Can Foreigners Purchase or Own Phuket Property?

Phuket, Thailand's largest island, continues to captivate the hearts of international investors and holidaymakers alike. Its stunning beaches, vibrant culture, and growing infrastructure make it a premier destination for those looking to acquire a piece of paradise. The demand for exquisite villas and luxurious condominiums in Phuket is consistently high, attracting people from all over the world seeking both a dream lifestyle and a good investment.

However, a common question arises for many interested buyers: can foreigners truly purchase or own Phuket property? The answer, while not a simple yes or no, is certainly encouraging. Foreign nationals can secure their own slice of this tropical paradise with the proper understanding of Thai property laws and guidance.

Understanding Legal Restrictions for Foreign Buyers

Thailand's property laws include specific restrictions that foreign buyers must understand before making any investment decisions. The most important rule is that foreigners cannot own land directly under Thai law. This fundamental restriction shapes all property investment strategies for international buyers.
However, foreigners can own up to 49% of the total unit area in any condominium building. This quota system ensures that Thai nationals maintain majority ownership of each development while still allowing significant foreign participation. Buildings must maintain this ratio, which means popular developments may have waiting lists when the foreign quota fills up.
For those interested in villas or landed properties, leasehold arrangements represent the most common ownership structure. These typically involve 30-year lease terms with options for renewal, providing long-term security for foreign investors. Many developments now offer leasehold villas specifically designed to meet international buyers' needs while complying with Thai property laws.

Diverse Ownership Options for International Buyers

Navigating the complexities of Thai property law reveals several viable options for foreigners seeking to purchase real estate in Phuket. Each option provides distinct benefits and considerations

1. Freehold Condominiums

This is the most direct form of ownership for foreign individuals. As previously stated, a foreigner can own a condominium unit outright provided the building's foreign ownership quota of 49% is not exceeded. This title is registered at the Land Department and provides full legal rights to the unit, including the ability to sell, inherit, or lease it out. Many high-end developments in Phuket offer condominium units specifically catering to the international market, making them highly desirable homes for sale in Phuket, Thailand.

2. Leasehold Villas and Houses

For those aspiring to own a villa, a common and secure method is through a registered long-term lease agreement. This typically involves a 30-year lease, which can be extended for two subsequent 30-year periods, effectively providing 90 years of secure tenure. The lease agreement is registered at the Land Department, giving the foreign lessee significant rights over the property. This structure is widely used for villas and houses within gated communities and luxury resorts, offering foreigners practical control over their dream Phuket property.

3. Thai Company Ownership

A more complex, yet viable, option for foreign investors, particularly for larger properties or those seeking land ownership, is to establish a Thai company. The company, which must be majority-owned by Thai nationals (at least 51% of shares), can then legally own the land. The foreign investor typically holds the remaining 49% of the shares and often controls the company through preferential shares, loan agreements, or director appointments. While this method offers direct land ownership, it requires careful legal structuring and ongoing compliance with Thai corporate laws. It's crucial to work with a reputable legal advisor to ensure the company structure is legitimate and robust.

The Process of Buying Property in Phuket

Once you've identified your preferred ownership option and found your ideal Phuket property, the buying process generally follows a structured path. Understanding these steps is crucial for a smooth and secure transaction

Due Diligence and Legal Checks

This is perhaps the most critical step. A qualified independent lawyer will conduct thorough due diligence, verifying the property's title deed, ensuring there are no encumbrances or outstanding debts, and confirming that the seller has the legal right to sell. For condominiums, they will verify the foreign ownership quota. For leaseholds, they will review the terms of the lease agreement.
Reservation Agreement and Deposit
Once due diligence is satisfactory, a reservation agreement is signed, and an initial deposit (typically 1-5% of the purchase price) is paid to secure the property.

Sales and Purchase Agreement (SPA)

A comprehensive Sales and Purchase Agreement is then drafted. This legally binding document outlines all terms and conditions of the sale, including payment schedules, transfer dates, and responsibilities of both buyer and seller. Your lawyer will meticulously review this agreement to protect your interests.
Payment Schedules: Payments are typically made in installments, especially for off-plan or under-construction properties. For completed properties, the balance is often paid upon transfer of ownership.
 

Payment Schedules

Payments are typically made in installments, especially for off-plan or under-construction properties. For completed properties, the balance is often paid upon transfer of ownership.

Foreign Currency Transfer

Foreign currency transfer requirements add another layer to the purchase process. Thai law requires that funds for property purchases come from overseas sources, and buyers must provide documentation proving the foreign origin of their investment funds. Banks issue Foreign Exchange Transaction Forms (FET Forms) that serve as proof of legitimate foreign currency transfers.
 

Transfer of Ownership/Lease Registration

On the agreed-upon transfer date, the final payment is made, and the ownership title (for freehold condos) or the lease agreement (for leasehold properties) is officially registered in your name at the local Land Department.

Essential Tips for International Buyers

Investing in Phuket property can be highly rewarding, but approaching the process strategically is key to success. Here are some invaluable tips for international buyers

Engage Reputable Professionals

Always work with an independent and qualified Thai lawyer specializing in real estate. Avoid relying solely on developers' or agents' in-house legal teams. Additionally, partner with a trusted real estate company in Phuket that has a proven track record of working with international clients.

Understand All Costs and Taxes

Beyond the purchase price, be aware of transfer fees, stamp duty, specific business tax, and property taxes. Your legal advisor can provide a clear breakdown of all associated costs.
 

Clarify Ownership Terms

Ensure you fully understand the specifics of your chosen ownership structure, whether it's the 49% quota for condominiums, the lease renewal terms for villas, or the intricacies of a Thai company structure.
 

Visit the Property and Location

If possible, visit the property in person and explore the surrounding area to ensure it meets your expectations and lifestyle needs.

A Secure and Rewarding Investment Opportunity

While foreigners face certain legal limits when it comes to owning land in Thailand, the country offers flexible and well-structured alternatives that allow international investors to confidently buy real estate in Phuket. Whether you're looking at freehold condos or leasehold villas, the opportunities are diverse and rewarding.
Banyan Group Residences makes property ownership in Phuket accessible and seamless for foreign buyers. Offering both freehold condominiums and leasehold villas, Banyan Group delivers premium developments that combine luxury, legality, and lifestyle. With personalized support and decades of experience in the region, Banyan Group is the ideal partner for securing your dream Phuket property. Explore your options and start your journey today.