Owning a House in Thailand – A Caveat

January 20, 2011

For some reason many western Expats (mostly men) want to own property in Thailand. This usually means a house with land. The Japanese Expats I run into don’t have these same desires. They seem to be content with renting or buying condos. A friend I know who spent some years in Japan tells me that the condos available here in Thailand are quite a bit larger than most homes in Japan. So our Japanese Expats are usually content with living in what most westerners would consider closet-sized accommodations.

Those content with living in condos have a much easier time though than the land requiring westerners when it comes to purchasing their homes. You see, it is completely legal for a foreigner to own a condominium in Thailand while it is completely illegal for one to own land here.

Of course there are lots of loopholes but I won’t get into that here. (Do a Google search on “Buying land in Thailand” or get the book  How to Buy Land and Build a House in Thailand, paiboonpublishing.com, for more info.)

If you decide to use one of the many loopholes and buy a house in Thailand I have one small piece of advice for you.  Unless you are going to become a farmer here (Don’t laugh, there are lots of Expat farmers in Thailand, mostly in the northeast.) or you are going to live with your wife’s family in her home village (lots of pros and cons with this one) then I am going to suggest you find a nice gated community to settle down in. Buying land on its own, outside of these protected and isolated housing compounds, can be rather eventful, and usually not the fun kind of event.

Here are a few examples of people I actually know who now wish that their house had a nice wall around it with a uniformed guard saluting them as they come through the gates.

Dogs next door

Two friends of ours got married and built their dream house, had two children, a boy and a girl, and settled down to live a perfect life, just like 60s TV’s Leave It to Beaver. NOT!

A few years later the vacant lot next to theirs was purchased by a rich woman. Her sister has quite a kind heart and decided to take in stray street dogs. She began building a kennel on the land next to the Beaver’s family. They had a very efficient design. Lots of individual cages for the dogs, all connected to a drainage ditch so that the kennel can be sprayed down daily and the doggy waste will just wash away.  Unfortunately the waste washes away into a trench in front of the Beaver’s house.

The kind lady is smart enough to live a couple of towns away, away from the noise and the smell or her nineteen stray dogs which have been left to a caretaker to deal with. Now our perfect family in their dream house are all taking anti anxiety medication and using ear plugs at night, especially during the mating season or any time someone walks past the kennel’s front gate. The whole village has protested to the local government, but so far to no effect.

Pigs next door

A man quite active in the local Expat community bought a nice large parcel of land, over 2 rai, and built a house for him, his Thai wife, and son. The wife’s brother wanted a house too and convinced her to sell him half of their 2 rai so that they could also build a family home. The brother convinced her that she didn’t need so much land and that it is good to have family nearby. It is safe and solves the problem of loneliness. But in this case it didn’t work out exactly as planned.

The brother decided that since he now had a nice size plot of land maybe he could turn it into a profit making business and continue living in his old house. This is exactly what he did. His business: Pig farming and processing (the last is a euphemism for slaughterhouse).

Now I like pork as much as the next fellow but living next to pigs, or hogs as my American farmer buddies would say, has a pretty big downside. Have you ever smelled a hog farm? No words can express the experience.

But, if it can be imagined, there is something worse than the smell. Pigs are highly intelligent animals. When they are being made ready for slaughter they seem to know what’s going on. The squeals of the death row porcine inmates are not forgotten easily. There, it is a daily occurrence. And it is definitely not something I would want to live next to.

Welders and recyclers next door

Then there is the story of the man who built his dream house just before his next door neighbor decided to open up a metal fabricating business and welding shop. I wonder how his resale value has been affected. Probably about the same as the above two unfortunates. But maybe a little better than the person unlucky enough to have recyclers open up business right next to him. It is nice to have a mountain view, but maybe not a mountain of waste paper, plastic and metal.

Next door can be lots closer than you think

Although most Expats think that Thailand has no zoning laws, that is not the case. Well, they might as well not have any since they are so rarely enforced. So your next door neighbor, who is supposed to build at least 2 meters from the land boundary might build so close to your house that you will be the beneficiary of all the rain coming off the his roof.

This happened to a western couple I know. They bought their land in the name of a lawyer and had settled down for what was to be a pleasant retirement. That is until someone bought the plot next to their 15 million baht home which contains a swimming pool and a lovely garden. The new neighbors built a large two story house looking right down on our retired couple, and looking down on their swimming pool and lovely garden too. The new owners then promptly put the new never-lived-in house up for sale. Our retired couple has also put their house on the market but no luck selling as yet. I would chose the new house that looks down on theirs first, wouldn’t you?

Owning any house anywhere has its problems. Choosing a house in a compound in Thailand doesn’t eliminate all of them but does make life a lot more predictable. What is even better is if you buy a parcel in a compound and then buy the parcels to the left and to the right to act as a nice buffer. They will be the best land purchases you will ever make.  Good luck.

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11 Responses to “Owning a House in Thailand – A Caveat”

  1. mirthseeker said

    The wife owns a house in outer Bangkok. The owner of the house next door allowed a tenant to use it for his business of distributing nitric acid, in 20 lt plastic containers. Every day a 5 ton truck would arrive, the containers unloaded (slid down a plank!), to be then loaded on pick-up trucks. Late afternoon the pick-ups would return, loaded with “empties”, which were washed out straight down the open drains!

    The empties, hundreds of them, and any full containers not distributed, were piled up in front of the house. Oh, the smell, on occasions! The wife would complain, and the smell would be reduced.

    But then,while we were away at Cha Am, the family cat got acid on it’s feet, and promptly disappeared, presumed deceased. On our return, the family became somewhat upset, and made a phone call or two to an environment protection part of the government.

    Next morning, the 5 ton truck arrived early, the pick-ups departed quickly. We could hear conversations about an “inspection”. Which duly happened – and next day, things returned to “normal”.

    Except that our extended family also had contacts with the police, who were the next to be informed. And came twice – the first time didn’t find much wrong (I wonder why?), the second time without notice cos an anonymous phone call was made, as containers were being washed out at midnight, and the police caught them “in the act”.

    The perpetrators were heard muttering about “who had shopped them?”, and about the farang (me), who was staying next door! Luckily I left soon after wards!

    Anyway, to cut a long story short, they moved to another rented house, and shortly after wards we bought the neighboring house, so as to ensure that the problem couldn’t recur. So now, the wife rents out rooms, and manages the property from overseas, which is another story in itself!

    And a month later, the family cat, whose disappearance triggered all the emotions and the fuss, returned, unscarred!

  2. mirthseeker said

    Oh, and the in-laws up country have a cousin who farms pigs right next door! The noise is bearable, but the flies!!!!!!!!!!!!!

  3. Naksuthin said

    We would never consider building a house on a Thai street. Living in a compound with association laws and rules is the only way to go…and even that isn’t perfect.
    My relatives moved into a nice moo baan development near bangkok ten years ago. They had rules that said you couldn’t make additions to your house without approval.
    Then a few years ago one of the neighbors added a room. They didn’t ask. They just did it. And you know how the Thais hate making a scene. Then someone else added a room…and no one could say anything because they let the first guy go. Later someone started a music school out of their house with a big sign on their gate. So then last year someone added a third story on to their house…without asking. And no one made a stink.
    That’s just the way Thais are. They reason that someday they might want to add a room or a third story themselves.

    I imagine that if you go back there in 10 years there will be a bunch of three story houses there.

    One thing they’ve been able to do is keep the streets nice and clean and the guards do a good job policing the place.

    But definitely never move in to a Thai soi unless you love surprises!!

  4. Snap said

    Hugh, sorry, but my comment has nothing to do with buying a house in Thailand…although your artical was very informative. I’ve had my, how should I say, ‘issues’ with neighbours already, and I’m in a hotel!

    I arrived early for school today and picked up a copy of City Life – Chiang Mai off the coffee table. Then I saw your LAST goodbye column…that is you, isn’t it? It looked like an intersting magazine, so I’ve taken it home for a good read :)

  5. Snap,

    Yes that’s me in City Life. I wrote the column for 5 years so thought it was time to “retire”. I see you live in Chiang Mai. What school are you teaching at? Let me know and if I am ever around there maybe we could have noodles or something. Hope you get out of that hotel soon (unless you like it there, of course).

    • Snap said

      Hi Hugh…I’m learning Thai, not teaching. Sure, I like to get out of the apartment sometimes…although lately I’ve been staying in more while Stray’s collar bone heals. I like noodles too!

  6. jenniferp1234 said

    Thanks for this post, Hugh. It’s both insightful and humorous. You are correct in mentioning that buying a condo in Thailand is usually easier than buying a house with land. Western expats who are seriously interested in owning property in Thailand might want to get a referral for Thailand lawyers to find lawyers than can help them understand how property laws apply to foreigners in Thailand. Buying property is more complicated and riskier than buying a condo, so expats would probably welcome legal advice. If you look around Thailand today, then you can see that many expats are buying property successfully. However, I think it is a good idea to get as much help and guidance as you can when undertaking such a venture.

  7. I agree with Jennifer that getting a lawyer for any real estate transaction is a good idea. Make sure the lawyer speaks a language you can understand and also that he/she is on your side and not that of the seller. But, we need to qualify that “many expats are buying property successfully” is only true if we not are talking about land – condos are a different story. No Expat can buy land here in Thailand. A company that he is part owner of can as can a spouse. So if you have questions, a lawyer should be able to help you answer them.

  8. Luke said

    i agree with the article. I bought a house in a villa in Chiang Mai, with my wife and now having a lawyer draw-up the paperwork. Thought of buying a plot of land some where..but it is too unpredictable and theft/break-ins would be a constant worry…

  9. Su Yang said

    Hi Hugh,

    I read your blog with great interest. A little background. I was born in Laos but emigrated to US after the Vietnam war. I recently married a non-ethnic Thai woman. We are planning to return to Thailand after her studies, and hopefully, my retirement.
    I read most of your blog about cost of living – mainly property ownership. I either missed or did not see you mention anything about real estate and other taxes. Could you provide some information.

    Su

    • Su,

      Good luck with your retirement plans.

      As to real estate taxes, land that is not occupied is taxed, but at a very low rate. I believe that a piece of land we owned, about 1/4 or an acre, was taxed at about $5 a year. If you have a house on that land then, I believe, that there are no taxes on it. As to income taxes, if you work here and earn money, or you get bank interest from a local bank, then it is taxed. I am not sure but it seems like about 10%. The money you earn overseas, as in pensions and investments, is not taxed. All in all, taxes are not something I worry about here.

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