Call us now:
Why is understanding the legal framework essential to buy a house in Koh Lanta?
The legal framework for buying a house in Koh Lanta is governed by the Land Code Act B.E. 2497, which prohibits foreign nationals from owning land in Thailand. This restriction applies nationwide and therefore also applies in Koh Lanta. Nevertheless, Thai law provides lawful alternatives that allow foreigners to acquire residential property rights without breaching the legislation.
While Thai law does not allow freehold land ownership by foreigners, it still permits several legally recognised structures. Foreign nationals may secure residential interests through long-term lease agreements, condominium purchases, or by constructing a house on leased land. Thai law regulates these options strictly, and foreigners must follow the correct procedures to ensure legal compliance.
Get expert legal guidance.
Table of Contents
Step 1: Select the right type of property to buy a house in Koh Lanta
Foreign nationals interested in acquiring residential property in Thailand must first understand the legal limitations on land ownership, as set forth by the Land Code Act B.E. 2497. While they are prohibited from owning land outright, the law permits alternative legal mechanisms which make it possible to buy a house in Koh Lanta in full compliance with Thai regulations. These mechanisms include long-term lease agreements, acquisition of condominium units, and construction of a house on leased land.
Leasehold agreements: a secure alternative to land ownership
One of the most widely used legal options is the leasehold agreement. According to the law, land can be leased for residential purposes for a maximum term of 30 years, but it cannot be renewed.
The lease agreement must be registered with the Land Department to have full legal effect. Registration ensures that the lease is enforceable against third parties and binding throughout its duration. It is also recommended that the agreement include provisions on succession rights, particularly if the foreign lessee wants to pass the property interest to heirs.
Payment under a leasehold agreement can be made as a lump sum for the entire lease duration or divided into periodic installments. The payment structure is subject to mutual agreement between the parties. While lump sum payments are more common in resort areas like Koh Lanta, both options are legally permissible.
Condominium ownership: freehold title for foreigners
A more straightforward form of ownership is the acquisition of a condominium unit. Under the Condominium Act B.E. 2522, foreigners may acquire freehold ownership of units in a condominium project, as long as foreign ownership does not exceed 49% of the total floor area of all units in the building.
This structure grants the buyer a full ownership title (Chanote) over the unit, which is registered directly in their name at the Land Office. It is considered the most secure and permanent form of ownership available to foreigners in Thailand.
However, in Koh Lanta, the number of properly registered condominium projects is limited. Buyers considering this option must ensure that the development:
Holds a valid condominium license issued by the Land Department
Has not already reached its foreign ownership quota
Is in full compliance with all building regulations and co-ownership rules
Condominium ownership also comes with shared obligations, such as maintenance fees and participation in the juristic person’s general meetings. Buyers must review these obligations in the co-ownership regulations before signing.
Despite the limited availability, purchasing a condominium unit remains the most direct way for a foreigner to buy a house in Koh Lanta with a freehold title, provided that the project is properly registered and available.
Building a house on leased land
Another commonly used structure involves constructing a house on leased land. This option combines the long-term stability of leasehold with the ability to personalize the residence. In this arrangement, the foreigner leases a plot of land for up to 30 years. With the landlord’s written consent, the foreigner can proceed to build a residential house.
Thai law allows the separation of ownership between land and building. This means that the foreigner can be registered as the owner of the building, even if the land remains leased. To achieve this, the buyer must:
Obtain a construction permit from the local Municipality Office
Ensure the lease agreement expressly allows for construction
Register the building ownership with the Land Department upon completion
This structure offers substantial flexibility and control over the design and use of the house. However, it must be supported by strong legal documentation, especially to address renewal issues, succession, and rights of removal or compensation at the end of the lease term.
In all cases, professional legal assistance is recommended. This ensures that the documentation complies with Thai law and that the right to buy a house in Koh Lanta is executed through a legally secure, stable, and enforceable structure.
Step 2: Execute a due diligence to buy a house in Koh Lanta
Before proceeding with any property transaction, conducting thorough legal due diligence is essential. The first step is verifying the status of the land title. The Chanote (Nor Sor 4 Jor) is the most secure land title, granting full ownership rights and enabling registration at the Land Department. Other types of land titles may have limitations regarding transferability, development, or registration.
The buyer must also ensure that the seller holds legal ownership and has the right to transfer the property. This involves reviewing the title history, checking for any existing mortgages or liens, and confirming there are no ongoing legal disputes affecting the land. This is especially important in Koh Lanta, where informal succession practices and lack of registration can lead to conflicting claims.
A thorough legal due diligence also includes reviewing the zoning laws that apply to the land. Some plots may be restricted from residential or commercial use due to environmental protections, coastal setbacks, or national park boundaries. Without confirming these details, the buyer risks acquiring property that cannot be legally developed or occupied.
Step 3: Sign the reservation Agreement to buy a house in Koh Lanta
Once due diligence is completed and the parties are ready to proceed, they typically enter into a Reservation Agreement. This document formalizes the intent to proceed with the transaction and usually includes a commitment from the seller to withdraw the property from the market. At this stage, the buyer typically pays a reservation deposit, which may or may not be refundable, depending on the agreed terms.
The Reservation Agreement acts as a transitional step before signing the main contract. While not legally binding in all aspects, it establishes both a moral and financial commitment, paving the way for the drafting of the Sale and Purchase Agreement or Lease Agreement.
Get expert legal guidance.
Step 4: Sign the Sale and Purchase Agreement (SPA) to buy a house in Koh Lanta
The Sale and Purchase Agreement (SPA) is the central legal instrument governing the property transaction. It defines the rights and obligations of both parties, outlines the agreed price and payment terms, and includes clauses regarding the transfer of ownership, conditions precedent, warranties, and the allocation of taxes and fees.
If the transaction involves a leasehold structure, the SPA may be structured as a Lease Agreement. This lease must be signed before witnesses and registered at the Land Department if the term exceeds three years. The agreement must clearly specify rights of renewal, succession, and any construction rights granted to the lessee.
The contract must also outline penalties in case of breach and establish the jurisdiction for legal disputes. Proper legal drafting is essential to ensure the agreement is enforceable and complies with Thai civil law.
Step 5: Execute the payment to buy a house in Koh Lanta
Foreign buyers intending to buy a house in Koh Lanta must comply with Thailand’s foreign exchange control regulations. In case of condominium purchases, funds exceeding USD 50,000 must be transferred into Thailand in foreign currency, and the receiving bank must issue a Foreign Exchange Transaction Form (FETF). This form must specify that the funds are intended for the acquisition of a condominium unit.
Although a FETF is not required for leaseholds or construction projects, buyers are advised to obtain a bank confirmation letter evidencing the purpose of the transfer. This documentation may be requested by authorities and is also essential for future resale or repatriation of proceeds.
Failure to comply with these rules can result in difficulties during the registration process or in the future resale of the property.
Step 6: Proceed with the transfer of ownership to buy a house in Koh Lanta
The final step in the transaction is the transfer of ownership or lease registration at the Land Department. Both parties, or their authorized representatives, must be physically present. All necessary documents must be submitted, including identification, the SPA or lease, proof of fund transfer, and construction permits if applicable.
The Land Office will collect transfer fees and taxes, which vary depending on the nature of the transaction. These include a 2% transfer fee, stamp duty or Specific Business Tax (depending on the holding duration), and withholding tax, which is 1% for companies or a progressive rate for individuals.
Once the registration is complete, the buyer receives the updated title deed (for condominiums) or lease registration (for land leases). Ownership of structures built on leased land must also be registered in the buyer’s name.
Obtaining the Yellow Book and Pink Card : additional steps
After the property is registered, foreign owners may request a Yellow House Book, also known as the Tabien Baan. This residential registration document is specifically issued to foreigners. It is essential for interacting with Thai administrative services and may be required for utilities, vehicle registration, or immigration procedures.
Along with the Yellow Book, foreigners residing in Thailand may apply for the Pink Thai ID card. This official identification card facilitates access to public services and enhances the legal visibility of foreign residents in Thailand.
While these steps are not mandatory for property ownership, they simplify various administrative procedures and are strongly recommended for long-term residents.
Conclusion
To buy a house in Koh Lanta legally and safely, foreign buyers must navigate a well-defined legal framework. This starts with the prohibition on land ownership and moves towards alternatives that comply with Thai law. The main options available are leasehold structures, condominium acquisitions, and building a house on leased land. Each of these options requires careful planning and execution.
The entire process, from selecting the property, conducting legal due diligence, securing a reservation agreement, formalizing the SPA, managing foreign fund transfers, and registering the transaction, requires strict compliance with Thai laws and regulations. Proper legal guidance at each step is essential.
Registering residence documents, such as the Yellow Book and Pink ID card, strengthens the buyer’s legal position and ensures administrative integration in Thailand.
In addition, in 2022, a reform bill aimed to relax foreign ownership restrictions on condominiums by raising the quota from 49% to 75%. However, this measure was not adopted. The rejection reflects the Thai authorities’ reluctance to further open the real estate market to foreign investors. It is important to monitor these developments and seek advice from a property lawyer.
If you need further information, you may schedule an appointment with one of our lawyers.
FAQ
No, foreigners are not allowed to own land in Thailand, including in Koh Lanta. However, they can legally lease land for up to 30 years or buy a condominium unit if within the foreign ownership quota.
Yes, you can own the structure even if the land is leased. Ownership of the house must be registered at the Land Office with a valid construction permit and lease agreement.
Yes, funds used to buy property must be transferred from abroad in foreign currency. For condominiums, a Foreign Exchange Transaction Form (FET) is required if the amount exceeds USD 50,000.
A lease can be registered for up to 30 years. Renewal is possible, but it must be clearly stated in the contract and re-registered with the Land Department.