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The legal framework to buy a condo in Pattaya
Foreigners buying a condo in Pattaya have to comply with several pieces of legislation, mainly the Land Code Act B.E. 2497, the Condominium Act B.E. 2522, as well as the Thai Civil and Commercial Code. These laws impose strict restrictions on land ownership. Foreigners are not allowed to own land outright. However, under certain conditions, they may purchase an apartment in Pattaya in a condominium-type building or occupy a house through a duly registered long-term lease agreement.
This article will guide you through all the steps necessary to purchasing a condominium in Pattaya as a foreigner, including legally compliant investment methods and procedural formalities.
Table of Contents
Step 1: Choose between full ownership and leasehold property
Foreign investors wishing to buy an apartment in Pattaya must first identify the options that are legally permitted under Thai law. There are two main forms of acquisition: purchasing a licensed condominium within the legal limits provided for by law, or signing a duly registered long-term lease agreement.
Buying a condominium apartment: full ownership subject to conditions
Under the Condominium Act B.E. 2522, a foreigner can become the full owner of an apartment located in a condominium provided that two criteria are strictly met.
The first criterion is that the building must have an official condominium license issued by the competent authorities. Without this license, the property cannot be registered as freehold in the name of a foreign national.
The second criterion requires that the maximum quota of 49% of the building’s living space that can be owned by foreigners be respected. In other words, foreigners may only jointly own a maximum of 49% of the lots in the project, with the majority (at least 51%) remaining in the hands of Thai nationals. The purpose of this rule is to ensure that Thai nationals retain majority control of condominiums.
Signing a 30-year lease agreement: an alternative with exclusive right of use
When the purchase of a condominium is not possible, either because the building does not have the required license or because the foreign quota has been reached, foreign investors may consider signing a long-term lease agreement, which constitutes an exclusive right to use the property without transfer of ownership.
This lease, which has a maximum term of 30 years and is non-renewable, must be drawn up in writing and registered with the Land Office in order to be legally enforceable against third parties. Registration of the lease is a condition of its validity. If it is not registered, the lease would be limited to a term of three years and would not protect the occupant in the event of sale or death of the property owner.
The lease may provide for different payment terms: it may be paid in a single installment at the time of signing, or in installments throughout the term of the lease. These terms must be formalized in the contract.
Step 2: Conducting due diligence to buy a condo in Pattaya
Once a suitable property or lease option has been identified, conducting a due diligence is crucial to avoid legal risks. The due diligence process includes verification of land title and ownership, ensuring that the property is free from encumbrances, and confirming compliance with zoning and construction regulations.
The most secure land title in Thailand is the Chanote (Nor Sor 4 Jor). It provides full ownership rights and clear land boundaries. Other types like Nor Sor 3 or Nor Sor 3 Gor provide only possessory rights and may pose legal complications. A lawyer should confirm that the seller has legitimate ownership or leasing rights over the property.
If the property is held by a company, the buyer should verify the company’s registration documents, including the Company Affidavit, shareholders list, and board resolutions authorizing the sale.
A property lawyer must investigate whether the property is free of encumbrances such as mortgages, servitudes, or litigation. It is also important to verify zoning regulations, road access, and building permits if construction is involved.
Step 3: Signing the reservation agreement
Once the property passes legal checks, a Reservation Agreement is signed. This agreement outlines the buyer’s intent to purchase the property and reserves it for a limited time. It usually involves the payment of a reservation deposit and defines the agreed price, timeframe for signing the final contract, and penalties for withdrawal or breach. Although this contract does not transfer ownership, it secures the buyer’s rights pending the final Sale and Purchase Agreement.
Step 4: Executing the Sale and Purchase Agreement (SPA) to buy a condo in Pattaya
The SPA is the principal legal document that formalizes the transaction. This contract must be written in Thai and often accompanied by an English translation for foreign parties. It includes the identity of the parties, purchase price, payment schedule, legal description of the property, and allocation of tax liabilities and registration costs. For leasehold arrangements, the SPA may also include terms regarding the construction of a condo and obligations of the lessor. The execution of the SPA legally binds both parties to the transaction.
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Step 5: Transferring funds from abroad
When you buy a condo in Pattaya, Thai law requires that all funds used in the transaction originate from outside Thailand. These funds must be converted into Thai Baht by a local bank and documented with a Foreign Exchange Transaction Form (FET Form) for amounts exceeding USD 50,000.
The buyer must ensure that the name on the transfer matches the name on the SPA and land documents to avoid delays or legal disputes. This form is required to complete the property registration and is essential when repatriating funds later.
Step 6: Transferring ownership to buy a condo in Pattaya
To complete the process of buying a condo in Pattaya, the transfer of ownership rights must be officially registered at the Land Department. This step is essential to make the transaction legally binding. Both parties, or their legal representatives, must be present on the scheduled day. The Land Officer will examine the documentation and record the new ownership or lease in the land registry.
The transaction becomes legally effective only after the payment of government duties. These include a transfer fee based on the appraised value, as well as other applicable taxes such as stamp duty, Specific Business Tax, or Withholding Tax depending on the seller’s profile. These amounts and their allocation should be set out in the Sale and Purchase Agreement. Once registration is completed and fees are paid, the legal transfer is final.
Additional steps: Yellow Book and Pink Card
After buying a condo in Pattaya, foreigners are advised to apply for a Yellow Book (Tabien Baan). It is a registration document that proves residency and facilitates interaction with Thai authorities, although it does not confer ownership.
Additionally, the Pink ID Card can be obtained as a national ID for foreigners with a Yellow Book. It simplifies interactions with local banks, hospitals, and government institutions.
Conclusion
The legal journey to buy a condo in Pattaya requires many legal steps—from property selection and due diligence to fund transfers and registration. As understanding the legal framework and choosing the proper legal structuring can get tricky, it is highly recommended to seek legal help when investing t in Chian Mai’s real estate. Foreign buyers should always work with experienced property lawyers to ensure that they remain compliant every step of the way.
FAQ
Yes, under the Condominium Act B.E. 2522, foreigners can own a condominium in freehold if the total foreign ownership in the building does not exceed 49% of the total floor area.
Buying gives you a freehold title and full ownership of the unit, while leasing gives you the right to use and occupy the property for up to 30 years, renewable only by a new agreement.
No, but you must transfer the purchase funds from abroad in foreign currency and convert them into Thai Baht in Thailand to obtain a Foreign Exchange Transaction Form (FET Form).
They vary depending on the seller’s profile but generally include a 2% transfer fee on the appraised value, Specific Business Tax or stamp duty, and Withholding Tax.
Yes, you may rent it out, provided the condominium’s rules allow it. Some projects have restrictions, so this should be checked during due diligence.