Usufructs in Thailand

If you want more freedom to use Thai properties that are restricted to foreign nationals, a usufruct is one of the ways to make this possible. Usufructs in Thailand are commonly used to gain rights over houses, villas, and land. They are often considered a convenient way to navigate laws restricting foreign ownership that prevent owners from buying certain kinds of real estate. But before you sign anything, you need to know how usufructs work in Thailand so that you can avoid getting into legal trouble or scammed by a dishonest landlord.

This page will explain the basics of usufructs in Thailand, how to use them, and what you need to do to obtain them.

What is a Usufruct?

A usufruct is a legal right that enables you to use and leverage someone else’s property without being the owner. As the usufructuary, you can live in, rent, or profit from an immovable property while ownership remains with the original owner. You can make use of the property however you see fit, provided there are no unrequested alterations or damages.

Usufructs in Thailand

Under Section 1418 of the Thai Civil and Commercial Code (TCCC), the contract sets the start and end dates for a usufruct. Temporary usufructs are treated in a similar manner to leases in Thailand, with a validity of up to 30 years. In some cases, a usufruct may not have a set time limit, allowing you to benefit from it for your lifetime.

While the usufruct is valid, you are responsible for any of the expenses associated with managing the property. This includes having to pay Thai taxes, duties, and interest on debts associated with the property. When the usufruct has either expired or come to an end, you will be required to return the property to the original owner.

While there are no laws restricting the usufruct from being granted to a foreigner, it will need to be registered with the Thai Land Office. There, the Land Office officer has discretion to impose conditions or reject the application, or if there should be certain limitations in place.

The Transfer of Thai Usufructs

Under some circumstances, usufructs in Thailand can be transferred from the usufructuary to another individual, but there are some limitations.

Transferring a Usufruct to a Third Party

Under Section 1422 of the TCCC, you may allow another person, such as a family member, to exercise your usufruct rights, unless the agreement states otherwise. However, the property owner has the right to sue the transferee if they violate the terms or cause any significant damages.

Transferring a Usufruct Through Inheritance

The right of a usufruct usually terminates upon the usufructuary’s death, and inheriting it is not possible. However, if the original property owner passes away, the usufruct continues to remain valid even upon their death.

Usufruct Risks in Thailand

Not having a usufruct can put you at a disadvantage if you want to own property that’s restricted to foreigners. Without one, you miss out on certain legal protections, passive income from being able to rent out the property (which you cannot achieve through a standard lease), and long-term or lifetime use of the property.

However, while holding a usufruct grants multiple benefits in managing property that’s not your own, there are also certain risks. Other than the death of the usufructuary or its expiry date, the usufruct can also be terminated if you fail to satisfy conditions laid out in the agreement or cause destruction to the owner’s property. There is also no guarantee that the Thai Land Office will approve your usufruct application, and submitting wrong or incomplete paperwork can result in delays or rejections.

You are also liable for any damages or significant changes caused to the property, unless you can prove it wasn’t your fault. If the owner insures the property, the usufructuary is typically required to cover the insurance premiums for the duration of the usufruct, just as you would have to do for taxes and the like.

You can simplify the process and avoid legal pitfalls by consulting a qualified Thai Property Lawyer for assistance. Your real estate lawyer (not agent) can assist with drafting the usufruct agreement, ensuring compliance with eligibility requirements, and providing practical advice for avoiding unfair agreements and trouble with Thai law.

Professional Assistance With Usufructs in Thailand

While obtaining a usufruct offers an easier way for you to benefit from a property you can’t legally own, securing one is challenging without proper legal support. To obtain a legal usufruct and get usage rights for the property you want, reach out to Siam Legal’s property team for professional guidance.

As a full-service law firm with over 20 years of experience, we assist foreigners with property matters in Thailand. Our lawyers are well-versed in Thai law and can help you secure usufruct rights efficiently and with reduced risks. We will handle all the demanding parts of the process on your behalf, including assessing your eligibility for an usufruct, reviewing the contract for fairness and accuracy, facilitating its registration with the relevant authorities, and assisting with transfers when needed.

Contact Siam Legal today to book a consultation with our property lawyers and take the first step to securing the Thai property you have been dreaming of with peace of mind, knowing you are fully compliant.

Usufruct Rights in Thailand FAQs

Can You Rent Out Property as a Usufructuary?

Yes, having a usufruct also allows you to rent out the associated property to other third parties and collect income, but you will have to pay Thai taxes on this income as normal.

Can Foreigners Lease Land in Thailand?

Yes, unlike with buying Thai land, foreigners are permitted under Thai law to sign a leasehold agreement as a way to obtain land usage rights. These leases can either be short-term or long-term, with a validity period of up to 30 years, with the possibility of extension.

Can You Build a Villa or House on Leased Land?

Yes, if you have a valid construction permit and the duration of the land lease has not expired yet, you can build a real estate structure on the land, such as a villa or house, if you obtain a construction permit and a superficies. Any structure you build can also be owned separately from the land you’ve leased, and you can own the property in your name.