Property Ownership In Thailand - The Leasehold

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Posted by Continent Property on September 21, 2022
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Leasehold Property in Thailand Explained

For foreigners desperate to own landed property but are not keen on setting up companies to purchase property, some opt for a Leasehold contract. It’s common knowledge that foreigners are unable to own the land outright but some properties are just too attractive to walk away from, so property buyers in Thailand turn to the Leasehold agreement.

You can find out more about the law regarding foreign ownership of land by clicking here.

Leasehold Property in Thailand Explained

What’s The Difference Between Leasehold and Freehold in Thailand?

When signing a Leasehold agreement you are essentially a tenant, renting on a long-term basis. While you do maintain exclusive rights to the land and property during that agreement, you are without any ownership rights. A Freehold agreement, on the other hand, will mean that you own the property outright and it is yours to do as you please, even pass it on as an inheritance if done correctly. There are additional benefits that come with the Leasehold though including low taxes, lower property costs, cash payments accept and the property does not also need to reported for tax purposes.

30 + 30 + 30 Leasehold Contracts In Thailand

Unsurprisingly, these agreements can be made on both Condominiums, Villas and Townhouses. Although in regards to the Condominiums, you can generally find both Freehold and Leasehold units available. The “sale” of the property and land will allow you unrestricted access for a maximum of 30 years, with the option to extend – commonly 30 + 30 + 30. Leasehold property contracts are completely legal and offer an interesting alternative to a Freehold.

Leaseholds In Thailand Summary

Property investors that choose going down the Leasehold route will be able to obtain a 30 year lease, with the option to have an contract extension on the land for an additional 30 + 30 years. The main Pros and Cons of this though are as follows:

Leasehold Pros

  • More property options with a Leasehold, including condos, villas and townhouses
  • Cheaper property prices with a Leasehold leading to a lower financial commitment
  • After the initial Lease agreement ends, you have the option to walk away
  • As a Leaseholder, you are not the only person responsible for the maintenance and upkeep of the property and land

Leasehold Cons

  • Limited to initial 30 year Lease (this does work to many peoples favour though)
  • As a Leaseholder and not a Freeholder, you do not have a voice when it comes to Condo and Estate meetings
  • You will likely have to pay a registration fee and any condo taxes applicable

As you can see, there are still many benefits to having a Leasehold over a Freehold, depending on your needs and how much commitment you want to have in regards to owning property in Thailand.

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