Freehold or leasehold in Phuket
The difference between freehold and leasehold is not a line in a contract. It is a difference in your exit price. A leasehold unit takes longer to sell and sells for less, and that belongs in your numbers on the way in, not as a discovery five years later. Both are legitimate instruments. The only real mistake is paying freehold money for a leasehold asset.
What each one actually is
Freehold is full ownership. The Land Department register carries your name, with no expiry, it passes to your heirs, and you sell it without anyone else's consent. For a foreigner it is available on a condominium apartment, inside the 49% foreign quota of the building.
Leasehold is a registered long-term lease. The Land Department registers a term of up to 30 years. You pay close to what an owner pays, and you receive a right of use for a defined period.
Neither is better in the abstract. They are priced differently because they are different, and the whole exercise is making sure the price you are quoted reflects that.
Where the difference shows up in money
- Resale. There are fewer buyers for a leasehold, and every year that passes shortens the remaining term. A unit with 22 years left is worth less than the identical unit with 29 years left.
- Entry price. Within the same project, a leasehold unit is normally cheaper than a freehold one. If there is no price difference, you are paying the same money for a smaller bundle of rights.
- Inheritance. Freehold passes as ordinary property. A lease right passes within the remaining term and needs its own paperwork to be transferred properly.
- Financing and security. Thai banks lend to foreigners on a limited basis, and where that option exists it almost always concerns freehold. Lenders take leasehold as security reluctantly.
When leasehold is a perfectly sensible purchase
Hotel-branded projects run by an international operator are frequently sold in leasehold only. That is how the project itself is structured, with the operator holding the land and the building as one managed asset. Here leasehold is not a defect. It is the condition of entry into a property that does not exist in freehold at all.
The question then is whether the hotel programme earns back the difference. Sometimes it does. A managed unit in a strong location with real occupancy can repay the purchase inside 15 to 18 years and still leave a decade of term to sell. The arithmetic is the same arithmetic as anywhere else, and I run it the way I describe in how to calculate net rental yield in Phuket: realistic net returns are 6 to 8%, and in Bang Tao and Laguna 4 to 6% net against 7 to 9% gross, on 60 to 70% occupancy.
The second sensible case is when the freehold quota in a building is already taken and the building genuinely suits you on location and demand. Then you take the leasehold with your eyes open and with the price adjusted for it.
Could you compare the freehold and leasehold options in this project for me in actual numbers, including what it does to my exit price?.
Message me on WhatsApp →When leasehold is simply an overpayment
If the same project has freehold units at a comparable price and you are being steered to a leasehold because the view is better, do the comparison in money rather than in scenery. A view does not compensate for a 30-year ceiling on your title.
And separately, the marketing phrase 30 plus 30 plus 30. Only the first term is registered. The rest is the landlord's stated intention. It is not protected by an entry in the register and it does not automatically bind a future owner of the project or of the land. Treat the renewal as a possibility you have not paid for, and the whole question becomes calm again.
What it does to your exit
Resale in Phuket takes anywhere from several months to a year for a good unit in either form of ownership. Leasehold sits at the slower end of that range, and the pool of buyers is narrower because many of them are doing the same term arithmetic you are doing now. Agency commission on a resale runs 5 to 10%.
This is not a reason to avoid leasehold. It is a reason to buy it at a discount that matches the shorter horizon, and to know from day one roughly what your exit looks like. I go through the mechanics in selling property in Thailand.
What to ask the seller
- Is there free foreign freehold quota available on this specific unit
- What is the price difference between freehold and leasehold in this same project
- What term is registered under the contract, and what exactly does it say about renewal
- Who is the lessor under the contract: the developer, a separate legal entity or a third party
- What happens to the lease right if the project is sold or the landowner changes
One practical note on paperwork
Freehold and leasehold register differently, and the difference is worth knowing before transfer day. Freehold produces a chanote entry in your name, and you walk out of the Land Office holding a title document. Leasehold produces a registered lease endorsement against the landlord's title, and what you hold is the registered contract. Both are real. But only one of them is a document a future buyer's lawyer can read in ten seconds, and that shows up in how quickly the unit moves when you decide to sell.
Inheritance follows the same logic. A freehold apartment passes to your heirs as ordinary property. A lease right passes within its remaining term but needs its own paperwork, and it is worth having a Thai will in place either way. My partner lawyers handle that side, and it is covered in inheritance of Thai property and wills.
How I decide with a client
I start from what the money is for. If the purpose is a holding asset that will be sold on, I look for freehold quota first and I will move the client to another building to get it. If the purpose is income from a managed hotel unit in a location that only exists in leasehold, I will take the leasehold and price it on 30 years. Either way the decision is made on the exit number, and the legal review of the lease itself goes to my partner lawyers before any deposit.
Leasehold is a normal instrument used by a large share of the market, and a registered 30-year lease in Thailand is a solid, enforceable right. It is not a trap and it is not second best. It simply costs less than ownership, so it should be bought for less. Almost every unhappy leasehold story I have come across started with someone paying a freehold price for it and only learning the difference at resale. Get the discount right on the way in, and there is nothing left in this topic to worry about.
- Projects I work with — developments where I hold direct terms from the developer
- Investment property selection — net yield calculated on specific units
Legal, visa and tax work is not mine — it belongs to partners I use constantly
I am an investment strategist: I select the property, calculate the net return, check the developer and run the transaction. Anything that needs a legal, immigration or tax qualification goes to specialists I have worked with for years.
- Thai lawyers — document and contract review, land title, registration at the Land Office, wills, powers of attorney, corporate questions
- Visa partners — choosing and filing the right route for your situation: investment-based, LTR, Thailand Privilege, retirement, DTV
- Tax specialists — reporting in your country of tax residence, treaty credit for Thai tax, declarations on foreign assets
- Company formation in Thailand — when a structure is genuinely needed and lawful
- Rental management and concierge — letting the property, transfers, yachts, events
I introduce partners personally, matched to your actual question, so that you speak to the specialist who handles it rather than to a general inbox. Message me and I will make the introduction.
Frequently asked
Which is better, freehold or leasehold?
Can a leasehold be converted to freehold later?
What does 30 plus 30 years mean?
Lyubov Fortunova
Investment strategist and founder of Fortunova Capital Group. I have lived on Phuket for more than five years and run every deal myself: I select the property, calculate the net return, check the developer and hold the process together until the keys are handed over. Lawyers, visa and tax specialists come from my own circle.
“I count net, not dreams”
Could you compare the freehold and leasehold options in this project for me in actual numbers, including what it does to my exit price?
I answer personally, within the working day, in any time zone. No calls unless you want them. A question about the article is free and commits you to nothing.
