Buying an apartment or a villa in Phuket? The first decision you have to make concerns the form of ownership - and it is not purely formal. Freehold is full, perpetual ownership; leasehold is a long-term lease. Each of these options has different legal, financial and inheritance consequences. This article explains both forms step by step, compares them in a table and suggests what to choose depending on the type of property.
What freehold is - full ownership
Freehold is the form of ownership that corresponds most closely to what most people understand by "buying property". The buyer becomes the legal owner of the unit in perpetuity - with no time limits and no need to renew any agreement. The property is recorded in the Thai land registry in the buyer's name and is secured by a title called Chanote (Nor Sor 4) - the highest and best-protected form of land document in Thailand.
A foreigner may acquire an apartment on freehold under the Condominium Act. The rules, however, provide for an important restriction: in any building, a maximum of 49% of the total residential floor area may belong to foreigners. The remaining 51% is reserved for Thai buyers. In practice this means that the number of available freehold units in popular developments is limited - it is worth checking the remaining quota before placing a reservation.
Additionally, the law requires that the funds for buying a freehold apartment arrive from abroad in foreign currency. The bank then issues a document confirming the transfer (formerly the FET - Foreign Exchange Transaction), which is essential for registering ownership and for any later resale or repatriation of funds. For more on the legal conditions of purchase, see the guide: Can a foreigner buy property in Thailand?
What leasehold is - a lease
Leasehold is the right to use a property for a fixed period - standard 30 years - under a lease contract concluded with the owner of the land or building. Once the lease term expires, the right of use ends, unless the contract provides for renewal options.
For a foreigner, leasehold is most often the only legal way to use a villa or a house with land, because Thai law prohibits foreigners from owning land directly. Leasehold has no percentage limit - a foreigner can be the sole lessee of a property. The lease contract must be registered with the Land Department, which gives it legal force and protects the lessee throughout the term of the contract.
Many developments in Phuket - including villas in the south of the island, e.g. around Rawai - offer leasehold as the standard form of ownership for foreign buyers. A well-drafted leasehold contract, prepared by a local lawyer, can be a safe and functional alternative to freehold.
- Freehold - full, perpetual ownership; available to a foreigner in apartments (up to 49% of a building); Chanote title in the buyer's name.
- Leasehold - a 30-year lease (+ contractual renewal options); the standard solution for villas and land; no percentage limit for foreigners; rights depend on the contract wording.
- Both types can be bought legally as a foreigner - they differ in the scope and duration of the rights.
Comparison table: freehold vs leasehold in Thailand
| Feature | Freehold | Leasehold |
|---|---|---|
| Type of right | Full, perpetual ownership | A fixed-term lease (standard 30 years) |
| Typical property type | Apartments (condominium) | Villas, houses, land; some condo offers |
| Limit for foreigners | Max. 49% of floor area in a building | No percentage limit |
| Ownership document | Chanote (Nor Sor 4) in the buyer's name | Registered lease contract at the Land Department |
| Duration | Perpetual | 30 years; renewal requires contract provisions |
| Inheritance | Full - like any ownership | Depends on contract provisions; requires a clause |
| Resale | Simpler; the new buyer takes over freehold | Possible; the new lessee takes over the remaining term |
| Direct land ownership | No (condo - a share in the common areas) | No - a lease, not land ownership |
| Requirement for a transfer from abroad | Yes - for a freehold condo purchase | No such statutory requirement |
| Registration costs | Transfer fee of 2% of value | Registration fee of 1% of the lease value |
A detailed breakdown of conveyancing fees and taxes can be found in the guide: Costs and taxes of buying property in Thailand.
Inheriting property in Thailand
Inheritance after the owner's death works differently for each form of ownership.
Freehold
A freehold apartment is inherited just like any other asset - on the basis of a will or the statutory order of succession. The heir (including a foreigner) can be entered in the register as the new owner. The procedure does, however, require meeting Thai formal requirements and the presence of a lawyer.
Leasehold
The lease contract expires upon the death of the lessee, unless the contract contains an explicit clause on inheriting the lease rights (an assignment clause). The absence of such a provision means heirs may have no legal basis to continue the lease. Before signing a leasehold contract, be sure to check whether and in what form the lease right passes to heirs.
Resale and market liquidity
Freehold is generally a more liquid form of ownership on the secondary market. The new buyer takes over full ownership with no time limits, which is an argument in valuation and negotiation. The freehold secondary market in popular Phuket locations works smoothly.
Reselling leasehold is possible, but the new buyer takes over the remaining term of the contract - not a fresh 30 years. A unit with 18 years of lease remaining will be valued lower than the same unit with a freshly registered lease or a written renewal option. The crucial point is whether the contract allows assignment of the lease (transferring the rights to another person without the owner's consent or under simplified consent).
An overview of available properties - both freehold and leasehold - can be found on the page of Twins Real Estate listings.
A Thai company - a third path for villas and land
Besides freehold and leasehold, there is one more option used by some foreign investors buying villas with land: a Thai limited company (Thai Limited Company). The company is a legal entity that can own land - while the foreigner owns shares in the company.
This solution gives the buyer considerable control over the property and can make inheritance easier through the transfer of shares. It does, however, require careful preparation. Thai law requires the company to conduct genuine business activity, with at least 51% of the shares held by Thai nationals. Structures in which the Thai shareholders are mere figureheads with no real involvement ("shell companies") are illegal and expose the owner to serious legal consequences.
If you are considering this form, consultation with a licensed lawyer specialising in Thai property law is essential. Twins Real Estate helps to coordinate this path and recommends trusted legal partners - with no commission whatsoever from the buyer.
What to choose - apartment or villa, freehold or leasehold
In most cases the answer follows directly from the type of property.
- Apartment (condo) - choose freehold, if it is available in the given building. Freehold gives full ownership, simpler inheritance and better liquidity on resale. Leasehold in an apartment is an option when the 49% limit is exhausted or the freehold price significantly exceeds the leasehold one - in which case the calculation must take the investment horizon into account.
- Villa or house with land - leasehold or a company. Freehold of land is unavailable to a foreigner. A well-drafted leasehold contract is a safe and practical way to use a villa for many years. A Thai company is an alternative for those who want formal ownership of the land and are ready for the additional corporate obligations.
For more on how foreign investors approach the Thai market, read the main guide to property in Thailand.
What to watch out for in a leasehold contract
A leasehold contract is the document that will govern your rights for 30 years. Several matters deserve particular attention:
Renewal options
The standard lease term is 30 years - the maximum that can be registered at once with the Land Department. Many contracts include contractual clauses providing for the right to renew for another 30 years (or twice 30 years). Important: the right to renew arises from a civil contract, not from the registration itself - and so it is not automatically guaranteed by Thai public law. Check that the renewal option is precisely worded and on what terms it can be exercised.
Registration with the Land Department
A lease contract for a term longer than 3 years must be registered with the Land Department - without this it has no effect against third parties (e.g. a new owner of the land who has acquired it). Always demand confirmation of registration.
Inheritance and assignment clause
Make sure the contract expressly governs what happens to the lease upon the lessee's death, and whether and on what terms the lease may be transferred to another person (assignment). The absence of these provisions can complicate both inheritance and resale.
Provisions on renovation and use
Check whether the contract allows you to carry out renovations freely, to sublet the property, and whether and how it regulates operating fees and shared maintenance costs.
- The lease term and the precise renewal conditions.
- Confirmation of the contract's registration with the Land Department.
- A clause on the inheritance of lease rights by heirs.
- The ability to assign (transfer the lease to a new buyer on resale).
- Provisions on renovation, subletting and operating fees.
This article is informational in nature and presents the issues in general terms - it does not constitute legal or tax advice. Thai property law may change; consult a licensed lawyer before making a purchase decision. Last updated: 6 June 2026.