Freehold vs Leasehold: Luxury Thai Property Tax & Risk 2025

Last updated: 1 Nov 2025

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Invest Like a Pro: Deep Dive into Thai Condominium Law and Finance for Luxury Projects

Following our previous article, Foreign Ownership of Condominiums in Thailand, which explained the rights of foreign nationals under Thai law.
This article takes readers a step furtherto understand the Ownership Structure, "Legal Conditions," and Investment Trends in the luxury project segment, which is highly popular in the Thai real estate market, especially in Phuket.

In the world of luxury real estate investment, luxury comes with expectations of legal security and financial clarity. This information addresses frequent questions about foreign condo ownership rights in Thailand, referencing the Condominium Act and the stringent operational standards of top-tier market projects, serving as a risk management tool for all investors.

Part 1: Ownership Structure, Risk Management, and Overlooked Costs (LEGAL & RISK BASIS)

Condominiums in Thailand offer foreign buyers two primary forms of tenure: Freehold (Absolute Ownership) and Leasehold (Long-Term Lease Right).

Comparison Item	Freehold (Absolute Ownership)	Leasehold (Long-Term Lease Right)
Ownership Right	Permanent ownership (under the 49% foreign quota of aggregate unit space)	Long-term lease right up to 30 years (renewable)
Security	Highest. The buyer receives a Title Deed in their name.	Requires registration with the Land Department to be legally binding.
Resale Value	Higher. Highly desirable in the market.	Slightly lower (Value depreciates with the remaining lease term).

️ Caution: The Risks and Costs of the 30+30+30 Lease Renewal

The widely promoted 30+30+30 lease structure (three 30-year terms) is only a Civil Contract. The renewal for the 2nd and 3rd 30-year terms is not automatically guaranteed by Thai condominium law and requires a new agreement to be executed each time. This carries financial burdens that investors must anticipate:

Costs to be Paid When Making a New Agreement in Year 31:

1. Renewal Fee and New Registration (Renewal Fee & Registration):

Registration Fee: Calculated at 1.1% of the "Total Lease Rental Price" for that new 30-year term, payable to the Land Department.
Administrative Costs: Includes stamp duty and legal fees for drafting the new contract.

2. Developer/Lessor Fee (Option Fee):

This is an Option Fee paid to the landowner (Lessor) or the projects legal entity, as stipulated in the initial lease agreement.
The Real Risk: This fee is often calculated based on a formula referencing the "Market Value at the Time of Renewal" (e.g., 5% of the appraised market price in Year 31). If the property value significantly increases, this renewal fee could be many times higher than the initial principal paid. Thoroughly checking this formula in the initial contract is crucial for the Net Long-Term ROI.

Additional Facts Foreign Investors Must Not Overlook:

Quota Full: If the foreign quota (49%) is full, Leasehold becomes the only option for foreign buyers.
Inheritance: Freehold units can be inherited, but the foreign recipient must meet the qualifications specified under Section 19 of the Thai Condominium Act.

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Part 2: Hidden Costs: Taxes and Transfer Fees (Taxes & Hidden Fees)

The cost on the transfer date is a significant cash outlay that investors must prepare for, potentially reaching 5-7% of the purchase price.

Expense Item (Calculated on Appraisal/Sale Price, whichever is higher)	Freehold (Absolute Ownership)	Leasehold (Long-Term Lease Right)
Transfer/Registration Fee	2.0% of the Appraisal Price	1.1% of the Total Lease Rental Price
Withholding Tax (Corporate Income Withholding Tax)	1.0% of the Sale or Appraisal Price (whichever is higher)	(Typically borne by the Lessor)
Specific Business Tax (SBT)	3.3% of the Sale or Appraisal Price (whichever is higher)	(Usually not applicable for lease registration)
Total Approximate	6.3% (Often split between buyer/seller)	1.1%

Financial Warning (Hidden Costs): The 3.3% Specific Business Tax (SBT) is often calculated based on your Actual Sale Price (as it is usually higher than the appraised price). Investors should budget for the total transfer-day costs to be at least 3% of the actual sale price.

Part 3: Repatriation Planning and Standard Procedure (Risk Management & Timeline)

1. Repatriation of Funds and FET Form Planning

Risk Warning: If you lack evidence that the funds used for purchase were transferred from abroad, you may be unable to legally repatriate the sale proceeds when you eventually sell the property.
Crucial Document: Foreign buyers must transfer funds from abroad and present the Foreign Exchange Transaction Form (FET Form) or a Bank Confirmation Letter to the Land Department on the transfer date. Keep all FET Forms throughout the holding period.

2. Standard Registration Timeline (Benchmark Timeline)

For high-quality projects (e.g., Angsana Oceanview), the transfer process is precisely planned. Generally, registration and ownership transfer occur approximately 180 days after the full payment is made and the project has received its Condominium License and unit Title Deeds.

Part 4: Conclusion Invest Beyond Luxury with Accurate Knowledge

Investing in luxury Thai condominiums is not just about design or location; it is "The Art of Risk Management" based on law and financial transparency.

Understanding the ownership structure (Freehold / Leasehold), transfer costs, taxes, and the critical FET Form is the foundation that makes foreign investors Confident and Secure at every step.

Invest beyond luxury with knowledge that protects your assets.

Don't let legal risks destroy your returns! ️

Download our [FREE E-Book] 10-Point Legal Checklist: Condo Ownership & Lease Agreement Audit for Thai Investors to verify the transparency of any project you are interested in.

Part 5: Market Insight and Strategic Decisions (Market Insight & Strategy)
Investing in luxury real estate requires understanding market trends and ownership strategy, not just law and finance.

Data from the Knight Frank Thailand 2024 Report highlights key factors driving foreign investment decisions in the luxury market:

Legal Security is the most crucial factor in the buying decision (cited by over 60% of investors).
Branded Management Quality is the secondary factor that builds confidence in long-term value.

"Modern foreign investors look beyond location; they prioritize Legal Transparency and Brand Trustthese two factors are the heart of long-term investment in Thailand."

( Knight Frank Thailand, Phuket Luxury Condominium Market Insight 2024)

The Clear Trend: Investors seeking recreational rights or rental management under a brand (e.g., Banyan Tree, Angsana) often prefer Leasehold, which grants full resort amenity rights along with a more flexible tax structure.

You don't have to take the risk!

If you are ready to invest in a luxury project (e.g., Angsana Oceanview) and need an expert to confirm the remaining 49% Freehold quota or evaluate the Net ROI of Leasehold for your financial situation.

Request FREE TIR Investment Report & Consultation

We help you manage legal and financial risks before you sign.

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