Risks of buying property in Thailand – and how to check them before you pay

The main risk of buying property in Thailand is that your money reaches the developer before you have any protection: an escrow law exists, but developers are not obliged to use it. The other risks follow from that – delays or a developer going bust, a "foreign quota" unit that does not exist, money sent the wrong way, nominee schemes for villas, and returns calculated on short-term rentals that are illegal without a hotel licence. All of this can be checked before you reserve.

Is it safe to buy property in Thailand? Thousands of foreigners own condos here without problems. The ones who run into trouble usually skipped a check that would have taken a day.

We are on the Thai side of the deal in Pattaya, and we would rather tell you about a problem before you pay than explain it afterwards. Below are the pitfalls one by one, without scare stories, with how to catch each in advance.

Pros and cons for a foreign buyer

1. Escrow exists, but not for you

Thailand has had an escrow law since 2008, and commercial banks offer escrow services. But neither that law nor the Condominium Act obliges developers to use it. In practice, off-plan payments go straight to the developer as construction progresses. You can ask for escrow; the developer may refuse.

What this means: if construction is delayed, your money is already with the developer. If the developer goes bankrupt, a buyer without escrow is an unsecured creditor at the back of the queue.

How to check: the developer's track record – how many buildings delivered and how late compared with the promised dates. More in Developer and foreign quota.

2. A "foreign quota" unit that does not exist

Foreigners may own no more than 49 % of a building's unit area. In popular projects that share sells out early. Then a unit is sold "with freehold to be arranged later", or quietly switched to leasehold. The Land Office will refuse to register a unit to a foreigner if the quota is full, whatever the contract says. The same applies when you resell: another foreigner can buy only if the quota is free on the day of transfer.

How to check: a written letter from the developer or the building's juristic person on the remaining quota before you reserve; "freehold within the foreign quota" written into the reservation and the contract.

3. A building without permits

Sales sometimes start before the developer has a building permit and an approved environmental impact assessment (EIA), without which a large building cannot be built. In Bangkok, courts have twice – in 2021 and 2023 – revoked permits after sales had started.

There is protection. Since 31 January 2025, a condo reservation with a developer must follow a standard form approved by the Office of the Consumer Protection Board: in Thai, without unfair terms. If the developer has not obtained EIA approval where it is required, the buyer may cancel and get the deposit back. If the "reservation" was just a receipt, getting the money back means going to court.

4. Land, slopes and nominee schemes

Mortgaged land. Developers often borrow against the land to build – that is normal. But the bank must release the unit before it is transferred to you. A Land Office extract shows it.

Hillside plots. On Phuket there have been cases where a land document for one plot was used to claim another plot higher up a slope, in one case 90 metres above sea level on a gradient steeper than 35 %, where no construction was allowed. The ban on building above 80 metres on Phuket was lifted by a decision published in the Royal Gazette on 13 December 2024, and the rules now differ by zone. A villa "high on the hill with a sea view" needs checks of height, slope, title and permits.

Nominee schemes. "Buy the villa through a company, the Thai director is a formality" is illegal. Under the Foreign Business Act it can mean up to three years in prison or a fine of up to 1,000,000 baht, and the foreigner is liable too. In 2026 the authorities carried out raids: on Koh Phangan 22 foreigners were detained and more than 40 rai of land seized.

"My company is American, so the Treaty of Amity lets me own land." It does not: the treaty allows Thailand to restrict foreigners in land and gives Americans equal treatment only in leasing. More in Freehold and leasehold.

5. Money and documents

• Paying into a personal account of a sales agent or "lawyer" instead of the developer's company account.
• A "reservation" in cash or by transfer without the standard reservation contract.
• A lawyer recommended by the seller. That is a conflict of interest. You need your own.
• Under-declaring the price in the contract "to save tax". Fees are based on the appraised value, so the saving is small – and later you can only transfer out the confirmed amount. The Thai Supreme Court has struck down such clauses.
• A general power of attorney to an intermediary. The property could be sold or mortgaged without you. Give a power of attorney only for one specific transaction.
• Paying through a transfer app that delivers money as a local baht payment – you may end up without the bank confirmation needed for freehold. See Transferring money.

Before a reservation we ask the developer for documents, not promises: company registration, the land title, the building permit, EIA approval where needed, and the letter on the remaining foreign quota. We speak to the sales team in Thai – much becomes clear in the first conversation. If something does not add up, we will say so honestly, before you pay.

6. Is Airbnb legal in Thailand?

For a normal condo, no. Under the Hotel Act of 2004, renting out accommodation for less than 30 days requires a hotel licence. An ordinary condominium unit does not have one, and most building rules ban short-term letting anyway. In 2018 a court in Hua Hin found an owner who rented out a condo by the day and week in breach of the law.

There is a tax side too: a condo let by the night counts as commercial property for land and building tax, at a rate from 0.3 % instead of 0.02 % (Ministry of Finance and Interior notice of 29 May 2020).

In September 2026 the government approved in principle a draft accommodation law to replace the Hotel Act. It is not law yet, and lawyers expect that it will not automatically legalise short-term rentals in condominiums.

"Guaranteed rental returns" are a promise by the developer or operator, not by the state. If payments stop, your remedy is a claim in a Thai court – and the guarantee is often already built into the price.

How to calculate: income on monthly rents in the area; daily rentals only for projects with a hotel licence.

7. Selling and taking money out

Selling to a foreigner is possible only if the building has free quota on the day of transfer; selling to a Thai buyer is always possible. The seller's taxes are paid at the Land Office on the day of transfer.

Taking money out after a sale: the bank will usually ask for the original bank confirmations of foreign currency from the purchase, the Land Office sale contract and the tax receipts. Under Bank of Thailand rules, for 200,000 dollars or more the bank asks for documents showing where the baht came from; there is no separate tax on taking money out. Without the confirmation of foreign currency, you can usually only transfer out the amount you can document. Keep the originals for as long as you own the unit.

Assigning an off-plan contract before completion requires the developer's written consent and usually a fee of 1–3 % of the price.

8. At home: what Western buyers forget

Reporting. US citizens report a Thai bank account on FBAR above 10,000 dollars in foreign accounts; Spanish residents declare foreign property over 50,000 euros on Modelo 720; French residents may owe IFI wealth tax on property worldwide.

The 180-day rule. If you live in Thailand 180 days a year or more, you become a Thai tax resident and foreign income brought into Thailand can be taxed here.

Inheritance. A US citizen's Thai condo is within US estate tax; a long-term UK resident's is within UK inheritance tax. Think about a will early. More in Taxes.

Currency. The price and the rent are in baht; your loan, savings and taxes are in dollars, pounds or euros.

Is Thailand property a good investment in 2026?

Here is what the data says, without promises.

Foreign buyers are still buying. According to the Real Estate Information Center (REIC), foreigners bought 14,899 condo units in Thailand in 2025 – 2.2 % more than a year earlier – but spent 10.7 % less, 60.92 billion baht. By province, Bangkok led with 7,029 units, Chonburi (Pattaya) followed with 4,164 and Phuket had 1,190. In the first quarter of 2026, foreign purchases fell 17.3 % year on year.

Prices are flat in the mass market. REIC's price index for new condos in Chonburi stood at 101.7 in the first quarter of 2026 (2022 = 100), down 1 % in a year. Claims of 10–12 % yearly growth in Pattaya are not supported by this official index.

There is a lot of supply. In May 2026 the press reported about 400,000 unsold homes across Thailand, the highest level since the 1997 crisis. Developers compete with discounts and gifts such as furniture and air conditioning.

What this means for you. In 2025–2026 Thailand is a buyer's market: plenty of choice, room to negotiate, slow price growth for ordinary condos. Buying makes most sense for living in and long use. As an investment, count only on real monthly rent in that specific building, after fees and taxes, and remember that on resale you compete with new projects and depend on free foreign quota.

Should you buy a condo in Thailand?

Honestly: yes, if you buy to live in or to spend long winters, and count rent on a monthly basis. Not if the whole calculation rests on advertised returns, daily rentals or a "90-year lease".

A condo in the foreign quota, paid for correctly, from a checked developer, with a contract your lawyer has read, is a clear purchase. Risk appears where one of those steps is skipped.

• The developer's track record: delivered buildings and dates.
• Land title, building permit, EIA – before reserving.
• Remaining foreign quota – in writing in the reservation.
• Standard reservation contract; an independent lawyer reads the sale contract.
• Payments to the company account, from abroad, in foreign currency, with a bank confirmation.
• Returns calculated on monthly rents, not on adverts.
• A power of attorney only for the specific deal.
• Original bank confirmations kept until you sell.

Start with the developer check: it closes half of the pitfalls on this list before you reserve. Next step: Developer and foreign quota.

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