The Difference Between Foreign Leasehold & Freehold in Thailand

Leasehold and Freehold

When searching for a Phuket property to buy or invest in, an important consideration is the ownership choice of freehold or leasehold. This is particularly important given the fact that foreigners are unable to officially own land, due to the Land Code of Thailand.

What are leasehold and freehold ownerships?

A leasehold agreement is a long-term, but temporary purchase right that does not include permanent ownership. It is therefore a method of property tenure through which a buyer acquires the right to occupy a particular building or land for a pre-agreed time period.

Upon expiration of the contract, the rights are returned to the owner, or the contract may be extended further, subject to agreement.

As for freehold, a property is fully owned upon purchase, with the buyer receiving full property deeds. Although foreign land ownership is forbidden, the Thai Condominium Act states that foreigners may own a condominium unit within the foreign freehold ownership quota, up to 49% of total occupancy (51% of rooms in a development must be Thai owned). By contrast, there is no foreigner percentage limit for leasehold condominium purchases.

Which is more suitable for you?

Leasehold Advantages

– Leasehold purchases can be significantly cheaper.
– Leasehold properties are often managed by professional developers, helping to
ensure high maintenance standards, with the leaseholder not being the sole
individual responsible for upkeep.
– Leasehold options provide a wider choice of properties (not just condominiums).

Leasehold Disadvantages

– Once a leasehold contract is expired, the purchaser no longer holds property rights
(although the leasehold can be contractually extended).
– In the event of natural disaster or land expropriation, the leaseholder is not due
– The leaseholder does not have the opportunity to vote at official meetings.

Freehold Advantages

– Freehold buyers can register condominium units in their own names,
– Freehold buyers can own the property without time-limit, and sell, mortgage or pass
it on to their family members as inheritance.
– Where disaster or expropriation may occur, a freehold buyer will also receive
compensation in proportion to the land deed.
– Freehold condominiums contain the potential to increase in value in line with future
property prices; thereby allowing for the possibility of a combined return from both
rent and capital gain.
– Freehold owners can have the right to vote at property meetings.

Freehold Disadvantages

– The management of the building is primarily dependent upon the decisions of a
housing committee. This can occasionally be problematic regarding common area
and building maintenance.
– Foreign freehold in Thailand is usually more expensive, including higher
administrative costs and transfer fees.
– Choice of property is officially limited to condominiums (at a 49% ownership quota).

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