Options for owning real estate in Thailand

There are two options in Thailand buy real estate - FRIHOLD and LEASEHOLD. As such, there is only one form of ownership in Thailand and Europeans cannot own anything, but they can own property.

Freehold (freehold) is an analog of private ownership adopted in Western countries. Freehold is a long-term lease for up to 90 years.

Leasehold - predominantly for investments

Buying real estate in leasehold is used when buying apartments as an investment by more 80% customers. The main reason for this is that the real estate in leasehold is usually lower by 5-10% compared to Freehold, which shortens the payback period. The second reason, the registration fee when registering leasehold is only 1% of the price, which is 2-3 times less than buying a property in Freehold. The third reason is also very valid, property on long term lease is tax free and does not require declaration. In addition, as a tenant, you have the right to resell the property at any time.

However, Lickhold has some disadvantages as well. Real estate rentals must be renewed three times every 30 years for a total of 90 years. Second, renewing your lease requires you to keep in constant contact with the landlord. Finally, as a tenant you cannot make a deal to sell the property or land yourself, you will have to approach the landlord. A registration fee of 1% and stamp duty of 0.1% must be paid when registering a transaction in Leasehold. The transaction is also registered with the local authorities. Depending on your needs and goals, you can choose the right form of real estate ownership in Thailand.

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Freehold is the equivalent of private property in Thailand

Freehold real estate purchases are made mainly to buy apartments or houses for themselves, but also for commercial or industrial projects.

The main advantage of freehold is the full disposition of the property. You can sell, gift and bequeath the property yourself. Also, you do not need to make any extensions and do not need to maintain constant communication with the previous owner.

Freehold property is declared and taxed. It has a higher registration fee than freehold - 2-3%. Also, a foreigner in Thailand has no right to own land. But even this can be circumvented by opening a legal entity to which to transfer the land. In fact, it will be in your full possession after that. But this also entails some nuances related to the management and maintenance of the Thai company, as well as additional costs. In addition to taxes, the owner will pay a registration fee of 2% of the appraised value of the property, stamp duty of -0.5%, withholding tax of 1% when acquiring the property.

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