If you are a non-Thai who has purchased a condominium unit on a freehold ownership basis in Thailand, you may be under the impression that part of the value you purchased was the peace of mind of knowing you could easily leave the unit to your heir. For some time, the inheritance of a condominium unit by a non-Thai person or entity was the subject of legal debate in Thailand. Until recently — as we explained in our previous article on this subject — the prevailing opinion was not a favorable one for non-Thai persons or entities.
By way of background, Thailand’s legislation on condominium ownership is laid out in the Condominium Act (1979), as amended (the “Condominium Act”). The Act allows non-Thais to own a freehold condominium unit only under certain conditions. Perhaps the best-known current restriction is the “49% foreign freehold quota” — with very limited exceptions, foreign freehold ownership cannot exceed 49% of the total floor space of a condominium project in Thailand. Furthermore, under Section 19 of the Condominium Act, even where foreign freehold space is available, only non-Thais meeting one or more of the following conditions are entitled to receive freehold title to a condominium unit, regardless of how they came to receive it:
- Any non-Thai permitted to permanently reside in the Kingdom under the Immigration Act;
- Any non-Thai permitted to enter the Kingdom under the Board of Investment Act;
- A juristic person under Sections 97 and 98 of the Land Code, registered as a juristic person under Thai law;
- Any non-Thai juristic person qualifying under the 24 November 1972 Announcement of the Revolution Committee No. 281, holding a Board of Investment Certificate granted under the Board of Investment Act; or
- Any non-Thai individual or juristic person who has brought foreign currency into Thailand, or withdrawn Thai Baht from a foreign resident Thai Baht account, or withdrawn money from a foreign bank deposit held in Thailand. (Under Section 19 ter(5) of the Condominium Act, the required amount under this condition is defined as “not less than the price of the unit to be purchased.”)
The Condominium Act makes clear that any non-Thai who does not meet at least one of these conditions is not entitled to own a condominium unit in Thailand.
What does this mean for inheritance? If you are a non-Thai and your heir is also non-Thai, the 49% quota itself isn’t an issue, since the unit simply passes from one non-Thai to another, preserving the same foreign/Thai ownership ratio. But it is possible — even quite likely — that your non-Thai heir won’t meet any of the additional Section 19 criteria for foreign freehold ownership. In such a case, it has previously been argued — and was previously government agency policy — that the heir would not be legally eligible to continue owning the inherited unit, with Section 19 septem of the Condominium Act applying:
“All non-Thais not qualified under Section 19 who receive the condominium unit either by inheritance or in any other way must report the matter to the relevant administrative official within 60 days from the date they receive such property, and must then sell the property within one year from the date they receive it; otherwise, the provisions of Section 19 unique shall be applied mutatis mutandis.”
Section 19 unique further provides that if the non-Thai heir fails to sell the unit within the allotted time, the Director of the Land Department has the right to sell it. In practice, this meant a non-Thai heir would need to notify the relevant Land Office within 60 days of inheritance, and — if they did not meet the Section 19 criteria — either sell the unit themselves or face having it sold no later than one year after inheriting it.
The “legal debate” mentioned above centers on whether a non-Thai heir fulfills the conditions in Section 19(5) of the Condominium Act, allowing them to retain ownership of the inherited unit — in other words, whether an heir can legally satisfy Section 19(5) without bringing additional foreign currency into the Kingdom.
The Land Department has revisited this issue in light of the succession provisions of the Civil and Commercial Code of Thailand (“CCC”). Sections 1599 and 1600 of the CCC provide that an heir inherits “properties of every kind, as well as his rights, duties and liabilities, except those which by law or by their nature are purely personal to him.” For some time, it has been argued that this means an heir — Thai or non-Thai — inherits, among other things, the “right” to own a condominium unit, where that right was originally established by the deceased under Section 19(5) of the Condominium Act.
Fortunately for non-Thai heirs, the Land Department’s most recent formal legal opinion on the matter aligns with this interpretation: a non-Thai heir inherits not just the condominium unit itself, but also the rights under Section 19(5) by which the deceased owner originally acquired the right to own it — allowing the heir to retain ownership of the unit indefinitely.
That said, it’s worth closing with an important caveat: the Land Department’s interpretation carries no binding legal effect — it is merely an opinion. Until the courts begin treating such cases consistently, or the law is further clarified, the legal grounds for long-term ownership of an inherited condominium unit by a non-Thai heir remain somewhat uncertain.