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Freehold vs Leasehold Ownership in Phuket, Thailand


Property ownership regulations in Phuket, Thailand, allowed foreigners to own certain types of property, but there are restrictions and specific rules to follow. The rules and regulations might change, so it’s essential to consult with a local lawyer or official authorities for the most up-to-date information. 

However, foreign buyers can generally acquire properties through two main types of ownership structures:

Freehold Ownership

Foreign individuals can own properties in Phuket under freehold ownership. This means that you will have full ownership rights over the property, just like a Thai citizen. You can use, sell, lease, or bequeath the property to your heirs. Freehold ownership provides the highest level of control and security over the property.


Condominiums

Foreigners can purchase freehold condominium units in their name, as long as the total foreign ownership in the condominium building does not exceed 49% of the total floor area. The remaining 51% must be owned by Thai nationals. 

To purchase a condominium in Thailand under a Freehold Ownership structure, foreigners need to transfer money from abroad in foreign currency. This requirement is stipulated in the Thai Condominium Act. The purpose of this regulation is to ensure that foreign buyers are bringing foreign funds into the country for the purchase and not using money that is already within Thailand.

The foreign buyer must provide evidence of the funds transfer in foreign currency, usually in the form of a Foreign Exchange Transaction Form (FETF) issued by a Thai bank. This document confirms that the funds used for the condominium purchase were transferred from overseas.


Villas and Houses

Foreigners are generally not allowed to own land in Thailand outright. However, they can own the building or villa built on the land as foreign freehold. There are different legal structures, such as long-term leasehold arrangements, that can provide a way for foreigners to secure their interest in the property.

There also has another way that foreigners could own the villa or house or land in freehold by using the option of setting up a Thai company with Thai majority shareholders to purchase land in Phuket. The company then owns the land or property, and the foreigner has control over the company. However, this method has some legal and financial complexities, and it’s crucial to seek professional legal advice before pursuing this route.


Leasehold Ownership

In some cases, foreigners may opt for leasehold ownership, especially for properties like land, where freehold ownership is restricted. Under a leasehold agreement, you have the right to use the property for a specified period, which is usually 30 years. Leasehold ownership may be renewable or come with an option to extend the lease.

It’s important to note that while freehold ownership is generally straightforward, the acquisition of leasehold properties requires careful attention to the terms and conditions of the lease agreement. It’s advisable to seek legal advice and consult with a reputable real estate agent who specializes in foreign property ownership in Thailand to ensure you fully understand the terms and implications of the lease.

Keep in mind that real estate laws and regulations can change over time, so it’s essential to verify this information with updated and reliable sources. If you’re considering leasehold ownership in Thailand, consult with a local legal professional to ensure you are well-informed and compliant with the current regulations.

Overall, the type of ownership you obtain depends on the property you are interested in and the specific regulations in place at the time of purchase. Working with a qualified legal professional and a reputable real estate agent will help you navigate the process and ensure compliance with all relevant laws and regulations.

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