Foreign Property Ownership in Thailand: Three Misconceptions That Cost Buyers Time

Foreigners in Thailand have two main forms of ownership: freehold and leasehold. Freehold gives full ownership with no time limit; leasehold is a registered right of use for 30 years, with the option to extend for a further 30 years, twice.

What are freehold and leasehold

Freehold and leasehold are both registered at the Land Department. Which form is available to a foreigner depends on the type of property:

Condominiums are governed by the Condominium Act B.E. 2522 (1979): it allows foreigners to hold units freehold within the quota. For a villa, Thai law treats the structure and the land as separate assets, so they are registered separately.

Freehold carries full property rights: you can sell it, give it away and pass it on by inheritance. Leasehold can carry the same rights, but only if they are written into the lease agreement.

Buying freehold usually costs somewhat more: a premium of around THB 10,000 per m² is paid for freehold within the quota (about $300 at 33 baht to the dollar). The buyer also pays a registration fee: about 3–3.3% for freehold bought from a developer, and about 1.1% for leasehold.

Which form suits you depends on the purpose of the purchase and the specific property.

How does the 49% foreign quota work for condos in Thailand

The quota limits freehold on condos. Under Section 19 bis of the Condominium Act B.E. 2522 (the 49% foreign freehold quota), foreigners together may hold freehold in units whose combined area does not exceed 49% of the saleable area of a registered condominium. Area is counted in square metres; common areas, parking and lobbies are excluded. The share is fixed when the condominium is registered under Section 6 of the Act.

Say the saleable area of a condominium is 10,000 m². Foreigners together may then hold freehold in units totalling up to 4,900 m²: a 35 m² studio takes 35 m² of that limit.

Myth 1: Foreigners cannot own property in Thailand at all

The myth grew out of a real restriction on land: a foreigner cannot get land in full ownership, but it can be registered as a long-term lease, leasehold. Condos and villa structures can be held both freehold and leasehold.

Myth 2: Buying a villa requires a Thai company

A Thai company is not needed to buy a villa. The structure is registered to the buyer freehold or leasehold, and the land is registered leasehold for 30 years at the Land Department.

Land can also be held through usufruct, a right to use another person's property set out in Sections 1417–1428 of the Civil and Commercial Code. It is established for up to 30 years or for life; if no term is stated, it is presumed to be for life. The right ends with the death of the holder, does not pass to heirs and does not turn into ownership.

A separate case is land owned by a Thai company. Such a structure is lawful if the company is real and carries on genuine business. A nominee company set up solely to hold the land and the villa is unlawful.

Myth 3: Leasehold is not a genuine form of holding property

The myth comes from the word "rent": leasehold really is set up as a long-term lease, which gives the impression that there is no holding at all. Leasehold is a full, legally documented form of holding property: the right is registered at the Land Department and lasts for the whole term of the lease. Legally, leasehold is a form of holding, and it is entirely lawful.

About Undersun Estate

If you are choosing a property in Phuket and want to know in advance which form of ownership is available for it, write to Undersun Estate. We are a real estate agency in Phuket and a co-founder of the Phuket Property Association: we will select options for your budget and purpose and explain the form of ownership for each. Message us on WhatsApp.