The law of Thailand provides for mortgage contracts under Book 3, Title 12 of the Civil and Commercial Code. The nature of the mortgage contract is that it is one in which a debtor assigns property to a creditor in order to secure repayment of a debt.
Below are the following points you might need to know about property mortgages in Thailand:
- Foreigners must consult with a lawyer before taking out a mortgage in order to purchase any type of real estate in Thailand. This is particularly true in the case of both condominium units or houses.
- In regards to condominium units, the Condominium Act of 1979 and a Land Department regulation issued in 2004 require that non-resident foreigners (i.e. any foreigners without permanent resident status) must transfer foreign currency into Thailand and convert it into Thai baht in an amount no less than the purchase price of the condominium unit.
- The preceding rule (Condominium Act of 1979 and a Land Department regulation) presents difficulties for foreigners who wish to apply for a mortgage in order to finance their purchase of a condominium. Any foreign nationals interested in obtaining financing may have to contact a local Thai bank who is able to assist in providing a loan issued in foreign currency which is transferred from overseas.
- As for financing such properties as houses or villas, an important legal issue is presented due to the fact that the foreigner may not actually own the land underneath the structure and therefore cannot offer such land as collateral for the mortgage.
Furthermore, foreigners may face difficulty in obtaining approval for a mortgage from a Thai bank since they are not resident in Thailand and do not have a permanent domicile here.
Those who are interested in obtaining a mortgage in order to finance the construction of a house or villa on leased property should seek proper legal consultation before proceeding.