Thai Condo Ownership: Vetted Strategy & Verified IRR

Last updated: 5 Jan 2026

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Foreign Ownership of Condominiums in Thailand

Foreign nationals are legally permitted to own condominium units in Thailand under the Condominium Act B.E. 2522 (as amended). However, foreign ownership is subject to specific legal conditions and limitations.

Key Requirements for Foreign Condominium Ownership

1.Ownership Limit-49% of Total Units

Foreigners can hold no more than 49% of the total unit space in a condominium building. The remaining 51% must be owned by Thai nationals or Thai companies.

2. Funds Must Be Transferred from Abroad (FET Form Required)

The purchase funds must be transferred from a foreign account and supported by a Foreign Exchange Transaction Form (FET) to verify the source of funds.

3. Confirmation from the Condominium Juristic Person

Before buying, confirm with the buildings juristic person that there is still available foreign quota for ownership.

️ Important Considerations

Foreign buyers should also be aware of the following legal restrictions:

1. Exceeding Foreign Quota: If the 49% foreign ownership limit is reached, foreigners may only purchase leasehold rights instead of freehold ownership.

2. Inheritance Restrictions: Ownership held by a foreigner cannot be directly inherited by another foreigner. Heirs must comply with Thai legal requirements.*

*You may read more in the legislation known as the Condominium Act B.E. 2522 (1979) and its relevant amendments.

Risk Considerations for Foreign Investors

1. Foreign quota full: If the 49% foreign ownership limit is reached, Freehold purchase is not possible; only Leasehold is available.

2. Legal disputes: Changes in condominium juristic person or lease contract terms may affect transfer or renewal.

3. Contract enforcement: Lease agreements over 3 years must be registered to be legally enforceable against third parties.

Sources: Thailand Property Law, Thailandlawonline, Samuiforsale-Legal Aspects of Buying & Owning Condominiums in Thailand

Comparison: Freehold vs. Leasehold Ownership in Thailand

Category	Freehold Ownership	Leasehold Ownership
Legal Definition	Full ownership of the condominium unit and shared land rights (within the 49% foreign quota).	Long-term lease of the property, granting the right to use but not ownership of the land.
Ownership Limit	Up to 49% of total saleable area in the condominium project (foreign quota).	No restriction on foreign ownership quota available when the 49% quota is full.
Tenure	Permanent ownership no expiration.	30 years maximum (renewable upon agreement).
Title Deed	Buyer's name appears on the Chanote (title deed) issued by the Land Department.	Buyer's name appears on the lease agreement, not on the land title deed.
Inheritance	Can be inherited by legal heirs (subject to Thai law).	Lease terminates upon expiration unless renewed; inheritance depends on contract terms.
Resale Value	Generally higher resale value and more attractive to investors.	Usually lower resale value due to time-limited rights.
Ownership Security	Strongest ownership right under Thai property law.	Less secure, dependent on lease terms and renewal conditions.
Ideal For	Long-term investors seeking capital appreciation and full ownership.	Foreigners seeking long-term stay or use rights when foreign quota is full.

Sources : Thailand Law Online, Benoit & Partners, Thailand Property Law, Addleshaw Goddard

Location & Project Considerations

Project stage: Completed vs under-construction affects rental yield and capital gain potential.
Occupancy and demand: Check average occupancy rates and market demand for rental units.
Condominium management quality: A reliable juristic person ensures timely maintenance and smooth management.

Evaluating Investment Returns: ROI vs IRR

Foreign investors should also consider potential financial returns when choosing between Freehold and Leasehold ownership. Two key metrics are commonly used: ROI (Return on Investment) and IRR (Internal Rate of Return).

1. ROI (Return on Investment)
ROI shows the total gain relative to the initial investment and is simple to calculate.

2. IRR (Internal Rate of Return)
IRR accounts for the time value of money and is useful for long-term investments.

ROI vs IRR: Freehold vs Leasehold (Example)

Feature / Metric	FH /Codo	LH /Codo (30 yrs)
Purchase Price (THB)	10,000,000	9,000,000
Annual Net Income (THB)	600,000	600,000
Expected Sale Price (Year 7)	15,000,000	12,500,000
Total Rental Income (7 Yrs)	4,200,000	4,200,000
Net Profit from Sale (THB)	5,000,000	3,500,000
Total Cash Profit (7 Yrs)	9,200,000	7,700,000
ROI (Simple Annual Yield)	6%	6.67%
IRR (Internal Rate of Return)	9.5%	10.5%
Ownership Rights	Freehold	Leasehold 30 Yrs
Resale Value	Higher	Lower
Risk	Stable, Easier to Sell	Dependent on Lease Renewal

DISCLAIMER: The figures provided are illustrative examples based on assumptions to demonstrate the concept. Actual results depend on deal-specific conditions and property management performance.

Executive Summary: Freehold vs. Leasehold Investment Strategy

The optimal tenure choice is a critical trade-off between maximizing the Rate of Return (IRR) and generating the highest Total Cash Profit.

Investment Choice: Match Your Goal

If your priority is Financial Leverage and Maximum IRR:

Choose Leasehold (LH). The lower initial capital outlay (e.g., 9 Million THB vs. 10 Million THB) drives the IRR to the highest rate, yielding approximately 10.5% over 7 years.

If your priority is Total Wealth Creation and Permanent Ownership:

Choose Freehold (FH). While the IRR is slightly lower (9.5%), the asset's higher long-term capital appreciation results in a greater Total Cash Profit realized upon exit (e.g., 9.2 Million THB total profit vs. 7.7 Million THB).

How Professional Investors Decide

They don’t ask: Is this project good? They ask:

• Is the exit predictable?

• Is liquidity defensible?

• Is downside protected?

If you’re evaluating Phuket property seriously,
you should review your position with a professional framework.

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Strategic Rationale: Why the 7-Year Horizon?

We use a 7-year timeframe for our analysis because it represents the optimal period for realizing profit in the Thai luxury property market:

Tax Efficiency: Exceeding the 5-year holding period is essential to qualify for the exemption of the Specific Business Tax (SBT), significantly protecting your net capital gain.
Exit Strategy Flexibility: The extra time provides a crucial window to strategically plan the sale, find the ideal buyer, and fully realize the highest possible capital appreciation without the urgency of a looming tax deadline.
Cost Amortization: It allows initial costs (furnishing, transfer fees) to be efficiently spread out, ensuring the final net return calculation accurately reflects the investment's long-term profitability.

Leasehold (Lease Renewal Risk)

Maximum 30-year lease under Thai law; automatic renewal clauses beyond 30 years may not be enforceable.
Investors should plan exit strategies if lease is not renewed.

Key Facts and Important Notes

When the foreign ownership quota (49%) in a condominium building is fully occupied, foreigners can only acquire the unit through a leasehold agreement instead of freehold ownership.
Although the 30+30+30 lease term (initial 30 years + 30-year renewal + 30-year renewal) is often advertised, under Thai Supreme Court rulings and Thai law, any automatic renewal clause beyond 30 years may not be legally enforceable.
Lease agreements exceeding 3 years must be registered with the Land Department to be legally binding and enforceable against third parties.

Estate Planning for Foreign Investors

Freehold ownership can be inherited, but heirs must meet eligibility under Section 19 of the Condominium Act.
For foreign heirs, consider trusts or Thai company structures to facilitate transfer.
Leasehold may have limited inheritance depending on contract; plan accordingly.

Continue Your Investment Analysis
The following resources support strategic investment decisions.

Freehold vs Leasehold: Luxury Thai Property Tax & Risk 2025

References

Condominium Act B.E. 2522, Department of Lands
Thailandlawonline.com Foreign Ownership of Condominiums in Thailand
Samuiforsale.com Legal Aspects of Buying & Owning Condominiums in Thailand
Benoit & Partners Freehold vs Leasehold Ownership in Thailand
Addleshaw Goddard Thailand Property Investment Guide for Foreigners
Investopedia Return on Investment (ROI) vs Internal Rate of Return (IRR): https://www.investopedia.com/terms/i/irr.asp
TIR Investment Reports, Angie Phuket Residences Internal analysis on rental yield and capital appreciation

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