What Happens When a Foreign Heir Condo Thailand Unit Passes To Isn’t Qualified
A foreign heir condo Thailand law recognizes may inherit — but if they don’t meet the Condominium Act’s foreign ownership criteria, they have just one year to sell it or bring themselves into compliance.
If you are a foreigner who has purchased a condominium unit on a freehold ownership basis in Thailand, you may assume that part of what you bought includes the peace of mind of being able to leave the unit to your heir. However, if your heir is also a foreigner, this is only partially true. Thailand’s well-known restrictions on foreign freehold ownership of immovable property also affect whether — and how — a foreigner can own an inherited freehold condominium unit.
Thailand’s condominium ownership rules are set out in the Condominium Act (1979), as amended (the “Condominium Act”). The Act allows foreigners to own a freehold condominium unit only under certain conditions. Perhaps the best-known 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 foreigners meeting one or more of the following conditions are entitled to receive freehold title to a condominium unit in Thailand, regardless of how they came to receive it:
- Any foreigner permitted to permanently reside in the Kingdom under the Immigration Act;
- Any foreign immigrant permitted to enter the Kingdom under the Board of Investment Act;
- Any alien juristic person registered under Sections 97 and 98 of the Land Code;
- Any alien 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- Any alien or alien juristic person who has brought foreign currency into Thailand, or withdrawn Thai Baht from a foreign resident Thai Baht account, or withdrawn money from a foreign bank deposit held in Thailand.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 amount required under this condition is defined as “not less than the price of the unit to be purchased.”)
The Condominium Act makes clear that any foreigner 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 foreigner and your heir is also a foreigner, the 49% quota itself isn’t an issue, since the unit simply passes from one foreigner to another, preserving the same foreign/Thai ownership ratio. However, it’s quite possible — even likely — that your foreign heir won’t meet any of the additional Section 19 criteria for foreign freehold ownership. In that case, while your heir may have legally inherited the condominium unit, they will not be legally entitled to continue owning it, and Section 19 septem of the Condominium Act applies:
“All foreigners 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 quinque shall be applied mutatis mutandis.”
Section 19 quinque further provides that if the foreigner fails to sell the unit within the allotted time, the Director of the Land Department has the right to sell it.
In practice, this means that if your condominium unit is inherited by a foreign heir, that heir must notify the land officer at the Provincial Land Office (or Branch Land Office) where the condominium is located within 60 days of the inheritance. If the heir does not meet the Section 19 criteria, they must then comply with Section 19 septem — either selling the unit themselves, or risking having the Director of the Land Department sell it on their behalf. Your foreign heir would have up to one year from the date of inheritance to either sell the unit or bring themselves into compliance with Section 19.
In most cases, the best — and possibly only — way for your heir to comply with Section 19 would be to transfer the relevant amount of foreign currency into Thailand. Once that transfer is made, your foreign heir would then be entitled to continue owning the freehold condominium unit indefinitely.
Foreign owners planning their estate in Thailand should factor this rule into their planning well in advance, since a foreign heir condo Thailand inheritance passes to may face a hard one-year deadline with real financial and legal consequences if compliance isn’t achieved in time.