In Thailand, land ownership can take on two forms: freehold and leasehold. It is important to understand the differences between freehold title and leasehold when considering the purchase of land or real estate in Thailand, as these different types of ownership can have significant implications for the rights and obligations of the owner.
Freehold
Freehold ownership grants the holder full ownership rights over a piece of land. The owner has the right to use, sell, transfer, or otherwise dispose of the property as they see fit, subject to certain legal restrictions.
Foreigner may own a freehold land only through a Thai company. More details about setting up a Thai company can be found here.
Leasehold
Leasehold is ownership of land or real estate for a limited period of time, typically for a number of years. The owner has the right to use and occupy the property for the duration of the lease, but does not have full ownership rights. At the end of the lease period, the property typically reverts back to the owner or lessor.
Thai law protects a 30-year lease period, ensuring ownership cannot be disrupted. Buyers often offer an additional two 30-year terms, extending the total to 90 years.
To ensure a smooth purchase of a leasehold property, it is important to:
1. Get a copy of the lease agreement and clarify certain points. These include determining whether the lessor is an individual or a Thai company, as leases from the latter offer greater security.
2. Find out if the lessee has voting rights as some contracts may not allow this. This may cause issues during construction process.
3. Determine if the lease agreement includes a succession clause allowing for the inheritance of the lease.
