Freehold vs leasehold for investors: control, resale, financing and succession

Freehold and leasehold are two different legal relationships to the same square metres, and for an investor the difference decides four practical things: control, resale, financing and succession. Freehold is registered ownership of the unit with no expiry; leasehold is a registered right to possess and use it for a fixed term of up to thirty years under section 540 of the Civil and Commercial Code.

This note takes the investor's view of that choice and links to, rather than repeats, our buyer's guide to freehold versus leasehold. It is general information about tenure, not legal, tax or investment advice; we do not project prices or returns, and past performance is not indicative of future results.

In brief

• Freehold is registered ownership with no expiry; leasehold is a registered right to use for up to thirty years (Civil and Commercial Code section 540).
• A foreigner may hold a condominium unit in freehold within the 49% quota (Condominium Act sections 19 and 19 bis); leasehold is often the only route where the quota is full or the asset is land.
• Freehold gives fuller control; a leaseholder's rights are bounded by the lease and the Code, and subletting or assignment usually needs the freeholder's consent (section 544).
• On resale, freehold transfers a fresh title; leasehold assigns only the remaining, shrinking term.
• A registered lease binds a buyer of the freehold for its registered term (section 569), but a renewal promise is personal and does not automatically bind a successor in title or the lessor's heirs.
• The Supreme Court (Decision No. 4655/2566) held a pre-agreed automatic '30 + 30 + 30' renewal void as circumventing the thirty-year cap.
• Freehold passes to heirs under Book VI of the Code (subject to the foreign-heir rule); a lease may end on the lessee's death unless the contract provides otherwise.

What is the legal difference between freehold and leasehold?

Freehold is ownership; leasehold is a lease. A foreigner may hold a condominium unit in freehold within the building's 49% foreign quota under sections 19 and 19 bis of the Condominium Act B.E. 2522 (1979), which places your name on the unit title deed at the Land Department with no expiry date. Leasehold is not ownership: it is a registered hire of the property under sections 537–571 of the Civil and Commercial Code, giving you the contractual right to possess and use the unit for its term while the freeholder keeps the title.

The term is the defining limit. Section 540 caps a lease of immovable property at thirty years; a lease written for longer is reduced to thirty, and a lease of more than three years must be registered against the title to be enforceable beyond three years (section 538). Where a project's foreign quota is full, or the tenure on offer is land rather than a condominium unit, leasehold is often the only route open to a foreign buyer.

How much control does each tenure actually give?

Freehold gives you the fuller set of an owner's rights; leasehold gives you what the lease and the Code allow. As a freehold owner you may sell at any time to any buyer the quota accommodates, mortgage the unit, let it out, alter it within the building's regulations, and leave it to your heirs. A leaseholder's rights are bounded by the lease document and by the Civil and Commercial Code — subletting or assigning the lease usually needs the freeholder's consent unless the contract allows it (section 544), and duties such as repair follow the Code's hire provisions rather than the ownership ones.

Neither tenure, by itself, gives any right to live in Thailand; ownership and immigration status are separate questions, covered in our note on whether a condominium confers residency.

How does each behave on resale?

Freehold is resold by transferring the title; leasehold is resold only by assigning what remains of the term. A freehold owner sells the unit itself, and the buyer takes a fresh, unexpired title. A leaseholder can transfer only the years still left on the lease, usually with the freeholder's consent, and the asset a buyer receives shrinks each year toward zero — a lease with eight years left is a different proposition from one with twenty-eight.

That time-decay, and the smaller pool of buyers willing to take on an expiring right, is the structural difference an investor weighs on exit. It is a feature of the tenure, not a prediction about the market.

Can you finance either one?

Financing is limited for both, and generally harder for leasehold. Thai commercial banks seldom extend a mortgage to a non-resident foreign individual to buy a condominium, freehold or leasehold; this is a matter of lending practice rather than a rule of law, and where finance is available at all it tends to be for freehold, because a depreciating lease is weaker security than a perpetual title.

Treat the availability and terms of any loan as something to confirm with a specific lender for your own circumstances, not to assume. We do not arrange finance and quote no rate or loan-to-value figure here, because those are set by the lender and change.

Why is a '30 + 30 + 30' lease not automatically renewable against successors?

Because section 540 caps the registrable term at thirty years, and a promise to renew binds only the person who gave it. Leasehold units are often marketed as '30 + 30 + 30' — a first thirty-year lease with two pre-agreed renewals — but in law the registrable term is thirty years; the further periods rest on renewal covenants in the contract. A registered lease does survive a sale of the freehold: under section 569 a transfer of ownership does not extinguish the lease, and the new owner steps into the lessor's rights and duties for the remaining registered term. That protection, however, covers the term actually registered — not a promise to grant a new lease later.

A renewal promise is a personal obligation of the freeholder who made it. It is not a registered property right, so it does not automatically run with the land to a successor in title, nor does it bind the freeholder's heirs; enforcing it decades later, against a new owner or an estate, is a litigation question rather than a formality. The Supreme Court underlined the limit in Decision No. 4655/2566, holding that a pre-agreed automatic renewal that replicates the original rent and terms is void as an attempt to circumvent the thirty-year cap in section 540. An investor is generally prudent to price a leasehold on the thirty years the law will register, and to treat any renewal as uncertain rather than assured.

What happens to each tenure on the owner's death?

Freehold passes to your heirs; a lease may not survive your death at all. A freehold unit forms part of your estate and devolves on your heirs under Book VI of the Civil and Commercial Code (sections 1599–1600), subject to the foreign-heir rule — a foreign heir must qualify to hold under section 19 of the Condominium Act, or notify the competent official within 60 days and dispose of the unit within one year under section 19 septem, as our note on inheriting a foreign-owned condo explains.

A lease is treated in Thai law as a personal right tied to the lessee, and Thai courts have held that it can end on the lessee's death unless the lease agreement expressly provides that it passes to the heirs. For a leasehold investor, heritability is therefore a drafting point to settle in the contract, not something the law supplies by default.

When does each tenure fit?

Each fits a different constraint, and the choice is usually set by the property before it is set by the investor. Freehold fits where the unit is a condominium and the building still has room within its 49% foreign quota: it offers a perpetual title, the widest resale market, whatever limited financing exists, and clean succession. Leasehold fits where freehold is simply not available — the quota is full, or the asset is land or a villa a foreigner cannot own outright — and where the investor accepts a defined, depreciating term in exchange for entry.

This article describes the two tenures; it does not recommend one. Which suits a particular purchase depends on facts we would look at with you — the building's quota position and the exact lease terms — under a separate engagement.

Continue reading

• Land and ownership structures — the lawful routes
• Freehold versus leasehold — the buyer's guide
• What happens to a foreign-owned Thai condo when the owner dies?
• Does buying a condominium give the right to live in Thailand?

Sources

• Civil and Commercial Code, sections 537–571 (hire of property), in particular sections 538, 540, 544 and 569 (checked 2026-07-25)
• Supreme Court (Dika) Decision No. 4655/2566 on pre-agreed lease renewals (checked 2026-07-25)
• Condominium Act B.E. 2522 (1979), as amended by the Condominium Act (No. 4) B.E. 2551 (2008), sections 19, 19 bis and 19 septem (checked 2026-07-25)
• Civil and Commercial Code, Book VI (Succession), sections 1599–1600 (checked 2026-07-25)
• Analysis: succession to a property lease in Thailand (the lease as a personal right on the lessee's death) (checked 2026-07-25)