Condominium Inheritance Among Foreign Investors

In one way or another, foreign ownership restrictions over real property have always existed in Thailand. Although foreign ownership of land is strictly forbidden (except through some investment promotion laws), foreigners are allowed to own houses and condominium units. Condominium ownership, in particular, has become an increasingly popular method of investment by foreigners. When making the decision to purchase a condominium, however, foreigners must comply with several conditions under the Condominium Act of 1979.

One issue frequently raised by foreign investors is what will happen to their condominium if they pass away. Given the broad range of conditions attached to condominium ownership, foreign investors are justified in wondering about the requirements that will apply to their successor. Are children or relatives abroad able to inherit a condominium in Thailand? Can the condominium be transferred to a successor? Is it possible to arrange a final will to bequeath the condominium to any particular person?

In principle, the answer to all the above questions is "yes", but certain conditions and restrictions will apply. The Condominium Act allows only certain types of foreigners or foreign entities to purchase a condo in Thailand:

- individuals with Thai residency;

- those entering Thailand with investment promotion privileges;

- Thai-registered entities with the majority of shares/ownership held by foreigners;

- foreign entities granted an investment promotion certificate from the Board of Investment;

- individuals or entities bringing foreign currency into Thailand or withdrawing money from a non-resident baht account or from a foreign currency account.

In any event, foreigners cannot hold ownership exceeding 49% of the total area in a given condominium project.

The Condominium Act directly addresses the issue of inheritance in case of foreign ownership. It states that only the aforesaid permitted foreigners are entitled to acquire and maintain a condominium through inheritance, whether as statutory heir or inheritor by will, provided that the foreign ownership limitation of 49% of the total condominium area is not exceeded. What this means is that any heir or inheritor will only be able to take ownership of a condominium if they meet the above qualifications. In order to ensure compliance, some decide to bring foreign currency into Thailand again to repurchase the condominium of the deceased and then remit the funds back out of Thailand after completing registration of the transfer. In case the foreign heir prefers to sell the condominium of the deceased rather than acquire it, he must file a petition and obtain a court order appointing him as an estate administrator to manage the condominium.