Quick answer: A foreigner may own a condominium unit freehold, registered in their own name at the Land Department, within the 49% of a building’s total floor area reserved for foreign owners. A foreigner may not own land under any structure, so a villa is a registered lease of up to 30 years per registration, or a properly constituted Thai company where land is genuinely involved. Freehold suits long holds and estate planning; a well-drafted lease is the correct structure for a villa, for a building that is out of quota, and for a buyer who has priced the decay honestly. Read the freehold vs leasehold Thailand guide and the 30-year lease explainer before signing anything.
What decays, and what does not
The comparison that decides most purchases is not the entry price but what the two positions look like in year fifteen.
A freehold condominium unit does not change. It transfers to your heirs under the Condominium Act, it can be sold to any qualified foreign buyer while capacity exists in the building, and its value tracks the building and the area rather than a clock. The costs of holding it are the common charge, the sinking fund and whatever the building’s reserve fails to cover.
A registered lease changes every year in one specific way: the remaining term shortens. A 30-year lease bought new and sold after eight years offers the next buyer twenty-two, and they will price it accordingly however well the property has been kept. The decay is gradual, it is real, and it is the single most under-modelled figure in Phuket villa purchases.
| Freehold condominium | Registered lease | |
|---|---|---|
| Duration | Indefinite | Up to 30 years per registration |
| Inheritance | Passes to heirs as an asset | Passes as a term of years, if drafted for it |
| Value over time | Tracks the market | Tracks the market, less the years used |
| Buyer pool at exit | Any qualified foreign buyer, quota permitting | Buyers willing to take the remaining term |
| Applies to | Units in registered condominiums | Villas, land, and quota-full condominium units |
The consequence is a different exit calculation. A freehold owner deciding when to sell is reading the market. A leasehold owner is reading the market and a clock at the same time, and the clock does not stop while they wait for a better price.
What Does Thai Law Allow Foreigners to Own?
Path 1, condominium freehold. A unit in a registered condominium may be held by a non-Thai in their own name, on the building’s title, provided foreign ownership across the building stays within 49% of its total floor area. The cap is measured in square metres rather than in units, and it is consumed as transfers register rather than as reservations are taken. Registration in a foreign name also requires the purchase money to have arrived from abroad in foreign currency and been converted on arrival, with the receiving Thai bank issuing the record the Land Office asks for.
Path 2, registered leasehold. For houses, villas and land, foreigners hold long-term leases registered against the title, for a maximum of 30 years per registration. The renewals marketed as “30 plus 30 plus 30” are contractual options written into the original agreement rather than registered rights, so their value depends on the counterparty performing decades from now.
What is not a path. Holding land through a Thai nominee is prohibited under Land Code Section 96, and a company formed to hold land on a foreigner’s behalf with no genuine Thai participation is an exposure rather than a structure. Where a company is lawful and appropriate, it is because land and a real business are involved, not because it gets around the rule.
How the quota decides which conversation you are having
Most buyers arrive expecting to choose between the two structures. In practice the choice is often made for them, by the building.
Foreign freehold in a Thai condominium is capped at 49% of the total floor area, with the remaining 51% reserved for Thai owners. Because the cap is measured by area, a building where foreign buyers took the larger units can be out of foreign capacity while a majority of units remain unsold. Capacity is consumed at registration, which matters most on an off-plan purchase completing two or three years out: other buyers register ahead of you, and the two-bedroom stock is where the room runs out first.
When that capacity is gone, the developer’s answer is a lease on the same unit, and it is usually presented as an equivalent product at a similar price. It is not equivalent, and it should not be at a similar price.
So the first question is not “freehold or leasehold” but “is freehold available here, in writing, for this unit”. Ask the juristic person rather than the sales office, ask for the figure in square metres and dated, and ask again shortly before transfer. What you do next depends entirely on that answer.
How Do Prices Differ Between Freehold and Leasehold?
Start from the fact that a lease is a diminishing asset and freehold is not. A newly registered 30-year term on a unit otherwise identical to a freehold one is worth less, and the gap should widen as the term runs down. A leasehold unit offered at a small discount to freehold is mispriced regardless of how good the building is.
The entry costs differ too, and in the lease’s favour: registration of a lease is commonly modelled around 1.1% of the lease value, against a 2% transfer fee on the appraised value for a freehold transfer, often split between the parties, the lines are set out in the leasehold fees guide. That saving at entry is small next to the decay, and it is the reason a lease can look cheap in the first year and expensive in the tenth.
Then look at what the drafting gives back. A lease with pre-paid renewals, an unconditional right to assign, clear succession provisions and remedies if the lessor entity changes hands is worth materially more than one that has none of those, at the same registered term. Those clauses are the difference between an asset you can sell and a position you are stuck in, and they are negotiable at the outset in a way they never are later.
Finally, set the term against your intended hold. A buyer planning fifteen years on a freshly registered lease is using half of it and selling the rest; a buyer planning thirty is planning to hand over an expiring interest, which is a different transaction entirely and should be priced as one from day one.
For villas the comparison is not freehold against leasehold at all, since foreign freehold on land does not exist: it is a well-drafted registered lease against the alternatives a lawyer will review.
Registration: what actually happens at the Land Office
The two structures produce different paperwork, and the difference is worth seeing before you choose.
A freehold purchase registers the transfer of the unit into your name on the building’s title. You leave with the unit registered to you, and where you are a non-resident the registration depends on the foreign-currency remittance record described above.
A lease registers an encumbrance against the title rather than transferring it. The land or unit continues to belong to the lessor, and your interest is recorded on the back of the deed for the registered term. That recording is what makes the lease binding on whoever owns the land next, and it is the whole of your protection: an unregistered lease is a contract with one company, enforceable against that company and nobody else.
Which is why the single most important verification on a leasehold purchase is not the contract you were shown but the annotation on the deed. Ask to see it after registration, and keep the copy.
What Does Leasehold Risk Actually Mean?
Developer or lessor insolvency. Land may transfer to creditors; a registered lease generally survives the transfer, but the renewals are promises made by a company that may no longer exist. Strong counterparties reduce the exposure; drafting that anticipates a change of landowner reduces it further.
Succession. A registered lease is a legal right, and whether it passes cleanly to your heirs depends on what the document says. Quality drafting at purchase is the mitigation, not a plan made later.
Resale narrowing. The buyer pool shrinks as the remaining term shortens, and the discount a buyer applies grows faster in the second half of the term than in the first, because they are purchasing a shrinking number of years.
Red flags in a leasehold offer
Freehold offers fail on quota; leasehold offers fail on drafting. These six most often turn a defensible lease into a bad one.
| Red flag | What it usually means | What to check |
|---|---|---|
| ”30 plus 30 plus 30” with no further detail | Only the first term is registrable | The years actually recorded at the Land Office |
| A renewal clause expressing intent | Nobody is obliged to do anything | Who must act, by when, and at what cost |
| Consent required to assign the lease | You cannot exit without permission | An unconditional right to transfer the term |
| Silence on the lessor being sold | The scenario that becomes the dispute | What survives a change of landowner |
| Structural repair left unallocated | It lands on you by default | An express allocation in the document |
| A leasehold price close to freehold | You are paying for years you do not get | Comparable freehold stock at the same size |
Insider tip: ask what the same unit costs freehold. If the answer is “only a little more”, the leasehold is mispriced, because what you are buying decays every year and the freehold does not.
When leasehold is the right answer anyway
Framed only as a weaker version of freehold, leasehold looks like a compromise nobody should accept. In practice it is the correct structure in three situations.
Where you want a house and a garden. Foreigners cannot hold freehold land in Thailand, so a villa is a lease or a genuine company, and no amount of preference changes that. The question is not whether to accept a lease but whether this particular lease is well drafted.
Where the building you want is out of foreign quota. A leasehold unit in the right building can be a better asset than a freehold unit in the wrong one, and buyers who insist on freehold sometimes end up with a weaker building because it was the one with capacity left.
Where the discount is real. Leasehold stock frequently prices below equivalent freehold, and if the gap is wide enough and the term long enough, the arithmetic can favour the lease over a defined holding period. That calculation needs the remaining term, the intended hold and the discount in front of you.
What does not justify a lease is being told the renewals make it equivalent to freehold. They do not, and a seller who says so is describing a contractual promise as if it were a registered right.
Buyer Scenarios: Who Should Choose Which Structure?
The buyer holding for heirs. Freehold, where quota allows, because it passes under the Condominium Act with a clear path. Where the asset is a villa, a lease drafted for succession and read by your own lawyer before the deposit.
The buyer with a defined medium hold and a real discount. A lease can win: on a long remaining term, with a discount wide enough to cover the years you will use, sold on with a term still attractive to the next buyer. Run the arithmetic on the remaining years, not the headline.
The buyer whose building is full. A registered lease on the unit you actually want, priced below freehold and drafted with an unconditional right to assign, or a different building with capacity, if the price offered ignores the decay.
The buyer being offered a company. Only where land and a genuine business are involved, and only after independent advice. A company formed to hold a condominium unit a foreigner could own directly is overhead without purpose.
Which Structure Should You Choose?
Start with what you are buying, because it decides most of it. A condominium unit can be freehold in your own name, subject to the quota. Anything involving land cannot be, at any price, for a foreign buyer.
Where both are genuinely available, three questions decide it. How long will you hold, because a lease loses value faster the further into the term you sell. Who buys it from you, because freehold sells to the whole foreign pool and a lease to a narrower one, and the discount you enjoyed on entry is the discount you grant on exit. And what happens to your heirs, because freehold passes cleanly and a lease passes on its own terms.
The mistake to avoid is choosing leasehold for the entry discount without pricing the exit discount. It is the same discount, and you pay it back.
What Should Your Lawyer Deliver Before You Wire?
On a freehold purchase: the unit’s title extract and encumbrance page obtained at the Land Department rather than supplied as a copy; the juristic person’s written confirmation of remaining foreign capacity in square metres, dated and naming your unit; confirmation that the receiving entity is the contracting entity; and the remittance route agreed with your bank so the foreign-currency record exists when registration is due.
On a lease: the lessor’s own title to the land, checked at the Land Office; the lease document with the registered term, the start date, the renewal mechanism and who must act on it; the assignment and succession clauses; the allocation of structural repair; and after registration, the annotation on the back of the deed, in copy.
On both: the building’s or estate’s accounts and reserve, the registered regulations and licensing position if letting is intended, and a written report you have actually read rather than filed.
How Do Resale Discounts Evolve as Lease Terms Shorten?
Slowly at first and then quickly. Early in a term a lease prices close to freehold, because the next buyer is purchasing nearly all of the same years. Past the midpoint the arithmetic changes: the buyer is now purchasing fewer years than have been used, financing is effectively unavailable on a short remaining term, and the pool of people willing to take an expiring interest narrows with every year.
Two things slow the decay. Renewal mechanics written into the original agreement as obligations on the lessor, with the cost, the timing and the party who must act named, are worth more than a clause expressing intent, and a buyer’s lawyer will read them. And a lessor with a track record of renewing without drama, because reputation is inventory, makes the promise more credible. Neither turns a lease into freehold, and both belong in the original document rather than in a side letter.
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Frequently Asked Questions
A condominium unit, yes, freehold in your own name, within the 49% of a building's total floor area reserved for foreign owners and registered at the Land Department. Land, no, under any structure: a house or villa means a registered lease of up to 30 years per registration, or a genuine Thai company where land and a real business are involved. Holding land through a nominee is prohibited under Land Code Section 96.
A registered lease is a real, recorded right, and thousands of foreign owners hold one without difficulty. What makes it safe or not is the drafting and the counterparty: whether the renewals are obligations or intentions, whether you can assign without consent, what survives a change of landowner, and who allocates structural repair. Its value also declines every year as the term shortens, so it has to be priced for that from the day you buy.
The registered interest ends and the property reverts to the landowner unless a renewal has been registered. The renewals marketed as 30 plus 30 plus 30 are contractual promises rather than registered rights, so what happens at expiry depends on whether the original agreement obliges the lessor to renew, on what terms, and whether that lessor still exists to perform.
Because freehold does not decay and a lease does. A newly registered 30-year term on an identical unit is worth less than the freehold, and the gap should widen as the years are used up. Where a leasehold unit is offered at only a small discount to freehold it is mispriced, and the right response is to ask what the same unit costs freehold.
Forty-nine per cent of a building's total floor area may be held by non-Thai owners. The cap is measured in square metres rather than by counting units, so the larger apartments consume it fastest, and it is taken when transfers register rather than when deposits are paid. Ask the juristic person for the remaining capacity in square metres, dated, before a deposit and again before transfer.
Not directly: a guest does not price the ownership structure, and a leasehold unit lets at the same rate as a freehold one in the same building. Where the structure shows up is in what you can sell at the end and to whom, and in whether the lease permits letting at all: some do not, so read the document before you model the income.
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Maksim Shchegolev
Founder, MORE Group
Founder of MORE Group. Four years in investment banking before moving to Phuket, where he has worked in the local property market since 2018. Oversees developer relationships and every engagement above $300K.
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