How can I become a homeowner in Thailand through leasehold ownership?
If you do not have a Thai spouse, Thai children, or other trusted Thai family or friends, you must carefully consider which land ownership method is best for you. Currently, the most common option is leasehold. In this scenario, a Thai citizen or Thai entity owns the land on which your physical house sits.
Upon purchasing the property at the land office, you and the land lessor will register a 30-year lease agreement on the back of the land title deed, or “Chanote” in Thai. This lease agreement is recognized by the Thai government as a guaranteed right and prevents the land lessor from interfering with your occupation of the land during the lease period.
In most cases, lease agreements allow for a total of 90 years of occupation. However, the Thai government only officially recognizes a 30-year lease period that can be registered at the land office.
This initial lease period is guaranteed by the government, and the land lessee cannot be denied access or occupation rights. The remaining 60 years (2×30 years) are contractual obligations in a legal agreement between the lessee and the Thai lessor. These subsequent 30-year terms are not officially recognized by the government until they are re-registered at the beginning of each term.
It is unlikely that most homeowners will own their properties for 30+ years; the average period of ownership is around 5 years. Therefore, it is likely that homeowners will sell their homes before the lease period expires. Here are three commonly asked questions regarding selling a home during the lease period:
- Will my property value decrease as the lease period comes to an end?
- Will the buyer of my house receive a brand new 30-year lease?
- Can I sell my home to a Thai buyer?
The answers to these questions depend on the structure of the original lease agreement. Therefore, it is essential to hire a trustworthy lawyer and real estate agent to ensure that your agreement is structured most beneficially. Ideally, the lease agreement should allow for the following:
- If the buyer is a foreigner, the lease agreement should permit a new foreign buyer to register a new 30-year lease (a non-rundown lease). This preserves the value of the property until the end of the lease period.
- The lease agreement should allow a Thai buyer to purchase the house and land freehold, which requires cancelation of the lease agreement and transfer of the land to the new owner (individual or Thai company).