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The legal framework applicable to buying a house in Koh Samui
Are you looking to buy a house in Koh Samui? Under Thai law, specifically the Land Code Act B.E. 2497, foreign nationals are prohibited from owning land throughout the Kingdom of Thailand, including on the island of Koh Samui. This prohibition encompasses both direct and indirect ownership.
Despite this restriction, Thailand’s legal system allows for several legitimate pathways enabling foreign nationals to invest in Koh Samui’s real estate while remaining compliant with national laws. These options can be either a long-term lease according to the Thai Civil and Commercial Code, purchase of a condominium unit freehold, allowed under the Condominium Act B.E. 2522 or establishing one´s own residential home on leased land with appropriate legal documentation.
This article is aimed at providing a full legal overview of the process of buying a house in Koh Samui for foreigners. It describes every legal pathway, requirement, and covers overall covers a step-by step guide to safeguard your investment.
Table of Contents
Step 1: Choose the right type of property to buy a house in Koh Samui
The 30-year leasehold agreement
While Thai law prohibits foreigners to own land, there are many options if you plan to buy a house in Koh Samui. One popular method is to lease land for up to 30 years, as allowed under Thai Civil and Commercial Code. The lease must be executed in writing and registered at the local Land Office to be enforceable against third parties. Under the lease, the foreign lessee has the exclusive right to occupy and use the land as a residence during the term.
Payments plans for the financing of the lease may be arranged on a lump sum or installment basis. The contract may also grant rights to transfer or sublease, provided such provisions are explicitly stated.
Acquiring a condominium unit in full ownership
Buying a condominium unit constitutes a popular and safe way to purchase a house in Koh Samui. The Condominium Act B.E. 2522 allows foreign nationals to own a freehold condominium unit, given that the 49% foreign ownership limit is respected in the building’s entire floor space.
Ownership needs to be registered at the Land Department, and the foreign buyer receive a Title deed in their own name. This process is one of the easiest legal routes to follow as a foreigner wanting to invest in real estate with clear legal protection and transferability.
Constructing a house on leased land
Foreigners can also consider buying a house in Koh Samui by building a house on leased land. Although they cannot own the land, they may own the building constructed on it, provided the lease agreement explicitly grants this right.
Prior to the commencement of construction, the lessee shall secure a building permit in their own name. Construction and lease agreements have to fit with clear covenant clauses such as ownership, rights of use and disposal of the building once the lease is over. The building can be moved, sold or renegotiated, depending on the lease. This strategy is great for expats wanting to buy standalone houses in Koh Samui while adhering to the law.
Step 2: Execute a due diligence before buying a house in Koh Samui
A legal due diligence is a must before buying a house in Koh Samui. Through the assistance of a law firm, this process involves verifying the title deed, any encumbrances, as well as compliance about zoning and building restrictions on the property.
The most secure land title in Thailand is the Chanote (Nor Sor 4 Jor), which confirms precise land boundaries and full ownership rights. Less secure titles like Nor Sor 3 or Nor Sor 3 Gor may involve disputes or limitations. A lawyer should verify that the seller has lawful ownership or leasing rights.
If the property is held under a Thai company, the buyer must review corporate documents such as the Company Affidavit, shareholders list, and resolutions approving the transaction.
It’s also necessary to check for existing mortgages, servitudes, or litigation. If building is involved, the buyer should verify permits and land-use regulations. If purchasing under lease, the lease should be registered and include construction and transfer clauses.
Step 3: Sign the reservation agreement to reserve the house you want to buy in Koh Samui
Once the due diligence is complete, the next step to buy a house in Koh Samui is to sign a Reservation Agreement. This document reserves the property and records the buyer’s intention to proceed with the purchase. It generally includes a deposit and outlines the agreed purchase price, deadlines for contract signing, and terms in case of withdrawal or non-performance.
This agreement does not transfer ownership but serves as a preliminary commitment, protecting the buyer while finalizing the Sale and Purchase Agreement (SPA).
Step 4: Executing the Sale and Purchase Agreement to formalize buying a house in Koh Samui (SPA)
The SPA formalizes the sale and the process of buying a house in Koh Samui. This document must be drafted in Thai and is often translated into English for foreign buyers. It includes details such as party identities, property description, payment terms, timelines, and tax allocation.
For leasehold or house-construction contracts, the SPA must also identify the lessee’s construction rights and any related responsibilities of both parties. Once signed, the SPA becomes a legally binding contract detailing the agreement between the buyer and seller for the purchase of a specific property.
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Step 5: Transferring funds from abroad to pay for the house you want to buy in Koh Samui
When buying a house in Koh Samui, the funds must be transferred from abroad in compliance with Thai financial regulations. These funds must be remitted through a local bank and must be supported by a FET Form if the amount exceeds USD 50,000.
The name on the transfer of land must correspond to the buyer’s name in the SPA and land documents. The FET Form is also needed in case of repatriation of the funds in for the process of registration of the ownership with the Land Department.
Step 6: Transfer of ownership to register the house you want to buy in Koh Samui
The final step to buy a house in Koh Samui involves the official registration of ownership or lease at the Land Department. Both buyer and seller (or their legal representatives) must be present on the scheduled date to finalize the transaction.
The Land Officer will review the documents, register the transaction, and record the transfer in the registry. Government fees, including transfer tax, stamp duty, Specific Business Tax, or Withholding Tax, must be paid. The SPA should allocate these costs in advance. Once registration and payments are completed, the transaction is legally concluded.
Yellow Book and Pink Card as additional steps : obtain proof of residence
After purchasing a property in Koh Samui (or elsewhere in Thailand), there are extra steps that foreign investors may find beneficial to secure proof of residence.
Foreigners can apply for a Yellow Book (Tabien Baan), which is a document that establishes residency and simplifies dealings with Thai authorities.
Additionally, the Pink Card, a Thai ID card for foreigners (attached to a Yellow Book), is an important document to have for general administrative purposes like bank account opening, medical services and governmental procedures.
Conclusion
Although foreign nationals cannot directly own land in Thailand, there are several safe and legal alternatives to buy a house in Koh Samui. Options such as long-term leases, condominium purchases, or building a home on leased land provide real estate access while respecting Thai law.
Successfully navigating the process to buy a house in Koh Samui requires meticulous legal planning, contractual clarity, and strict compliance with property regulations. Every stage—from identifying the property to registering the transaction—must be handled with care to avoid legal exposure.
Getting the assistance of professional property lawyers is also a must if you want to protect your investment and ensure that you are compliing entirely with local law. This way, foreigners can safely buy a house in Koh Samui with the right legal structuring. If you are interested in buying a house in Koh Samui, our law firm can assist you to secure your investment under Thai law
FAQ
No, foreigners cannot directly own land in Koh Samui due to the restrictions imposed by the Land Code Act B.E. 2497. However, they can invest in residential properties through alternatives.
Foreign buyers can legally purchase property in Koh Samui through:
- 30-year leasehold agreements: This allows foreigners to lease land for up to 30 years, with the right to occupy and use it as a residence.
- Condominium purchase: Foreigners can buy a condominium unit under the Condominium Act B.E. 2522, as long as the foreign ownership does not exceed 49% of the building’s total floor area.
- Building a house on leased land: Foreigners can construct a house on leased land, with proper documentation granting them ownership of the building.
Due diligence involves verifying the title deed, checking for encumbrances or disputes, and ensuring compliance with zoning and building regulations. A Chanote (Nor Sor 4 Jor) title is the most secure, confirming precise land boundaries. If the property is owned by a Thai company, reviewing corporate documents is essential. Always work with a legal professional to ensure the property’s legal status is clear.
Once the due diligence is completed, a Reservation Agreement should be signed. This document reserves the property, sets the deposit amount, and outlines the agreed purchase price and terms. It serves as a commitment to proceed with the purchase and protects the buyer while preparing the Sale and Purchase Agreement (SPA).
The SPA formalizes the sale of the property and includes details such as the property description, parties involved, payment terms, and tax responsibilities. For leasehold or building agreements, it also specifies the lessee’s rights. Signing the SPA makes the agreement legally binding.
Funds for purchasing property in Koh Samui must be transferred from abroad through a local bank. If the amount exceeds USD 50,000, an FET Form is required to comply with Thai financial regulations. The buyer’s name on the transfer must match the name in the SPA and property documents.