoiding shortcuts. Leasehold structures, when properly registered and legally drafted, offer great lifestyle and investment potential. Always proceed cautiously, backed by expert guidance.

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