Leasehold property ownership, also known as Secured Lease or Protected Lease, in Thailand is a type of property ownership where the lessee has the right to live in or use the property for a specific period of time.
Advantages
- Leasehold properties are relatively cheaper than freehold properties (7-10%).
- The lessee is not the sole person responsible for the maintenance or preservation of the property.
- Leasehold is registered with the local land department and is protected by law.
Disadvantages
- The lessee’s rights associated with leasehold have limitations under Thai law.
- Each subsequent renewal of the leasehold after 30 years is subject to the participation of the contracted owner.
- At each renewal, 1.1% (tax and stamp duty) is payable to the Land Department, as well as legal services in the amount of 50,000-60,000 THB.
- When the property is resold, the participation of the owner with whom the leaseholding agreement is made is also required.
- The contract and the right of possession terminate upon the lessee’s death, and its rights are not automatically transferable by inheritance.
In summary, leasehold property ownership in Thailand is a type of property ownership where the lessee has the right to live in or use the property for a specific period of time. Foreigners can own land in Thailand through a Thai company, and leasehold properties are relatively cheaper than freehold properties. However, the lessee’s rights associated with leasehold have limitations under Thai law, and the contract and the right of possession terminate upon the lessee’s death.
FAQ
What is leasehold ownership?
Leasehold ownership in Thailand is a long-term rental and personal right attached to the person. The leasehold period is usually for a maximum of 30 years.
What happens when leasehold expires?
When a leasehold expires in Thailand, the lessee loses the right to occupy the property. The owner of the property can do what they want, and the lessee has no ownership rights to the property. The contract and the right of possession terminate upon the lessee’s death, and its rights are not automatically transferable by inheritance. There may be a risk of not being entitled to compensation for land and buildings if the property is damaged by disaster or expropriated during the leasehold period.
Can a leasehold property be renewed?
Yes, a leasehold property can be renewed in Thailand. According to Thai law, the duration of a lease of immovable property cannot exceed 30 years, but the lease may be renewed upon expiration. The renewal period must not exceed 30 years from the time of renewal. However, any longer period than that can only be made by renewal of the lease upon expiration of the 30-year lease.
Can you sell a leasehold in Thailand?
Yes, a leasehold property can be sold in Thailand. When selling a leasehold property, the transfer process requires the presence of the seller, buyer, and owner of the Chanote at the land office. The lessee can sell the land and house to a Thai or foreign national before the leasehold term expires.