Types of Property Title Transfer in Thailand

Property ownership is a significant investment, whether for residential, commercial, or business purposes. In Thailand, the process of transferring property ownership—commonly referred to as title transfer—is governed by the Land Code, the Civil and Commercial Code (CCC), and related regulations enforced by the Land Department. For both Thais and foreigners, understanding the types of title transfer, the legal procedures, and the implications of each is essential to ensure that property rights are properly secured.

This article explores the different types of property title transfers in Thailand, the legal framework surrounding them, and the practical considerations for buyers, sellers, and investors.

Legal Framework of Property Title Transfer in Thailand

Property transactions in Thailand must be registered at the Land Department Office to be legally effective. While sales agreements may be signed privately, ownership does not legally pass until the transfer is formally registered.

The Land Department issues different types of title deeds (Chanote, Nor Sor 3 Gor, Nor Sor 3, etc.), and the type of title deed determines the rights and processes for transfer. Transfers can occur for various reasons—such as sale, gift, inheritance, or leasehold assignment—and each type has its own procedures, tax implications, and restrictions.

Main Types of Property Title Transfers

1. Transfer by Sale and Purchase

The most common form of property transfer in Thailand is through a sale and purchase transaction. This involves:

• Contract of Sale: A written contract signed by both parties detailing price, terms, and obligations.

• Registration: The buyer and seller must appear at the Land Office to formally register the transfer.

• Payment of Taxes and Fees: These typically include:

  • Transfer fee: 2% of the government-assessed value of the property.

  • Withholding tax: Based on either the appraised value or the actual selling price.

  • Stamp duty or Specific Business Tax: Depending on the holding period and transaction type.

For foreigners, freehold land ownership is generally prohibited, but foreigners may own condominium units (up to 49% of the total area of a condominium project) under the Condominium Act. In such cases, transfer of the unit title must also be registered with the Land Department.

2. Transfer by Gift (Donation)

A property owner may transfer ownership without monetary compensation by way of gift. This is often used between family members.

• Requirements: Both parties must appear at the Land Office and agree to the transfer.

• Taxes and Fees:

  • Gift tax applies in some cases, especially if the property is transferred between non-family members.

  • Transfer fee is still payable (2% of the appraised value).

  • Stamp duty may apply instead of Specific Business Tax.

Foreigners are subject to the same limitations: while they cannot own land, they may receive ownership of condominiums through donation if legal conditions are satisfied (e.g., compliance with foreign ownership quotas).

3. Transfer by Inheritance

When a property owner passes away, ownership is transferred to heirs under either:

• A valid will (testamentary succession), or

• The statutory inheritance rules (intestate succession) under the CCC.

The heir must register the inheritance transfer at the Land Department. Key points:

• Inheritance of land is limited to Thai nationals. Foreigners cannot inherit land in freehold but may inherit a leasehold right or may need to dispose of inherited land within a specific timeframe.

• Inheritance of condominium units is possible for foreigners, provided the foreign quota of the condominium project has not been exceeded. If it has, the heir must transfer ownership to a Thai national within a year.

Taxes are generally less burdensome for inheritance transfers, but in some cases, inheritance tax may apply depending on the estate value.

4. Transfer by Leasehold Assignment

Since foreigners cannot directly own land, many acquire long-term rights through a registered leasehold agreement (up to 30 years, renewable). If the leaseholder wishes to transfer their rights to another person:

• The leasehold interest can be assigned at the Land Department.

• The new lessee must register the assignment.

• Fees: 1% of the total lease value plus stamp duty.

This type of transfer is common in resort areas, where foreign buyers secure long-term land rights through lease arrangements.

5. Transfer by Mortgage Enforcement or Auction

When property is used as collateral for a mortgage and the borrower defaults, the lender may enforce its rights through a public auction.

• The transfer occurs when the winning bidder purchases the property at auction.

• The Land Department registers the transfer to the new owner.

• Taxes and fees are calculated based on the auction value.

This type of transfer is relevant in foreclosure cases or when financial institutions liquidate secured assets.

6. Transfer of Property Between Companies or Business Entities

Property can also be transferred between companies, partnerships, or business entities, either through:

• Asset sale: Direct transfer of land or buildings.

• Share transfer: Indirect transfer of ownership by selling company shares instead of the property itself.

In an asset transfer, the property must be registered at the Land Department with applicable fees and taxes. In a share transfer, the property remains under the company’s ownership, but effective control shifts through ownership of shares.

This is often used for investment structuring or tax planning, though such arrangements must comply with the Foreign Business Act and anti-nominee rules.

7. Transfer by Exchange (Barter Agreement)

Thai law allows for the transfer of property through exchange agreements, where two parties swap properties or assets of equivalent value.

• Both transfers must be registered at the Land Department.

• Each party pays transfer fees and taxes based on the appraised value of their property.

• Exchanges are more common among family members or developers consolidating land plots.

Key Considerations in Property Title Transfers

Regardless of the transfer type, several factors must be carefully considered:

1. Type of Title Deed

   • Only Chanote (Nor Sor 4 Jor) grants full ownership rights with surveyed boundaries.

   • Lower-grade deeds (Nor Sor 3 Gor, Nor Sor 3) may be upgraded but carry more uncertainty in boundaries and rights.

2. Foreign Ownership Restrictions

   • Foreigners cannot own freehold land except in rare BOI or government-approved cases.

   • Condominium ownership is possible, subject to the 49% quota rule.

   • Leasehold and usufruct agreements provide alternatives for long-term rights.

3. Tax Liabilities

   • Transfer fee (2% of appraised value).

   • Withholding tax (progressive for individuals, 1% corporate).

   • Specific Business Tax (3.3%) or Stamp Duty (0.5%), depending on the circumstances.

4. Due Diligence

   • Verifying seller’s ownership rights.

   • Checking encumbrances, mortgages, or liens.

   • Reviewing zoning and land use restrictions.

5. Registration

   • All property transfers must be registered at the local Land Office to be legally binding.

   • Both parties must attend, or one may grant Power of Attorney.

Conclusion

Property title transfer in Thailand is not a simple formality—it is a legal process that determines the validity of ownership rights. From straightforward sales to inheritance, gifts, leasehold assignments, or corporate transfers, each type carries unique requirements, restrictions, and tax implications.

For Thai nationals, transfers are relatively straightforward, but for foreigners, strict restrictions on land ownership mean that options are limited to condominium ownership, leasehold rights, or indirect investment structures. In all cases, professional legal assistance and due diligence are strongly recommended to avoid costly mistakes and ensure compliance with Thai law.