Buying or Leasing Land on Koh Phangan

6 Oct 2021

There is a slew of great reasons to invest in Thailand real estate and land. In recent years, the nation has seen significant and consistent growth, and it seems that this trend will continue. House and land prices, also rentals, are usually rising, which offers some intriguing property investment possibilities in the market.
Plus, Thailand and Koh Phangan is a fantastic location to live, and many individuals will be able to locate their ideal spot for a reasonable price.

Finding Land

Before buying land it is important to know what you want. Which area do you want to live in or have the land, what will the land be used for? In most cases on Koh Phangan, a good way to start is to jump on your bike and drive around. See what you can find from signs on the road with ‘land for sale/rent’ and check these out, see what they all offer in their unique ways.
Ask your Thai friends or foreign friends if they know of land for sale, check the online groups and real estate agents on the island. Agents will be able to help you with the legal side of things to so it can be a good option to have a stress-free purchase.
There is no need to hurry if you already reside on the island. Slow it slowly a little. Chill.

Take your time

If you are on vacation, have limited time, and feel unable to make a choice during this trip then you should schedule it for a future visit when you can be more focused. You'll discover that in virtually every aspect of life, a relaxed choice is more likely to be right. By giving yourself time to think about it (sometimes literally), you'll be able to dwell on and analyze elements of the purchase that you may have overlooked if you had hurried into it.
This is particularly true when it comes to real estate choices like buying land. If you're looking to purchase land on Koh Phangan, you should never be in a hurry. So don't force yourself to make a quick decision, and don't give in to pressure from a salesperson or anybody else who is just interested in getting your business.
You certainly don't want to miss out on a fantastic bargain, so if you're certain it's the right property for you, go for it! But only if you're certain it's the correct choice.
Purchasing real estate is a major life choice. It is definitely not a choice that should be made hastily.

 

Surrounding area

If you buy in a popular development area, the developer will almost certainly want to replicate their success just next door. You should account for this while choosing your plot. It would be very terrible to move into your new house on the land after waiting a year for it to be completed, only to have to suffer another year or two of building noise next door. If you want to buy on a high level, you should be aware of the surrounding regions, in general, to prevent being obstructed by other buildings.

How can I buy land on Koh Phangan as a foreigner?

There are two options for buying land as a foreigner in Thailand:

Option 1: Setting up a Thai Company
Always contact a Thai lawyer before signing any papers after you've chosen which land you want to buy.
Land may not be owned in the name of a foreigner, although it may be owned by a Thai-registered business. In Thailand, there are a variety of company entities to choose from.

A Thai Limited Company is usually the most popular type. When forming a limited company, there are specific business registration requirements that must be fulfilled.
The Thailand Amity Treaty allows Americans to conduct business in Thailand, but they are not allowed to buy property.
If you plan on doing more through the company than owning a house or require a Thai Work Permit, you should look at the Corporate Tax in Thailand.

Option 2: Leasehold Agreement
Purchasing Thai real estate with a leasehold interest is a common and favoured method for foreigners looking to purchase property in Thailand.

Why is it the preferred option?
It's clear and easy to understand.
In Thailand, foreigners may receive full interest on a lease for the duration of the lease period.
This is preferable to buying via a limited business with many shareholders who may have different interests than yours.
The leasehold interest may be transferred or even sold in Thailand, just like any other freehold title conveyance.

The lease period is limited to 30 years.
Renewal will not be automatic, and an extra 30-year term will be contingent on careful writing and the judgment of the Land Office's Registrar.

Marriage to a Thai

If a foreigner marries a Thai, they may purchase land in Thailand, although there are certain restrictions:

You must declare that you have no rights to the land as the non-Thai spouse, essentially surrendering your right to claim the property.

Despite the fact that you bought the property, it must be registered in the Thai spouse's name.
The married pair may be required to sign Land Department statements indicating that the money spent is the Thai spouse's separate property.

Even in the midst of a divorce lawsuit, issues may emerge. It will be difficult to prove that the land is marital property.

The law establishes fundamental rules for the administration of marital assets, and in this instance, a well-drafted prenuptial agreement may assist to reduce your risks as a non-Thai spouse.

Land Title

Check which Land Title Deed - Chanote Land Title you will have:

Chanote or Nor Sor 4 * Freehold Land Title Deed 
This kind of title gives you complete ownership of the property, allowing you to deal with or utilize it as the zoning permits.

* This kind of title deed grants you complete ownership of the property.

* You may sell, lease, transfer, or mortgage this kind of land.

Nor Sor 3 Gor * Freehold Land Title Deed 
This kind of title deed is currently being elevated to full Chanote status.

* Comparable to Chanote This kind of property may be purchased, leased, transferred, or mortgaged.

* The landowner may petition the Land Office to upgrade this title deed to Chanote by filing a petition.

* Because the area has previously been GPS surveyed by the Land Department, it has precise boundaries.

Nor Sor 3 * Freehold Land Title Deed 
The difference between this kind of land title document and the Nor Sor 3 Gor is that the Nor Sor 3 Gor has not yet been measured by the Land Department and does not have precise borders.

* This kind of Nor Sor 3 land title document may be upgraded to Nor Sor 3 Gor and subsequently to a Chanote in the future.

Checklist

Land Zoning

Check with local municipal city hall for zoning laws to determine whether you may construct a house on the property you're considering. Examine any future government plans that may have an effect on land value, such as new motorways, roads, or powerlines. It's very uncommon for issues like these to arise, so keep an eye out for warning signs.

 

Flood Area

Floods can occur nearly everywhere in Thailand, this includes Koh Phangan. It is also an essential aspect to consider! The difference in elevation between the home and the road. Main water drains, water pumps, and the quantity of soil you may need to add are all things to consider. All of these factors will influence where you can construct a house and how much it will cost. It may wind up being very costly.

 

Road Access

You need to be able to get onto your property quickly when you purchase it, right? That implies you'll need to figure out whether the roads leading to your property belong to someone else. If that's the case, you'll need to get permission from the appropriate authorities to utilize them.
The legal authorization to use the road must be recorded in the title document, and it may be accompanied by a charge and an agreement to split the expense of road upkeep. It's true that it's inconvenient. However, it's important to consider before making a decision. You cannot go to your property if you do not have a registered road or access. As a result, you're better off not purchasing it at all.

 

Electric and Water Access

Water, power, cable connections, and district sewage systems may not yet be linked to the property you want to purchase. Check the district boundaries to discover whether you'll have to spend time and money installing your own septic system, well, or electricity. When you visit your prospective Land, you should also verify your mobile connection service.

Closing Day

You must be prepared with all money and papers on closing day; various documentation will be required based on the kind of transaction; there are also distinct requirements for foreigners. Your lawyer will assist you in preparing these documents.

 

Form FET (Foreign Exchange Transaction)
Passport Bank/House Registration ID a cashier's check
Certificate of marriage or divorce
Names of the mother and father

This is a difficult day, and everyone involved must work together to accomplish the deal. Attend the closing ceremony and pick up your land title! It's a wonderful moment to rejoice since you've accomplished your goal.