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Which types of property can a foreigner own outright, and how is a land plot registered when purchasing a villa? We examine the practical differences between Freehold and Leasehold ownership structures in Thailand.
Freehold and Leasehold in Thai property listings are not marketing labels, but two distinct legal instruments. They are registered differently at the Land Department, grant different rights, operate for different periods, and open different exit strategies from a transaction.
For a foreign buyer, the choice between Freehold and Leasehold depends on your objective and Thai law. Under the Land Code, a foreigner cannot own land outright, so land plots under villas are purchased as Leasehold—there is no other lawful path to land ownership. With condominium units, you have more flexibility; both forms are available. This decision affects your entry price, the registration fees you'll pay, and how easily the property will resell.
Freehold means perpetual ownership: the right to own, use, rent out, mortgage, sell, and pass on by inheritance. Your name is registered with the Land Department, and you receive a Title deed for the apartment (Condominium Title Deed).
The right of foreigners to purchase condominium units was established by the Condominium Act B.E. 2522 (1979). It operates under three conditions:
the building is registered as a condominium and holds a licence from the Land Department;
the unit falls within the foreign ownership quota of the building;
payment originates from abroad in foreign currency.
The third condition is most often overlooked. The Land Department requires an FET form (Foreign Exchange Transaction Form, formerly known as Thor Tor 3). Thai banks issue this for transfers of ฿50,000 USD or more; for smaller amounts, they provide a bank letter or credit note instead. In the payment description, you must state the unit number, project name, and buyer's name as shown in their passport. Without an FET, the Land Department will not register the transaction, even if funds have already arrived in Thailand.
Section 19 bis of the Condominium Act restricts aggregate foreign ownership to 49% of the total saleable floor area of the building.
Leasehold means a registered right of use for a period up to 30 years, based on Section 540 of the Civil and Commercial Code of Thailand. A lease lasting more than three years must be registered at the Land Department; otherwise, it remains valid for only the first three years.
use of the property for the entire lease term, regardless of changes in ownership;
subletting and assignment of rights, including resale on the secondary market, if specified in the contract;
passing rights to heirs, provided this clause is included in the lease agreement;
access to land and villas that a foreigner cannot register as freehold;
significantly lower registration costs compared to freehold.
With a villa, the land is leased while the building itself is registered under a separate ownership right (superficies, Sections 1410–1416 of the Civil and Commercial Code). The house belongs to the buyer, not the lessor.
an option to renew at the tenant's discretion rather than automatic renewal;
a separately registered ownership right in the building;
the lessor's obligation to execute a new lease and penalties for refusal;
For a new renewal period under a 30+30+30 structure, the original owner's involvement, a fresh agreement, and re-registration are required.
On the investment horizon separately. If you plan to hold the property for 5–10 years, the difference between a 30-year and a 90-year lease has no effect on returns: the apartment moves to the secondary market long before the first term ends, and the next buyer receives the remaining 20–25 years. Leasehold functions as an investment tool precisely within this logic, not as a way to pass property to grandchildren.
Parameter | Freehold | Leasehold |
|---|---|---|
Legal nature | Ownership right | Registered right of use |
Term | Perpetual | 30 years under a single agreement |
Primary document | Title deed for the apartment | Lease agreement + title deed |
Available property types | Condominium units within the 49% quota | Apartments, villas, land plots |
Inheritance | Yes, under standard rules | Yes, if included in the agreement |
Resale on the secondary market | Unrestricted | Assignment of rights, subject to contract terms |
Renewal | Not applicable (perpetual) | Requires a new agreement and registration |
FET requirement | Mandatory | Not required |
Registration costs | Up to 6.3% of transaction value | 1.1% of lease sum |
Property price | Usually 10% higher | Base project price |
Rates apply equally to Thai nationals and foreigners. The law does not specify who pays; cost allocation is fixed in the contract.
Fee | Rate | Calculation basis | When applied |
|---|---|---|---|
Transfer fee | 2% | Appraised value | Always upon transfer of ownership |
Business Tax (SBT) | 3.3% | The greater of appraised or sale price | Seller owned for less than 5 years |
Stamp duty | 0.5% | Registration value | Instead of SBT, if ownership exceeds 5 years |
Withholding tax | Progressive scale | Appraised or sale price | Always upon transfer of ownership |
Lease registration | 1% | Total lease amount for the full term | Leasehold longer than 3 years |
Stamp duty on lease | 0.1% | Total lease amount for the full term | Leasehold longer than 3 years |
The maximum for freehold combines three items: 2% + 3.3% + 1% = 6.3% of the transaction value
Fee | Freehold new-build | Freehold secondary market | Leasehold 30 years |
|---|---|---|---|
Transfer fee, 2% | ฿200,000 | ฿200,000 | none |
Business Tax, 3.3% | ฿330,000 | ฿330,000 | none |
Withholding tax, 1% | up to ฿100,000 | up to ฿100,000 | none |
Lease registration, 1% | none | none | ฿100,000 |
Stamp duty on lease, 0.1% | none | none | ฿10,000 |
Total costs | ฿630,000 (6.3%) | up to ฿630,000 (6.3%) | ฿110,000 (1.1%) |
Seller pays | ฿530,000 | ฿315,000 | split 50/50: ฿55,000 |
Buyer's share, 50/50 split | ฿100,000 | ฿315,000 | ฿55,000 |
Phuket developers commonly structure freehold apartment sales so the seller pays the Business Tax and withholding tax, whilst the transfer fee is split equally: the buyer pays ฿100,000, or 1% of the price. There is a catch, though—freehold apartments from a developer command a higher price than leasehold ones.
On the secondary market between two private parties, costs are typically split 50/50, and the buyer pays ฿315,000. With leasehold, you may see either arrangement: a 50/50 split or the full 1.1% allocated to the buyer.
All three scenarios need clarification from the developer or seller before signing any reservation.
Timescales. Registration itself at the Land Department takes one business day for both forms. Preparation of the freehold document set, including the FET, takes 5–15 business days. Leasehold agreements take longer because of text negotiation—allow 2–4 weeks.
The owner's tax obligations after the transaction, including annual Land and Building Tax, are covered in the article Property taxes in Thailand.
Purpose | Recommended form | Why |
|---|---|---|
Permanent residence, second home | Freehold | Perpetual ownership, straightforward inheritance |
Passing to children | Freehold | Inheritance under standard rules |
Investment over 5–10 years | Leasehold | Lower entry price and registration costs |
Letting through a property management company | Either | The management programme operates identically for both forms |
Land plot + villa | Leasehold – land | Land ownership is not available to foreigners |
Ownership structure does not affect rental income: a tenant is indifferent to the legal form under which the unit is held. The difference emerges at entry, where leasehold is cheaper both in property price and registration fees, and at exit, where freehold has better liquidity when selling to a Thai buyer.
For new-builds, request the condominium licence and the developer's land title deed.
For resale property, arrange due diligence through a Thai solicitor: title deeds, encumbrances, project documentation.
Clarify who pays each fee in the schedule above, and have this documented in your contract.
Review the lease agreement for clauses on renewal, assignment, and succession.
Obtain an FET when purchasing freehold.
Confirm all additional charges specific to your chosen property.
Offers in both ownership forms are gathered in our Phuket property catalogue
This material is for information purposes. Before proceeding with a transaction, verify current rates and requirements with a Thai solicitor; Land Department regulations and practice change.
Only if the building has a vacant foreign quota and the developer is willing to carry out the conversion. Such options are rarely written into contracts, so you should ask before committing to the purchase.
The initial term ends and a new agreement must be negotiated with the property owner. The renewal option provides grounds to enforce this through the courts.
Yes. The rights under the agreement transfer to the buyer with registration at the Land Department. Check two points: whether the landlord's consent is required and whether they charge a fee for the transfer.
It is not strictly required: funds for a Freehold purchase can be transferred to the developer's account when buying a new building, or to a lawyer's account when buying on the secondary market. Your own account simplifies the process of obtaining a Foreign Exchange Transaction certificate and paying the service charge.
Neither. The Maintenance Fee, utilities and annual land and property tax are charged equally for both forms of ownership.
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