What are the features of freehold and leasehold when buying real estate in Thailand?

Freehold and leasehold in Thailand

Freehold in Thailand is analogous to perpetual property ownership, which is characteristic of many countries around the world. In contrast, leasehold functions as a form of long-term ownership, which is also recognized by the country's legislation. Essentially, leasehold represents a long-term rental agreement, where the tenant makes an upfront payment for the entire period, which can last up to 90 years.

Under standard leasehold agreement conditions, the property is usually granted a term of 30 years with the possibility of extending it twice for an additional 30 years, as stipulated in the agreement with the landowner.

Rights and opportunities in a leasehold.

If there are no special conditions regarding sole ownership in the legal documents, the rights under the leasehold can be inherited. Additionally, such an object can be:

• Sell;
• To give as a gift;
• Transfer the remaining term of the contract as an inheritance.

In order to include heirs in the contract, it is best to do so at the initial stage of the transaction. Although it is possible to perform this procedure later, it may incur additional legal costs that range from 50,000 to 100,000 baht (approximately 1,400 to 2,800 USD).

Registration and management of rights

Both forms of ownership, freehold and leasehold, must be registered with the Department of Land Resources in Thailand. Owners who transfer their property into leasehold lose the right to manage it for the entire duration of the contract. This implies that they do not have the ability to:

• Sell;
• To lay down;
• To rent out;
• Carry out other transactions without the consent of the Lickholder.

In addition, the owners are required to comply with the conditions for transferring ownership rights to any person specified by the leaseholder.

Rules for foreign citizens

As for the quotas for foreign investors, Thailand has strict rules regarding the acquisition of freehold rights. The area of land for a single property is distributed as follows:

• 49% can be sold with freehold rights;
• The remaining 51% is provided under a lishold.

If a foreign buyer decides to purchase a property on a leasehold basis, they have the option to convert it to freehold in the future, but only with the owner's consent and if there is a free quota for foreigners in the building. The additional payment for such a conversion is negotiated individually and usually amounts to 5-10% of the property's value with freehold rights.

It's important to know

Foreign individuals cannot register land in freehold. However, Thai companies with foreign participation have the right to register land in freehold status, provided that 51% of the shares of such a company are owned by Thai citizens. These aspects are critical for a complete understanding of the legal specifics of foreign investment in real estate in Thailand, where it is necessary to consider local laws and conditions to ensure the legal security of transactions.

Introduction to Real Estate Acquisition in Thailand

Owning apartments, condominiums, and villas in Thailand comes with specific considerations that need to be taken into account before making a decision to purchase real estate. Apartments in condominiums and buildings with apartments have differences in registration and ownership conditions.

In particular, apartments in condominiums have unique cadastral numbers, which allows them to be registered under different legal entities in the format of free ownership.freehold), as well as on the terms of long-term rental (lickhold).

Restrictions for foreign buyers

Foreign investors face certain restrictions:

• Foreigners can own only 49% of the total area of a condominium in freehold format.
• The remaining 51% share is available only on leasehold terms.

The Thailandreal estate market offers a huge number of options. For example, there are 3,755 properties available with prices ranging from$117,000.

Interesting offers in the market

One of the attractive offers is a modern one-bedroom apartment in Surin with an area of 39 m², which is priced at$546,000.

This apartment is located in a modern residential complex that offers residents a variety of amenities, including a swimming pool, gym, and parking spaces. There is also an apartment available with a stunning view of the bay, covering an area of 222 m², located in Patong and offered for...$191,000.

Additional apartment options

There are other options as well, such as:

• One-bedroom apartments between Surin and Bang Tao beaches, with an area of 36 m², priced at$356,000.
• Apartments in elite areas of Phuket, located just 800 meters from Bang Tao Beach, priced at$315,000for 88 m².
• Fully furnished apartment in Ravai of 42 m² offered for$152,000.

Features of apartments in Thailand

It should be noted that apartments in Thailand do not have separate cadastral numbers. Unlike condominiums, buildings with apartments can have only one owner, while apartments are usually transferred under a leasehold format. Since foreigners cannot own land in Thailand, they can only occupy apartments and common areas such as gyms and swimming pools.

Residents' rights and opportunities

All residents have equal rights to use common facilities, regardless of whether their ownership is structured as leasehold or freehold. Currently, in Thailand, you can find 4,774 listings for apartments for sale, with prices starting from$111,000.

New projects

For example, there is a new luxury apartment complex with advanced amenities located within walking distance of Bang Tao Beach, with completion scheduled for 2026.

Overview of the real estate market in Thailand

There are many interesting properties on the housing market in Thailand, including 400 apartments with a starting price of $173,000. These apartments are located in a new resort complex on the first line of Nayton Beach on Phuket Island.

This complex was built in 2023 and includes 251 apartments, with prices starting at $157,000. Modern studios are also available, offered "turnkey," just 700 meters from Bang Tao Beach, where the price per square meter starts at $132,000 for a 30 m² apartment. The property features pools, a gym, and a tropical garden, with construction completion scheduled for the fourth quarter of 2025.

Available housing options

For those looking for more affordable options, there are 231 apartments available, with starting prices as low as $72,000. This new residence will offer residents extensive pools, well-maintained gardens, and workspaces, with final completion expected in the third quarter of 2025.

The range is not ending — a new residential complex with 609 apartments has also opened in Pattaya, Chonburi, with prices starting from $54,000, and the completion of construction is expected in the second quarter of 2026.

• 186 apartments with a minimum price starting from $131,000.
• Eco-design that guarantees a 5% return.
• The planned housing delivery date is 2027.

Purchase of villas

When it comes to purchasing villas, foreign investors prefer two main types of contracts:

• Freeholdon buildings.
• Lickholdto the ground.

Notably, the right to land can be obtained through a company registered in the country itself. There are 697 villas in the catalog with prices starting from $1,146,000. A new premium villa complex in Thep Kasattri, Thalang is scheduled for completion in the first quarter of 2025.

Selection of villas

Among the listings, there is a two-story villa for $789,000, featuring a large pool, terrace, and garden, located close to golf clubs and Pasak beach, with a total area of 488 m² and four bedrooms. There is also a three-level premium villa for $683,000, situated near educational institutions and the beach, with a total area of 228 m² and three bedrooms. Modern villas with pools and relaxation areas are available starting at $723,000.

In addition, the market also features a new hotel complex with luxurious villas and pools in Thalang, Phuket, built in 2023, which includes 54 villas priced from $1,594,000.

An elite residential complex with sea views and swimming pools is also available in close proximity to Naiton Beach, starting at $822,000, with planned completion in the first quarter of 2024.

Additional offers on the villa market

• Villas with private pools, starting at a price of $584,000, are scheduled for completion in the fourth quarter of 2024.
• 21 villa priced from $372,000, depending on the location near the golf club, with an expected completion in the third quarter of 2024.

The choice between leasehold and freehold

When choosing between leasehold and freehold, many foreign investors tend to prefer leasehold, as the prices for properties in this category are about 5-10% lower. Additionally, this form of ownership allows for savings on various government fees, making the process of purchasing real estate in this amazing tropical resort simpler and more accessible.

Conclusion

To conclude this study of the legal aspects of owning real estate in Thailand, it can be emphasized that knowing the differences between freehold and leasehold is key for anyone considering purchasing property in this country. Thailand's attractive conditions and picturesque scenery attract many foreign investors, but it is important to realize that the legal system requires careful attention and awareness of the specifics of ownership.

Advantages of forms of ownership

Freehold offers a more stable ownership model, allowing for full control over the property without time limitations. However, leasehold, with its long-term management advantages, can also be a good choice, especially for those planning to stay in the country for an extended period. Moreover, it is important to consider the possibility of changing the form of ownership:

• The transition from leasehold to freehold can become a real option if certain conditions are met and there is available quota.

Advantages and disadvantages of leasehold.

Lickholding real estate also has its perks:

• This is a more accessible way to own property, especially in popular tourist destinations.

Nevertheless, it is essential to consult carefully with lawyers and keep an eye on all legal nuances to avoid potential problems in the future. The process of inheritance, resale, or transfer of ownership rights also requires attention to detail and compliance with legal norms.

Recommendations

Ultimately, the most important step before any transaction is thorough research and obtaining professional legal assistance.to ensure safety and confidence in the transaction. With the right approach and understanding of all the conditions, owning property in Thailand can become not only a profitable investment but also a source of joy for you and your loved ones in this beautiful country.