Glossary of terms: property in Thailand

Buying or considering buying property on Phuket? This glossary brings together in one place the most important legal, financial and transactional terms you will encounter during the purchase process. The definitions are based on Thai property law and market practice - and they help you tell facts from myths before you sign any document.

Forms of ownership

Freehold (full ownership)

Freehold is indefinite, full ownership of a unit - the equivalent of "outright ownership". A foreigner buying an apartment on a freehold basis becomes the legal owner registered in the Thai land register (Land Office), with the right to sell, rent out and bequeath it. This is possible only in buildings formally registered as a condominium, provided the 49% limit of floor area in foreign hands has not been exceeded. More on freehold and its conditions: Freehold and leasehold - the differences and the choice.

Leasehold (a long-term lease)

Leasehold is the right to use a property for a set period - a maximum of 30 years - on the basis of a registered lease agreement. The Thai Civil and Commercial Code limits this period absolutely to 30 years; any contract over 3 years must be registered at the Land Office to be effective against third parties. "Automatic 30+30+30 renewal" clauses are, under current Supreme Court case law, unenforceable as a property right - at most they can form the basis for a claim for damages against the owner. Leasehold is the typical form of use for a villa with land, since foreigners cannot own land. A comparison with freehold: Freehold vs leasehold - a guide.

Condominium

A condominium is a residential building formally registered under the Thai Condominium Act. Only such a building allows a foreigner to acquire a unit on a freehold basis. Not every apartment block in Thailand is a formally registered condominium - verifying the building's legal status is the first step of due diligence. Once registered, the building has a juristic person (community management) and assigns each unit a separate title of ownership (a Chanote for the unit).

Foreign quota (the 49% limit)

The foreign quota is the permissible percentage share of foreigners in the total usable floor area of a condominium building. Under the Condominium Act, a maximum of 49% of the floor area may belong to foreigners; at least 51% must be owned by Thai nationals. When the quota is already used up, a new foreign buyer can only enter on leasehold - a freehold purchase is blocked until one of the existing foreign owners sells their unit. Before placing a reservation, always ask for written confirmation of the available quota. General ownership rules for foreigners: Can a foreigner buy property in Thailand?.

Thai company and nominee

Historically, some foreigners bought houses with land through Thai companies with nominally Thai shareholders (nominee shareholders) who had no real interest in the company. The Thai Department of Lands and other authorities actively scrutinise such structures and may order a forced sale of the property and impose sanctions. Such arrangements are now considered risky and not recommended. The officially permissible alternatives are leasehold, superficies or the BOI route for large investments.

Titles and documents

Chanote (Nor Sor 4 Jor)

The Chanote (officially Nor Sor 4 Jor) is the highest and strongest form of land title in Thailand, analogous to a land register entry. It marks out the exact plot boundaries according to Land Department surveys and confers full ownership rights. When buying a freehold apartment, the buyer should receive their own Chanote issued for the condominium unit - with their name entered by the Land Office. The Chanote for the whole building (or the land beneath it) should also be a subject of verification at the due diligence stage.

FET / FETF (Foreign Exchange Transaction Form)

The FETF (formerly FET - Foreign Exchange Transaction Form) is a bank confirmation of a currency transaction, issued by a Thai bank at the moment funds arrive from abroad in a foreign currency and are exchanged into Thai baht (THB). The document is mandatory when registering a foreigner's freehold at the Land Office - without it the office may refuse to transfer the title. The FETF is also needed for a later resale of the unit and the transfer of funds back abroad. The details on the FETF must match the first and last name in the SPA and on the title deed. More on the process: How to buy property in Thailand.

Land Office / Department of Lands

The Land Office (Department of Lands) is the Thai registration authority where the official transfer of property title takes place. Every freehold sale transaction, the registration of a leasehold over 3 years, and the establishment of a mortgage require a visit to the Land Office. It is there that the transaction fees (transfer fee, withholding tax, turnover taxes) are calculated and collected, and the buyer receives an updated title of ownership.

Juristic person (community management)

The juristic person is the formal management body of a condominium community - the equivalent of a residential community's management. It is a legal entity responsible for administering the building, collecting fees, keeping the financial records and representing the community. It is the juristic person that issues the certificate of available foreign quota and manages the sinking fund and the common-area maintenance fees (CAM). The quality of the management directly affects the technical condition of the building and the value of the units.

Finances and fees

Sinking fund

The sinking fund is a one-off fee usually charged at purchase or on the first handover of the unit - it goes into the community's reserve fund and is earmarked for major repairs and the renewal of the building's common areas (e.g. lifts, roof, pool). The typical rate on Phuket is from 400 to 800 THB per m² of the unit. The sinking fund is not a monthly fee - it is a deposit paid once and managed by the juristic person. When buying, it is worth checking what level the fund is kept at and whether it is sufficient for the planned works on the building.

Common area fee / CAM

The common area fee (or CAM - Common Area Maintenance) is a monthly service fee to cover the costs of maintaining the common areas: the lobby, pool, security, gardens and gym. It is charged on the unit's floor area - on Phuket usually from 40 to 100 THB per m² per month. It is a fixed expense for the owner regardless of whether the unit is occupied or rented out. A rate that is too low may mean the management is not collecting enough funds and is neglecting the building.

Transfer fee

The transfer fee is a fee charged by the Land Office on the formal transfer of title - it amounts to 2% of the property's cadastral value (registered value). Traditionally, transfer costs are split equally between the seller and the buyer, although other arrangements can be agreed in negotiation. Besides the transfer fee, the Land Office also collects: withholding tax (a tax at source on the seller's side) and, depending on the holding period, specific business tax (3.3%) or stamp duty (0.5%). Altogether, the transaction costs usually amount to around 6-7% of the property's value. Details on costs: How to buy property in Thailand.

Land and Building Tax (annual property tax)

The Land and Building Tax is an annual tax on the value of property, in force in Thailand since 2020. For residential units that the owner occupies as their main place of residence, the rate is zero or very low (up to 0.02%). For property that is rented out or left empty the rate is higher - usually from 0.02% to 0.3% of the cadastral value per year. The tax is calculated and collected by the local authority (Tambon or municipality). With an investment purchase (rental) it is worth factoring this item into the ROI calculation.

Rental and investment programmes

Rental pool

A rental pool is a rental management model in which the owners of units in a given project combine their apartments into a single shared resource, run by a hotel operator or manager. Rental income is collected jointly and divided proportionally among the pool participants (e.g. by floor area or in equal parts), regardless of how many days a year a particular unit was rented. The system reduces fluctuations and simplifies things for the owner, but hands control over the calendar and the way the unit is managed to the operator. An overview of offers: Twins Real Estate listings.

Guaranteed return (a guaranteed rental return)

A guaranteed return (guaranteed rental) is a contractual commitment by the developer or operator to pay the owner a set percentage of the property's value per year (e.g. 5-7% for 3-5 years), regardless of actual occupancy. Such a programme is sometimes an element of the sales offer for investment apartments. The key questions before signing: who guarantees the payout (the developer or an external entity?), what happens after the guarantee period ends, and what are the conditions of availability of the unit for the owner? A guarantee is only as valuable as the financial credibility of the entity standing behind it. More on the investment market: property in Thailand.

The purchase process

Due diligence (legal review)

Due diligence is a comprehensive check of the legal and factual condition of a property before purchase. It covers: verifying the Chanote and any encumbrances at the Land Office (mortgages, claims, pledges), confirming the building's registration status as a condominium, checking the available foreign quota, assessing the financial situation of the community and the developer, and analysing the SPA and the rest of the contractual documentation. It should be carried out by an independent lawyer acting solely in the buyer's interest - not the developer's lawyer. A step-by-step guide: How to buy property in Thailand.

Reservation agreement

A reservation agreement is a preliminary contract concluded with the developer or seller, confirming the withdrawal of the unit from the market in the buyer's favour in exchange for a set deposit (usually a few tens of thousands of baht). It should contain clear terms for the return of the deposit - in particular if due diligence produces a negative result or the parties fail to reach agreement on the SPA. It does not transfer title - it is solely a way of securing the reservation.

SPA - Sales and Purchase Agreement

The SPA is the main sale agreement setting out the price, the payment schedule, the unit's finish standard (in the case of off-plan), the contractual penalties for delay on the part of the developer and the buyer, and the date and terms of the transfer of ownership. It should be drawn up or verified by an independent lawyer acting for the buyer. The buyer's details in the SPA must be identical to those on the bank transfers and on the eventual title - discrepancies can hamper registration at the Land Office and later financial operations.

Off-plan (the primary market under construction)

Off-plan means buying a unit in a development that is still under construction or in planning - on the basis of project documentation rather than a finished product. The typical advantages: a lower entry price and a possible increase in value by the time the development is completed. The typical risks: construction delays, a change in the finish standard relative to the brochure, and the developer's insolvency before completion. With off-plan it is especially important to check the developer's track record and credibility, and the buyer's funds should go into an escrow account with transparent release terms tied to construction stages. An overview of current projects: investment listings on Phuket.

The definitions above are general information on the terms used on the Thai property market and do not constitute legal or tax advice. The provisions of Thai property law may change; before making an investment decision, consult an independent lawyer licensed in Thailand. Last updated: 6 June 2026.