MEASUREMENT
Thai land measurements are fairly simply – being a combination of “imperial” and metric measurement systems. Starting off with a Wah, which is taken as being 2 metres. This is squared to produce 1 sq wah which called a “Talang wah” = 4 sq metres. 100 of these = 1 ngan (400 sq m). 4 Ngan = 1 Rai (1,600 sq m = 400 Talang Wah). So when you see measurements of say 2 Rai –3ngan –35Talang Wah, that is 3,200+1,200+140 = 4,540 sq metres. 1 Acre (4,047 sq m)= approx 2.53 Rai and 1 Hectare (10,000 sq m)=6.25 Rai exactly.

LAND TITLING
Apart from Condominium ownership and erecting building on land not owned (both covered below), land titling can be quite complicated. There are various levels of land titling – from a simple right of possession through to a full title as we know it in the Western world. This full land title deed is called “Chanod” and is backed by such as being such as being recorded by government using GPS to record both the area and boundaries. The Chanod paper itself is normally of a few pages and shows a surveyed plan of the land, various registration numbers, previous owners and mortgage history. Beware of photocopies and make sure that official chops, notations and the Garuda (the official Government authority crest) are all clear and readable. This is an extremely valuable document – just like title deeds in Europe and losing it will give all sorts of problems. Fortunately, most land and property that is traded on the Eastern Seaboard has Chanod title. However, there will still be cases where a lesser title is only available – such as NOR SOR SAAM and NOR SOR SAAM GOR – usually in undeveloped areas in the countryside. This may still be acceptable and it is often possible to upgrade to Chanod over time. However, we are getting into a very specialized are and it is essential to seek legal advice in these cases. Although land prices may well be lower for these lesser titles, it may well be prudent to discount any property without Chanod title. Buying land for subdivision is a specialized area and involves many local and central government department, building codes and suchlike. Again, an area for experts. Condominiums are looked below under Ownership. Erecting buildings on land not owned does happen and this is invariably where a foreigner has taken a long lease (usually 30 years).

OWNERSHIP BY FOREIGNERS
Basically, Thai law does not allow a foreigner to own hand in Thailand, although they can own the buildings thereon. There are two notable exceptions to this strict law. Firstly, where a foreign company has Board of Investment (“B.O.I.”) approval and the land is part of the project (usually manufacturing).Even then, the ownership is very much tied in with the overall B.O.I. terms. Secondly, a new law (Land Code Section 96,2002) allows and Alien to buy up to one Rai for his or her residential purposes in metropolitan areas such as Bangkok or Pattaya providing they also invest at least 40 million Baht for five years in such as government bonds, recognized property mutual funds or B.O.I. projects. Permission for this needs to be obtained from the Interior Ministry and the ownership is monitored by the Lands Department. Apart from these two rare exceptions, both partnerships and companies also fall under the strict land ownership by foreigners prohibition – should the foreigners control too large a share. The Alien Business Law, which regulates the investment in land by foreigners, states that “land trading” is prohibited to foreigners. A foreign-controlled company is defined under Thai land law, and states that any Thai registered companies or partnerships with more than 49% of companies total capital, or more than half the shareholders being non-Thai, are considered foreign. It is often difficult for even a company with a 51% Thai/49% foreign ownership to purchase land – particularly if you are using an inexperienced lawyer.

PRACTICAL SOLUTIONS TO LAND OWNERSHIP

• Leasing the land – Currently, Thai law allows a maximum term of 30 years for a lease of land. It is usually possible to extend this lease each 30 years. Currently, at the end of each term, both the lessor and lessee (‘seller’ and ‘buyer’) must register the renewal with the Land Department and pay government fees, and other expenses, such as stamp duty. This gives effective “ownership” of the land and has become a popular choice. The downsides include the Lessor not wishing to renew, any future law changes and the fact that you have invested capital into a very personal investment, not easily tradable.

TAXATION
There is not a great deal of information readily available on this important issue and advice should be sought from such as accountants and tax lawyers. How much Stamp Duty is payable on purchase/sale? What are the ramifications of owning a property through a company structure?

On and ongoing basis, there appears to be two main taxes applicable on property owners in Thailand, Land Tax and Structures Usage Tax. The former is a very small tax levied on land ownership equivalent to just a few Thai Baht per Rai per year. Structures Usage Tax is applicable at the rate of 12.5% on the actual (or assessed) gross rental value of the property. Lessees are not subject to this tax but may be required by the developer to pay an “annual ground rent” instead. A third tax is Withholding Tax – payable on most income streams earned in the Kingdom. Mainly applying to payers of income (i.e. employers) so as to capture tax at source, rents also fall under this category. This form of income tax may also apply to sales of immovable property if the sale is made for commercial purpose and it is essential that such income must be included as assessable income. Nevertheless, from January 2003, gains from sales of residential buildings shall not be included as income if such gains are spent on purchasing a new home within one year before or after selling the primary residence. Again, it is vital to assess the ramifications of taxation on buying and selling property, whatever method is used to “own” the property or properties in question.

BUILDING CODES AND PLANNING
Moving into the area of construction, you will need professional advice from qualified people such as architects and engineers – so as to understand local planning codes and practices. Like Hong Kong and most other SE Asian countries, the principal engineer or architect “signs off” once a building is completed, taking responsibility that the building is sound and that it complies with the prevailing building codes. In the event of any failure or breach, that person is held liable. In the Western world, such professionals would carry adequate indemnity insurance to cover any claims against them. It might “authorized person” carries – or whether he or she is financial enough not to do “a runner” in the case of a building collapse for example. Such an event is treated as a criminal act in the Kingdom and penalties can be very severe where there is loss of life.