Your search results

Freehold vs Leasehold

Posted by Admin_Zelleth on May 28, 2014
0

When considering the purchase of a condominium in Thailand, you have the option to buy either a freehold condominium or a leasehold condominium. Each option has its own advantages and disadvantages. Here’s a comparison to help you decide which might be better for your needs:

Freehold Condominium

Advantages:

  1. Ownership: You own the condominium unit outright, and your name is registered on the title deed.
  2. Transferability: You can sell or transfer ownership without any restrictions, making it easier to liquidate your investment.
  3. Inheritance: You can pass the property on to heirs without complications.
  4. Investment Value: Generally, freehold properties tend to appreciate more in value over time compared to leasehold properties.

Disadvantages:

  1. Cost: Freehold condominiums are typically more expensive than leasehold condominiums.
  2. Foreign Ownership Limit: Foreigners can only own up to 49% of the total unit space in a condominium building. This can sometimes limit the availability of freehold units for foreign buyers.

Leasehold Condominium

Advantages:

  1. Cost: Leasehold properties are usually less expensive than freehold properties, making them more accessible for buyers with limited budgets.
  2. Availability: There are no restrictions on the percentage of leasehold ownership by foreigners, potentially offering more options.

Disadvantages:

  1. Limited Ownership Term: The lease term is typically 30 years, with the possibility of renewal for additional 30-year terms, but this is not guaranteed. Renewals are subject to negotiation and the owner’s agreement.
  2. Transferability: Transferring a leasehold property can be more complicated, as it requires the landlord’s consent and may involve additional fees.
  3. Inheritance Issues: Leasehold properties cannot be easily passed on to heirs. The lease typically terminates upon the death of the lessee, unless otherwise specified in the lease agreement.
  4. Investment Value: Leasehold properties tend to appreciate less over time compared to freehold properties due to the diminishing lease term.

Key Considerations

  1. Purpose: Consider your purpose for buying. If it’s for long-term residence or investment, a freehold property might be more suitable. If it’s for short-term use or if budget is a concern, a leasehold property might be a better option.
  2. Legal Advice: Engage a reputable lawyer to review all contracts and ensure that your interests are protected, especially for leasehold agreements which can be more complex.
  3. Future Plans: Think about your long-term plans. If you intend to stay or keep the property for many years, freehold is generally more advantageous.
  4. Market Conditions: Research the market trends and the potential for property value appreciation in the area you’re considering.

Conclusion

Choosing between a freehold and leasehold condominium in Thailand depends on your financial situation, investment goals, and long-term plans. Freehold offers full ownership and generally better investment potential, but at a higher cost. Leasehold can be more affordable and offer flexibility, but with limitations on ownership duration and transferability. Carefully weigh these factors and seek professional advice to make the best decision for your circumstances.

  • Advanced Search

    More Search Options
    More Search Options

Compare Listings