Thailand is the only country in Southeast Asia where foreigners are allowed to own real estate. This applies specifically to condominium units — a well-known fact. However, in practice, foreigners may also own a building without the land.
Those planning to purchase a condominium unit in the Thai quota or a villa should carefully consider the legal limitations and associated risks. Below is an overview of ownership structures — from minimal to higher risk.
1. Freehold condominium ownership
The buyer’s rights are protected under specific legislation — the Condominium Act — and a standard sale and purchase agreement.
Can you lose ownership?
Only by court order.
Important considerations:
- Condominium owners have not only rights but also obligations
- Maintenance and common area fees must be paid
- Contributions to a sinking fund (e.g., for major repairs) may be required
Tax considerations:
Purchasing multiple units or a portfolio of properties may lead to additional tax implications — especially if used for purposes other than personal residence.
2. Leasehold condominium ownership
Lease term:
Property leases in Thailand are limited to 30 years. The term “leasehold” is typically used for such agreements.
Tenant’s responsibilities:
A leaseholder is not responsible for the building as a co-owner but has full rights to use the unit and common areas.
Risks and limitations:
- Sale of leasehold rights, subleasing, major renovations, and inheritance must be clearly defined in the contract
- Otherwise, general lease law applies — meaning such actions require written consent from the landlord (developer)
Taxation:
Property tax, transfer fees, and income tax on subleasing differ significantly from freehold taxation.
Termination of lease:
If the tenant repeatedly violates the agreement, the landlord may terminate the lease — even if it has been fully paid. This is only possible through a court decision and with valid grounds.
What happens after 30 years?
This depends on:
- contract terms
- how payments were structured
- the developer’s policy
The only guaranteed term is the registered lease period of 30 years.
Conclusion
While leasehold may appear more accessible, it carries additional legal and tax risks compared to freehold ownership.
Understanding the structure of ownership in advance is essential for making a secure investment decision.
Author: Alexandra Agapitova.
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