Real estate registration for a foreigner in Thailand - we understand the nuances

In Thailand, foreigners can buy real estate for long-term lease - Leasehold (90 years) or full property - Freehold.

It would seem that it is more profitable to issue a Freehold and own real estate forever. But not everything is so simple. Let's look at the nuances of these forms of ownership.

Form of ownership of real estate Leasehold (Leasehold) in Thailand.

Long-term leases have several advantages that have made them popular for investment projects:

The market price of real estate is lower than in Freehold by 5-10%, respectively, and the payback period is shorter.

Registration fee for registration of an object in Leasehold is 2-3 times lower and amounts to 1% of the cost;

An object in a long-term lease is not a property, therefore it is not subject to taxes and is not declared.

The Thai owner has no right to do anything with the object transferred to you for management. And he is obliged to make a deal with any other person to whom you indicate. That is, you can resell the apartment at any time.

Cons of Leasehold:

Renew the lease three times every 30 years - for a total of 90 years.

To complete this procedure, you need to constantly maintain contact with the owner.

You, as a tenant, will not be able to make a deal on your own to sell property or land. We'll have to contact the landlord.

The transaction is registered with the local authorities, and at the same time the lessee pays:

registration fee - 1%

stamp duty - 0.1%

Freehold real estate ownership in Thailand

This form of ownership is chosen when buying real estate for their use, construction of commercial or industrial facilities.

Freehold pros:

Full disposal of the property: you can donate, sell, bequeath on your own.

No additional renewals and no need to keep in touch with the previous owner.

Minuses:

Freehold is property that is declared and taxed.

Registration fee is higher than for Leasehold. Is 2-3%.

The most important thing is that a foreigner does not have the right to register ownership of land. But there is a way: to open a legal entity to which the land is transferred. In fact, it will be in full control of the foreigner.

The maintenance of a Thai company comes with additional costs, which we will consider in the paragraph on business ownership of property.

Taxes and fees paid by the owner:

registration fee - 2% of the appraised value of the object

stamp duty - 0.5% *

withholding tax - 1% *.

* - the percentage is always calculated from the estimated or contract value, take the one that is higher.

What to choose - Freehold or Leasehold when buying an apartment or a villa in Phuket - it's up to you.

Write or call us at InDreams Phuket - we will tell you all the nuances in your particular case and help you with the choice.