Positives & Negatives of buying a leasehold property in Thailand.

Buying leasehold property in Thailand has its advantages and disadvantages, depending on your needs and long-term goals.

 

Pros of Leasehold Property in Thailand

1. Foreign Ownership Allowed

• Foreigners cannot own land in Thailand but can lease it for up to 30 years (with possible renewals), making leasehold a legal way to secure property rights.

2. Lower Initial Cost

• Leasehold properties are usually cheaper than freehold properties, making them more affordable for investors and expatriates.

3. Legal Simplicity

• The lease agreement is straightforward compared to complex ownership laws for foreigners. No need to set up a Thai company or marry a Thai citizen to own land.

4. Less Bureaucracy

• No need for approval from the Board of Investment (BOI) or adherence to strict foreign freehold quotas in condominiums.

5. Attractive for Short-Term Stays

• Ideal for those planning to stay in Thailand for a few decades but without long-term ownership concerns.

 

Cons of Leasehold Property in Thailand

1. Limited Lease Term

• Lease agreements are legally limited to 30 years, with optional renewals (but renewals are not always guaranteed). Some developers promise extensions, but they are not legally enforceable.

2. No Ownership Rights Over Land

• Unlike freehold, leasehold property does not provide permanent ownership, and rights may be lost if the landowner refuses to renew the lease after 30 years. 

3. Resale and Market Value Challenges

• Leasehold properties can be harder to resell because the remaining lease term decreases over time, reducing their attractiveness to buyers.

4. Inheritance Restrictions

• Leasehold rights do not automatically pass to heirs unless explicitly stated and accepted by the landowner.

5. Potential for Lease Disputes

• If the landowner goes bankrupt or sells the property, there is a risk of complications despite legal protections.

 

Should You Buy Leasehold in Thailand?

 

• If you want a long-term but not permanent stay, leasehold can be a practical and cost-effective choice.

• If you seek a long-term investment or inheritance for your heirs, freehold (condominiums) or legal alternatives (like setting up a company) may be better options.

If you’re looking for leasehold properties, please contact us and we can help find you your perfect investment.