Freehold vs Leasehold in Thailand

And these two words raise the most questions.

Can a foreigner buy a villa? Which is safer? Is it true that Leasehold is just a rental? And should you be afraid of this form of ownership?

There are many myths, outdated information and marketing promises around this topic. But the legal side of a deal matters far more than glossy presentations.

What can a foreigner actually buy in Thailand?

Let’s start with the most common misconception. You often hear that foreigners cannot own property in Thailand. That is not quite true.

The law does prohibit foreign nationals from owning land directly. But that does not mean buying property is impossible.

Foreigners can buy condominium units, apartments and villas. The difference lies in which form of ownership applies to a particular property.

That is why it is important to understand Freehold and Leasehold. Both are legal and widely used on the Thai property market.

What is Freehold?

Imagine you have bought an apartment. It belongs to you entirely. You can live in it, rent it out, sell it, give it to your children or leave it as an inheritance. And in 30 years nobody will tell you: “The term has expired, you need to renew.”

That is how Freehold works — full ownership with no time limit. Once the deal is registered, the apartment is put in your name at Thailand’s Land Department and you become its full owner.

But there is an important nuance

For foreigners, Freehold is available only when buying a condominium unit. And the 49% rule applies here.

This means that no more than 49% of the floor area in one condominium may belong to foreign nationals. The remaining 51% must be owned by Thai citizens or Thai legal entities.

What does this mean in practice?

If you are considering an apartment in a popular project, the first thing to check is whether any foreign quota is still available. If it has already been used up, you will not be able to register the apartment as Freehold, and you will usually be offered Leasehold.

That is why we always recommend checking the quota before paying a deposit, not after.

Why do many people choose Freehold?

Because it is ownership without a time limit. Such a property can be passed on by inheritance, and when resold it is usually more in demand among foreign buyers.

What are the registration costs?

When buying Freehold property, government fees and taxes are paid:

• transfer fee — 2% of the property’s appraised value, usually split with the buyer;
• stamp duty — 0.5%;
• annual municipal property tax — from 0.02% to 0.1% depending on the property’s value.

For comparison, the upfront costs of registering Leasehold are usually about half as much. But what matters is not only the registration cost but which form of ownership suits your goal. We will cover this in the next section.

What is Leasehold?

When buyers first hear the word Leasehold, many immediately think of an ordinary rental. But that is not quite right.

Leasehold is a registered long-term right to use a property for a term of 30 years. During this period you get practically all the rights an owner has.

You can:

• live in the property;
• rent it out;
• resell your rights;
• pass them on by inheritance within the term of the agreement.

In other words, you effectively have full control over the property for the entire Leasehold term.

Why does Leasehold exist?

The reason lies in Thai law. Foreigners can own condominium units as Freehold but cannot own land.

That is why Leasehold has become an official legal instrument that allows foreigners to buy villas, residences and other properties built on land.

So for the Phuket market, Leasehold is not an exception or a compromise but standard practice.

Is 30 years a long time or not?

This is one of the most frequent questions. Formally, the term is indeed limited. But if you look at how most buyers behave, the picture is different.

The average investment cycle is 5–10 years. Over that time investors lock in their profit, sell the property or reinvest their capital.

If the property is bought to live in, a 30-year horizon also fully covers the needs of most families.

That is why in practice the Leasehold term rarely becomes a limiting factor.

Registration costs

Another advantage of Leasehold is lower purchase costs.

The buyer pays:

• registration fee — 1% of the property’s value, often split in half;
• stamp duty — 0.1%.

On average registration costs about 1.1%, almost half as much as buying Freehold property.

In addition, there is no annual municipal property tax on Leasehold, since legally it is not ownership.

Why is Leasehold cheaper?

As a rule, a comparable property on Leasehold costs 10–30% less than on Freehold. The difference reflects the limited term of ownership and is part of market pricing.

There is a simple rule we use when analysing properties. If the difference between Freehold and Leasehold is less than 10%, it is worth studying the terms of the deal carefully or discussing the price with the seller. The buyer should receive fair compensation for the limitations of the Leasehold term.

Leasehold in itself is no less legal or less reliable as a form of ownership. It is an official instrument that has been used on the Thai property market for decades and suits many properties, especially villas.

However, in 2025 an event changed the market’s approach to one important question — renewing Leasehold.

That is why we will now look at the decision of Thailand’s Supreme Court and explain what has changed for buyers in practice.

The 2025 court decision

One of the most important legal developments of recent years. If you are considering buying property on Leasehold, this section is really worth reading to the end.

In 2025 Thailand’s Supreme Court issued a decision that became a benchmark for the whole market. It did not change the law, but it gave a clear interpretation of how Leasehold agreements and their renewal should be understood today.

That is why professional market participants have already adjusted how they handle such deals.

What has changed?

For a long time the market used the formula “30 + 30 + 30 years”.

Many buyers came away with the impression that this meant a guaranteed right to the property for 90 years.

However, the Supreme Court confirmed otherwise. The case concerned a buyer who had paid for Leasehold for 90 years at once, with the agreement providing for two renewals after the first 30 years.

The court’s position was unambiguous. The state registers and guarantees only the first Leasehold term — 30 years. Any subsequent renewals do not arise automatically, even if they are provided for in the agreement between the parties. This was the key conclusion of the ruling.

What does this mean for the buyer?

First of all, this decision should not be seen as a rejection of Leasehold. The instrument itself remains fully legal and continues to be widely used on the Thai property market.

Just as before, the first 30 years:

• are registered by the state;
• are protected by law;
• allow you to freely use the property, rent it out, pass it on by inheritance and transfer your rights.

Only the approach to renewal has changed.

Today the correct way to put it is: the first 30 years are guaranteed by law, and any further renewal depends on the terms of the agreement and the landowner.

Villas

So far we have talked about apartments. With villas the situation is a little different, and this is where buyers have the most questions.

The most common one is: can a foreigner buy a villa in Thailand? The answer is yes. But it is important to understand how such a deal is structured legally.

A villa is not a single asset

Legally, a villa consists of two separate parts:

• the building (the house);
• the plot of land on which it stands.

That is why the form of ownership of the house and of the land can differ.

Option 1. House on Freehold, land on Leasehold

This is the most common structure for buying villas in Phuket.

In this case the house is registered as Freehold, i.e. full ownership, and the land under a Leasehold agreement. This structure complies with Thai law and is widely used by major developers.

Option 2. House and land on Leasehold

In some projects both the house and the land are registered under a Leasehold agreement. This is most common in resort complexes with a single management company, where it is important to keep a single management format for the whole site.

For the owner this has practically no effect on how the property is used: you can live in the house, rent it out, pass your rights on by inheritance or sell them within the term of the agreement.

Can a villa be registered entirely as Freehold?

If the buyer is a foreign national — no.

The reason is simple: Thai law prohibits foreigners from owning land directly.

So if you are offered the whole villa on Freehold, it is important to look carefully at the legal mechanism being proposed.

Grey schemes

So far we have talked about fully legal forms of property ownership in Thailand. But there is one more topic that cannot be ignored — the so-called grey schemes.

They are often presented as a way to “get around the restrictions” and register land in a foreigner’s name. At first glance this may seem an attractive solution. But in practice it is exactly these schemes that are now under close scrutiny by the Thai authorities.

Let’s look at what this is about.

By law, a foreign national cannot register land in Thailand in their own name. That is why for many years the market used a scheme involving the registration of a Thai company.

It worked like this. A company was set up in which 51% of the shares belonged to a Thai citizen and 49% to the foreign buyer. Formally such a company was considered Thai and could buy land. In reality, the foreign buyer fully controlled the property.

For many years this practice was fairly common. So many people came to believe it was a normal and safe way to buy a villa.

But in recent years the state’s approach has started to change. The Thai authorities have significantly tightened control over companies set up solely to own property. Today they check not only the documents but also whether the company conducts real business, who makes the decisions and whether the Thai shareholders are genuinely full owners of the business.

That is why in the summer of 2026 a high-profile investigation in Chonburi province drew the attention of the whole country. According to investigators, a group of foreign nationals used companies with nominee Thai shareholders to register land.

The scale of the investigation was telling. Investigators checked around 775 houses and almost 500 companies, and the total value of the properties exceeded 5 billion baht. For the property market this was an important signal.

This is not about foreigners being banned from buying property. It is about the state responding much more harshly to attempts to circumvent the law.

That is why today a professional approach means not looking for workarounds but using the mechanisms the law expressly provides.

Buyers’ mistakes

We have looked in detail at the forms of ownership that exist in Thailand and how they work. But in practice problems arise not because someone chose Freehold or Leasehold. Almost always the cause is the same — mistakes made before the contract is signed. And, interestingly, most of them are repeated from deal to deal.

Let’s go through the ones we see most often.

Mistake one — paying a deposit first and checking the documents later

This is one of the most common situations. A buyer likes a project, makes an emotional decision and pays a reservation fee. Only afterwards does it turn out that the foreign Freehold quota has already run out. Instead of the form of ownership the client was counting on, they are offered Leasehold or a different property altogether. Sometimes the deposit can be refunded. Sometimes only partially.

It all depends on the terms of the particular developer. That is why the first thing we recommend before any payment is to get official confirmation that foreign quota is available. It takes very little time but helps avoid very unpleasant situations.

Mistake two — treating “30+30+30” as a guarantee

It is directly related to what we discussed in the previous section.

After the Supreme Court decision, many still treat the “30+30+30” structure as a legal guarantee. In fact it is not. Today only the first registered Leasehold term of 30 years is guaranteed. Any further renewals depend on the terms of the agreement and the landowner. So when buying, it is important to assess not only the property itself. It is just as important to understand who owns the land, how reliable the developer is and what reputation it has on the market. These factors become part of investment security.

Mistake three — trying to save on legal support

Buyers often reason like this: “The project is large and the developer is well known, so no additional check is needed.” But property is always a legal transaction. An independent check usually costs 15,000–25,000 baht. For most properties that is less than 1% of the purchase price. And it is the lawyer who checks the title, the contract, restrictions, the form of ownership and possible risks.

That is why we always tell clients: saving on a lawyer is one of the most expensive savings when buying property abroad.

Mistake four — not settling the question of inheritance

When someone buys property, it seems a long way off. But these are exactly the questions best settled when the deal is registered. Especially with Leasehold. If inheritance rights are set out in the agreement from the start, the transfer of rights is much simpler. If you deal with it later, amending the contract can cost 50,000–100,000 baht. So we recommend providing for such things right away, while the deal is being registered.

Mistake five — not assessing the remaining Leasehold term

Leasehold is a right of use for a fixed term. This means that the time remaining until the end of the agreement directly affects the property’s value when it is resold.

For example, a property with 28 years of Leasehold left and one with 8 years left are two completely different assets in terms of liquidity. If you are buying property with a view to resale, this factor must be taken into account at the stage of choosing the property.

Conclusion

So we have looked not just at legal terms but at the foundation on which any property deal in Thailand is built.

You now understand how Freehold differs from Leasehold, how villas are registered, why it is important to pay attention to the deal structure, what changes have taken place in the law and which mistakes buyers make most often.

The main thing to say in conclusion: there is no universally right form of ownership. There is the form of ownership that suits your goals. For some, Freehold will be the best solution. For others, a properly structured Leasehold.