What is Kaifak?
Kaifak (ขายฝาก — pronounced khai-fak) is legally defined as a "Sale with Right of Redemption" under Sections 491 to 502 of the Thai Civil and Commercial Code (CCC), reinforced by the Protection of People in Sales with Right of Redemption Act B.E. 2562 (2019).
1
Immediate Title Transfer
Ownership of the property legally transfers to the buyer (investor/lender) on day one at the Land Office.
2
Right to Redeem
The seller retains the legal right to buy back the property within a contractually agreed timeframe by paying back principal plus agreed profit/interest.
3
Automatic Consolidation
If the seller fails to redeem before the legal deadline, full, unencumbered ownership permanently stays with the buyer without needing a court foreclosure.
Who Can Provide a Kaifak?
Entities and individuals permitted under Thai law to act as Kaifak buyers/lenders
Private Individual Investors
High-net-worth private investors seeking secure asset-backed returns capped at 15% per annum.
Non-Bank Finance Companies
Licensed private liquidity firms and asset management businesses operating under Thai commercial regulations.
Real Estate Brokerages
Professional agencies (such as RE/MAX) that connect property owners with verified legal buyers.
Foreign Investors (Condos Only)
Foreigners can fund Kaifak contracts. However, for land default, they must operate via legal entities or stick to eligible condo units.
Mandatory Terms & Conditions in a Kaifak Contract
Key contractual elements required by the Thai Civil Code and the 2019 Protection Act
1
Sale & Redemption Amounts
The contract must explicitly state the initial sale price (principal) and the exact redemption price (principal + agreed interest return, max 15% p.a.).
2
Defined Timeframe & Maturity Date
Specific end date for redemption. Housing & agricultural land require a statutory minimum of 1 year, up to a maximum cap of 10 years.
3
Right of Physical Possession & Rent
The agreement must specify whether the seller retains the right to occupy or rent out the property during the contract term and under what conditions.
4
Fee Allocation & Property Maintenance
Clear allocation of Land Office transfer taxes, property maintenance duties, insurance, and land tax obligations between seller and buyer.
What to Be Aware Of Before Signing a Kaifak
Critical legal protection rules under the 2019 Protection of Kaifak Act
1. Side Agreements Are Void — Only Land Office Registration Counts
Never rely on unrecorded contracts, private promissory notes, or messaging app promises. Under Thai law, only terms formally endorsed on the back of the Title Deed (Chanote) at the official Land Office are legally binding.
2. Mandatory Written Notice (30–60 Days Prior to Expiration)
Under the 2019 Act, the buyer (lender) is legally obligated to deliver a formal written notice to the seller between 30 and 60 days before the contract expires, specifying the redemption amount and deadline. If the buyer fails to notify, the law automatically extends the redemption period by an additional 6 months.
3. Legal Deposit Rights if the Lender Evades Redemption
If a predatory buyer tries to avoid receiving payment when you are ready to redeem, you can legally deposit the redemption funds at the Legal Execution Department (LED) or local Land Office before the deadline to legally preserve ownership.
Side-by-Side Comparison
Kaifak (ขายฝาก) vs. Traditional Mortgage (จำนอง)
| Feature | Kaifak (ขายฝาก) | Standard Mortgage (จำนอง) |
|---|---|---|
| Title Ownership | Buyer (Investor) immediately | Borrower (Remains on Title) |
| Legal Term Cap | Up to 10 Years (Min. 1 year for housing) | Flexible (Up to 30 Years) |
| Interest Cap | Max 15% per annum by Thai law | Varies (Bank rates ~3%-8%) |
| Approval Speed | Very Fast (2 – 5 days) | Slower (3 – 8 weeks) |
| Income / Credit Check | No credit check required | Strict financial checks required |
| Land Office Fee | Higher (Transfer 2% + WHT + SBT/Stamp) | Lower (Mortgage registration fee 1%) |
Why People Choose Kaifak
- Urgent Liquidity: Capital disbursed within days when immediate cash is needed for business or personal obligations.
- No Credit Check: Ideal for self-employed individuals or business owners who fail bank criteria.
- Legally Protected Buyback: The right of redemption is officially registered on the title deed at the Land Department.
Risks & Caveats
- Strict Loss of Property: Missing the redemption deadline without legal extension forfeits the property permanently.
- Higher Upfront Costs: Because ownership transfers on day one, standard transfer fees and taxes apply upfront.
- Higher Interest Costs: Private investor rates (capped at 15%) are higher than bank mortgage rates.
Frequently Asked Questions
Q: Can foreigners participate in a Kaifak transaction in Thailand?
Yes, as investors/lenders. Foreigners can act as the buyer in Kaifak contracts to earn interest returns. However, because foreign nationals cannot directly own land in Thailand, if the seller defaults on land, foreign buyers cannot legally retain sole title to the land without proper legal structuring. Foreigners can, however, use Kaifak for condominium units within foreign ownership quotas.
Q: What is the maximum interest rate permitted under Thai law for Kaifak?
The legal ceiling for Kaifak interest/profit is strictly capped at 15% per annum above the actual registered sale price. Under the 2019 Act, any contractual clause stipulating interest exceeding 15% per year is automatically voided and reduced to the statutory maximum.
Q: What happens if the seller misses the redemption deadline by one day?
The right of redemption automatically lapses. Full, unencumbered legal title permanently consolidates with the buyer without court intervention. However, under the 2019 Protection Act, the buyer must send a formal written notice to the seller at least 30 to 60 days before expiration informing them of their redemption rights.
Q: Can the redemption period be extended after signing?
Yes. Both parties can agree to extend the contract term, provided the total cumulative period does not exceed 10 years for real estate. Crucially, this extension must be registered at the Land Office before the current term expires.
Q: Who pays the taxes and fees at the Land Office?
While the law allows parties to negotiate fee splits freely, standard practice usually assigns government transfer fees (2%), withholding tax, and specific business tax/stamp duty to the seller or split 50/50. When the seller redeems the property back, transfer fees are assessed again upon re-registration.
Need Expert Kaifak Guidance or Property Valuation?
Whether you are seeking fast liquidity or looking to invest securely in Thai real estate under registered legal protection, our team is here to assist.