Redemption Financing

Khai Fak in Chiang Mai: Raising Cash Against Your Land Without Losing It

If you own land or a house in Chiang Mai and need a large sum quickly, someone will suggest khai fak — a sale with right of redemption. It is faster than a bank, requires no guarantor, and no credit bureau check.

But khai fak is not a mortgage. Ownership legally transfers to the buyer on the day you sign. You keep the right to redeem the property within an agreed period; miss that deadline and the property is theirs outright, with no court process required. That distinction is the line between owners who use khai fak successfully and owners who lose their land.

Khai fak vs. mortgage

• Ownership — khai fak: transfers on signing / mortgage: stays with you
• Speed of funding — khai fak: days / mortgage: weeks to months with a bank
• Credit check — khai fak: generally none / mortgage: yes
• If you default — khai fak: property is forfeited at the deadline / mortgage: lender must go through court foreclosure
• Risk to the owner — khai fak: considerably higher / mortgage: lower

What the law guarantees you

The Act on the Protection of the Public in Sale with Right of Redemption Contracts for Agricultural Land or Residences, B.E. 2562 (2019) rewrote the rules. If your property is a residence or agricultural land, these protections apply automatically and cannot be contracted away:

1. Minimum one-year term, maximum ten years. Three- and six-month contracts are unlawful.
2. Return to the buyer is capped at 15% per year of the khai fak price.
3. The redemption price cannot exceed the khai fak price plus that 15% annual return.
4. You may continue living in and using the property for the full term, rent-free.
5. The buyer must notify you in writing 3–6 months before the redemption deadline. If they don't, you get an extra six months to redeem.
6. The term can be extended in writing, up to ten years in total.
7. If the buyer avoids accepting your redemption payment, you can deposit it with the Legal Execution Department or Land Office and the redemption is legally complete.

Points 5 and 7 matter most in practice, because the classic abuse is a buyer who becomes unreachable as the deadline approaches.

Every step must happen at the Land Office — signing, extension, and redemption. If anyone asks you to sign elsewhere, or to sign blank documents, walk away.

Why Chiang Mai land supports good valuations right now

Your loan amount is driven by the property's appraised value, and Chiang Mai land has been trending up. Prospect Appraisal projected Chiang Mai land values rising 5–10% in 2025, driven by:

• Urban expansion toward San Sai, San Kamphaeng and Fang
• The second Chiang Mai airport project, a 70-billion-baht investment targeted for completion in 2032
• Major retail investment, including HomePro's new branch opposite Kad Ruamchok
• The "Homes for Thai People" project developing 50-square-wah houses near Chiang Mai railway station

Highest government-appraised land values (2025 cycle)

• Tha Phae Road, Ton Lamyai Market, Warorot Market — 250,000 baht per square wah
• Chang Moi Road — 180,000–250,000 baht per square wah
• Wichayanon Road — 80,000–250,000 baht per square wah
• Chang Klan Road — 72,500–250,000 baht per square wah
• Punna Residence, opposite Chiang Mai University — 220,000 baht per square wah

Source: Treasury Department and Krungthep Turakij

Government appraisal sets fees and taxes; the amount a khai fak buyer will actually advance is usually based on market value or an independent appraisal, which can be considerably higher in active areas.

How much you can raise, and what it costs

Advances typically run 40–80% of appraised value, depending on property type, location, and how easily the property could be resold. Some Chiang Mai providers set a minimum advance of 100,000 baht. Vacant land on a main commercial road tends to command the highest percentage; hard-to-resell properties the lowest, if any buyer takes them at all.

Accepted titles are generally Nor Sor 4 Jor (land title deed) and Or Chor 2 (condominium title). Accepted property types include land, detached houses, twin houses, townhouses, shophouses, and residential condominium units.

Commonly refused: landlocked plots with no legal access, paddy fields, land crossed by high-voltage power lines, low-lying or flood-prone land, plots where the access road is too narrow for two cars to pass, and cases where the owner asks for an advance close to the property's actual sale value.

Worked example

50 square wah appraised at 200,000 baht per wah is 10 million baht.

• Advance of roughly 4–7 million baht
• At the legal maximum of 15% per year, that is 600,000–1,050,000 baht annually, or about 50,000–87,500 baht per month
• Established providers in the market quote well below the cap — around 0.75% per month (9% per year), or roughly 37,500 baht monthly on a 5-million-baht advance

This is the calculation that decides everything. If you cannot see clearly where both the monthly payments and the eventual redemption sum will come from, khai fak is not your answer.

Costs on registration day

Typical rates in the Chiang Mai market:

• Khai fak registration fee — 0–2%, calculated on the government appraised value
• Stamp duty — 0–0.5%, calculated on the appraised value or khai fak price, whichever is higher
• Specific business tax — 0–3.3%, calculated on the government appraised value
• Loan arrangement fee — 0–5%, calculated on the advance amount

The arrangement fee is what catches people out. It isn't a Land Office charge — it's the buyer's own service fee, and 5% of a 5-million-baht advance is 250,000 baht gone from the sum you expected to walk away with.

By comparison, registering a mortgage is far cheaper: stamp duty of 0–0.05% of the loan (capped at 10,000 baht) and a mortgage registration fee of 0–1% of the mortgage value (capped at 200,000 baht). That alone is worth asking about before committing to khai fak.

Settle who pays each item in writing before the appointment, and always get the net amount you will receive in hand confirmed beforehand.

Documents you'll need

• Title deed, photographed front and back
• Photographs of the property
• Copy of your ID card
• Copy of your house registration
• Copy of marriage certificate or name-change certificate, if applicable
• Company registration certificate, if the property is held by a company

Payslips, bank statements and proof of income are generally not required, and there is no occupation or age restriction — applicants over 60 are accepted, because the assessment is of the property, not of you.

Warning signs

• Being asked to sign anywhere other than the Land Office
• Blank or incomplete documents
• A term shorter than one year
• A return above 15% per year
• Additional side agreements attached without explanation
• No clear net figure until the day itself
• Pressure to decide immediately

Khai fak, outright sale, or bank loan?

• Temporary cash need, stable income, confident you can redeem — khai fak
• Good credit, no urgency — bank or secured lending
• Need cash fast but don't want to transfer ownership — a mortgage with a private lender, cheaper fees, and you keep title
• You no longer want the property, or can't see how you'd redeem it — sell outright
• Property sits empty but you're not ready to sell — rent it out first
• You need cash and the property would sell well anyway — selling outright is usually better, with no monthly payments

The most common mistake is using khai fak to solve a problem that actually calls for a sale. Without a concrete plan for the redemption money, khai fak postpones the problem by a year and ends with the property lost well below market value.

Frequently asked questions about khai fak

Can I stay in the property?

Yes — rent-free, for the full contract term, by law.

What's the maximum return the buyer can charge?

15% per year. Established providers typically quote 0.75–1.25% per month.

How long can the contract run?

One year minimum, ten years maximum including extensions.

What if I can't redeem in time?

Three options: negotiate an extension, refinance elsewhere, or sell on the open market and keep the difference after redeeming. The third usually recovers the most money — but start at least four to six months before the deadline.

Is there a credit check?

Generally not. The buyer is assessing the property, not you.

Can I use a property that still has a bank mortgage?

The mortgage must be discharged first, usually settled the same day at the Land Office from the khai fak proceeds, with the balance paid to you.

Do condos qualify?

They can, but the 2019 Act is aimed at residences and agricultural land. Read the contract terms for other property types especially carefully.

Have us check the numbers first

We are a Chiang Mai real estate agency, not a lender — so we can tell you plainly what your property is worth on the open market, and whether khai fak or an outright sale leaves you better off.

In many cases we've reviewed, an ordinary sale nets more than a khai fak that ends in a missed redemption. Send us the property details for a free valuation before you decide.

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Read next: Selling your property with us · Rental management

Land value figures sourced from the Treasury Department and Krungthep Turakij reporting (February 2025). Fee rates and acceptance criteria reflect published terms of Chiang Mai mortgage and khai fak providers. This article is general information, not legal advice. Consult a lawyer or Land Office official before signing.