Legal Confusion Clarified on Thai Spouses Owning Property

Last updated: Wed 3 Jun, 2009 2:49 pm | Viewed: 623 times

We have received a number of comments on the site about the recently published reports quoting the Director of the Land Department warning that the use of a Thai spouse in owning land for a foreigner was illegal and possible revocation of the title was possible. A number of very nervous foreigners have asked for some clarification of the law and along those lines we spoke to Michael Greth of the International Law Office (ILO) here in Phuket who are one of the islands longest serving firms. His comments are:
‘A recent article in the Phuket Gazette discussed the legality of land purchase by a Thai spouse with monies provided by her foreign husband attracted attention and concern in the foreign community residing in Thailand.
The article published in the Phuket Gazette quoted a statement made by a high land department official in Phuket that basically every land purchase by a Thai (spouse) not having sufficient funds to purchase land with her own monies but doing so with monies received by her foreign companion violates and conflicts with the relevant laws of Thailand. It was also stated that the authorities may investigate and in the event that it is disclosed that land had been acquired in the described way the land title may be revoked at any time. As a legal alternative, the official referred to the Condominium Act allowing foreign investors to purchase property in Thailand as long as the foreign freehold quota of up to 49 % of the sellable area in such project has not been sold out yet.
The above statement needs to be read very carefully as the wording used seems to be very broad and may not apply to each and every case. The prevailing view is that the applicable laws of Thailand, particularly the Land code, prohibit foreign persons to acquire freehold interest in land (except very limited exceptions). Further any legal structure which is ultimately designed to circumvent said laws such as „nominee landholding“ through Thai citizens or use of Thai company’s being a vehicle to acquire (indirect but absolute) control over land may be deemed as illegal.
However, it was also understood that a land purchase by a Thai national using funds which were given to him/her as a gift by a foreign national shall be in compliance with the applicable laws as long as the foreign national does not acquire (indirect) control over the land through execution of additional bogus legal documents between the Thai landholder and the foreign backer. Therefore, the statement made by the land department official may be nothing else than referring to the legal situation which always applied in the past that land purchase by Thai national is legal as long as no legal structure is implemented giving foreign person (indirect) freehold and/or absolute control over the land, and at the same time just „using“ funds provided by such foreign investor to purchase land for the benefit of a third party rather than using „own“ monies received as a gift enabling him or her to purchase land without acting as third party landholder.’
We hope this gives some level of comfort to those who find themselves in this type of land owning situation and as always recommend that individuals contemplating property purchases seek qualified legal representation.

Bill Barnett responds: A lease is registered at the land department and falls under rather strict guidelines so this at face value would look to be a good solution but again its best to obtain legal advise.
You do not really know what you or the law are talking about do you?

Bill Barnett responds: Interesting comment, and we have no claim to being legal advisors. We spoke to both Belmont and Limchoen and International Law Office to get get their reads on the legal issues and advise, so we presume given their track record and number of leases done in Phuket they do know what they are talking about, and have informed the readers accordingly, and have also advised readers to seek legal advise which seems to be the prudent thing to do. We are always glad to have feedback to improve content, thanks.

Neill M Campbell, Tue 07 Jul, 2009 4:54 pm

The whole things smells like a sewer and effectively means that if the land dept. rules that a foreign owner is deemed to exercise control over his wife's property, they can then stand to lose it. Exercising control can be for instance by turning away someone from your land or front door (who may be a land dept.official or otherwise)If really all these remarks amount to nothing else but a meaningless bark then why make them every once in a while?

Ian, Wed 10 Jun, 2009 9:25 am

As a thai person who is giving comment here, i dont see a problem by using money from the foreign husband to purchase a house to live in together, as two people are married, therefore, it is not wrong and not consider illegal to use husband money to a property together!! one of those Thai laws for foreigners to purchase the properties legally is to marry Thais, and it is not always that all the foreigners married Thai just to purchase some properties, i disagree with this new law, as now the world eco crisis, and property sales very slow aswell, main income of Phuket is from foreigners, so i wish Phuket good luck!

Bill Barnett responds: Well said and appreciate the point of view.

Thai Person, Sun 07 Jun, 2009 9:59 pm

Just read through the new Phuket Gazette which includes an interesting article with another Land department official clarifying on the recent statement given by his colleague that Thais shall not be allowed to buy property with funds received by a foreigner. I understand that this official supports the opinion of the commentator above that only nominee landholding or circumenvention of the relevant laws shall be illegal, however, property purchase with "foreign funds" in compliance with the law as long as the foreign money source waives any rights to the used funds which is nothing else than giving a gift to somebody.

Bill Barnett responds: This looks to be the official party line in the use of nominees. We will keep updating our information on this as it is a relevant story for our readership.

David, Sat 06 Jun, 2009 5:43 pm

I presume if your spouse buys the property in their name and you have a 30 year lease that is not absolute control s

Peter Allen, Fri 05 Jun, 2009 5:39 pm

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