Forms of Property Ownership in Thailand: Freehold and Leasehold
In Thailand, there are two main forms of property ownership: freehold and leasehold. Freehold is perpetual ownership, similar to what exists in most other countries. When you purchase a property under freehold, you become its full owner with no time limitations. This is a popular option for long-term property use, especially among Thai citizens.
Leasehold, on the other hand, is a long-term lease registered with the government. The standard leasehold term is typically 90 years, with full payment made upfront. Initially, leasehold is granted for 30 years, with the possibility of two additional 30-year extensions. The conditions for extension are confirmed in the contract with the developer or landowner. Leasehold can be inherited, sold, gifted, or transferred to another person for the remaining term.
It is advisable to include heirs in the leasehold contract at the time of signing. While this can be done later, any changes will incur additional legal fees. Both freehold and leasehold are registered with the Thai Land Department. Notably, the landowner who grants leasehold cannot sell or rent the property without the consent of the leaseholder.
Foreign Ownership Quotas
Foreign nationals can own up to 49% of a property's space in freehold, with the remaining 51% typically registered as leasehold. If quotas allow, a leasehold property can be converted to freehold for an additional fee. It is worth noting that freehold properties are usually 5–10% more expensive.
Foreign nationals cannot directly own land as freehold, but Thai legal entities with at least 51% Thai ownership can register land as freehold.
Ownership of Apartments, Condominiums, and Villas
Apartments in condominiums can be registered as either freehold or leasehold, but foreigners are allowed to own up to 49% of the condominium’s area under freehold. Villas are typically registered with two contracts: freehold for the building and leasehold for the land. Land can only be registered as freehold through a Thai legal entity.
Freehold or Leasehold: Which to Choose?
For foreign investors, leasehold is often the more attractive option, as such properties are 5–10% cheaper, and tax and registration costs are lower. Leasehold also provides flexible conditions for resale or transfer of ownership.
Taxes for Freehold and Leasehold
Freehold is subject to a 2% transfer fee and a 0.5% stamp duty. The annual property tax ranges from 0.02% to 0.1%, depending on the property's value.
Leasehold is subject to a 1% registration fee and a 0.1% stamp duty.