When you are looking for a new property in Thailand, you will certainly come across terms like ‘leasehold’ and ‘freehold.’ The first-time buyers, in particular, are not aware that leasehold and freehold titles can influence their property purchase. So it is extremely important to determine and understand the difference between leasehold and freehold tenures. Visit here
In the past many years, expats in Thailand have faced issues relating to the ownership of their property. Part of these issues has been the abuse of power by the private developers. This is when the investors aren’t aware of the titles under which the property is bought. In this post, we will discuss the main differences between foreign freehold and leasehold ownership in Thailand.
For a more detailed view on Foreign Freehold vs. Leasehold Ownership in Thailand, visit https://www.thailandflat.com/.
Freehold Ownership
Freehold ownership, in simple words, is when you are buying a property in Thailand, which is a freehold title, you will require forming a company. The purchase comes with full ownership of the property; that is, the company you formed will hold the title to the property, and you will be the director of the company. That means you will have the complete ownership of the property. However, there is a catch! The only exception to the above is where the investor has invested the money in companies, securities, or stocks, and has BOI (Board of Investment) approval. In the case of BOI, the foreign investor may be permitted to hold a freehold title not surpassing the area of 1600 square meters. Moreover, a part of the investor’s responsibility is the upkeep of the property and shoulder the cost of repairs when required. These duties are bound to the investors unless he/she decides to transfer the property on his/her own violation.
Leasehold Ownership
Leasehold ownership is if you are buying a property, which is leasehold title, then you will be getting the property for a 30-year lease. However, depending on the developer or the owner, the contract can be extended to 60 years. However, there is no automatic right to renewal; the success will depend upon careful drafting of the property clause regarding the intention to renew. But the renewal periods afterward the preliminary period must not exceed 30 years. Hence, at the time of leasing a property, it is advised to have a lawyer standing by so that he/she can advise you on the renewal clauses. On the other hand, foreigners are limited to the ownership of 49% of the condominium units, whereas the rest 51% is for the Thai nationals.
Foreign nationals interested in acquiring Thai real estate can complete their transaction through freehold or leasehold. However, according to Thai law, they can have up to 49% ownership of the condo. That is, if the condominium has 100 units, foreigners can have up to 49 units. The rest 51 units will be sold to Thai nationals.
Image Sources:
https://www.lovemoney.com/news/11446/my-leasehold-property-nightmare-freehold-difference-costs
http://greenhouse.ae/freehold-property/
