Leasing arrangements are often structured by the preparation of several documents, rather than a single document. Since landlords are liable to pay Land and House tax of 12.5% of the gross rental derived from renting out land and buildings but only 7% VAT is charged on services provided, landlords may prepare two or three separate agreements, for example, providing for the use of furniture by a separate agreement, in order to minimize their taxes.

Condominiums

Condominiums are a relatively recent development in Thailand. As in other countries, a “condominium” denotes private ownerhip of a single unit in a multi-unit residential building. Ownership rights extend to a shared use of areas common to all owners.

Condominiums are governed by the Condominium Act of 1979, as later amended, which is administered by the Ministry of the Interior. The Land Department of the Ministry is responsible for registration of condominiums, issuance of certificates of ownership or unit title deeds and registration of transactions involving the unit such as transfer or mortgage. The rules concerning ownership of condominiums are similar to those concerning land. Condominium units have a form of title deed and ownership is transferred at the Land Department. The certificate of ownership includes the name of the owner, the position and area of the unit and a diagram of its dimensions.

Foreign ownership of condominiums is strictly controlled. Foreigners, meaning foreign natural persons, foreign companies or foreign-majority-owned Thai companies, may currently own up to 49% of the space in a condominium project. The person seeking to own a condo unit must furthermore fall under one of the categories of persons “qualified” for ownership. Those categories are (1) individuals having permanent residence status; (2) a foreigner permitted residence under the Thai investment promotion law; (3) an entity which has been granted an investment promotion certificate under the business promotion law and (4) individuals who do not have residence permits but who can establish proof that they have brought into the country the entire purchase amount of the unit from a bank account abroad. This was formerly established by a Tor Thor 3 form issued by the receiving bank. Under the current framework, the bank issues a certification letter of the amount and the origin of the funds. Evidence of qualification under one of these categories must be submitted before a certificate of ownership is issued.

 

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