Property Leasehold in Thailand. Leasehold is the most practical route for long-term occupancy, project development and foreign users of land in Thailand. The legal protections are good — but they depend on (a) choosing the right vehicle (registered lease vs short unregistered tenancy vs superficies), (b) careful drafting of contractual protections, and (c) rigorous Land Office registration and survey evidence. Below I explain the law you actually rely on, when registration matters, how long leases may run (and where exceptions exist), practical drafting mechanics, taxation/fees you must budget for, due-diligence steps, common traps, and recommended contractual language points.
Legal framework — the statutory backbone
Long-term leases of immovable property are governed by the Civil and Commercial Code (Sections 537–571). These sections define the lease as a contract granting use of immovable property, set out the lessee’s and lessor’s duties, and contain the default rules that fill gaps in the parties’ bargain. The Land Office is the public register and the authoritative place to inspect titles and encumbrances.
How long can a lease last — the 30-year rule (and exceptions)
Under the Civil and Commercial Code the statutory ceiling for ordinary immovable leases is 30 years; any longer contractual term will be reduced to 30 years by operation of law, and renewals (if made) cannot extend beyond 30 years measured from the renewal date. That hard cap is a cornerstone of Thai lease practice and shapes how long-term users plan exit, renewal and investment.
There is an important carve-out for special commercial/industrial leases: certain statutes allow commercial or industrial land leases to be structured for longer periods (in some cases up to 50 years) subject to specific statutory requirements and approvals. These are specialist structures and usually require regulatory steps and careful tax planning.
When registration is mandatory — why the 3-year line matters
A lease that exceeds three years must be registered at the local Land Office; if it is not registered, the law limits the enforceable period to three years. Registration converts a private agreement into a real right that binds third parties and gives the lessee priority against subsequent buyers and mortgagees. The registration charge is typically 1% of the total rent payable over the lease term, and stamp duty of 0.1% is commonly collected on the same base — expect a practical outlay of about 1.1% of total lease value at registration (the Land Office applies specific rules for what counts as “total rental”).
Foreigners: leasehold as the practical ownership route
Because Thai land law generally bars direct freehold ownership by foreigners (there are narrow statutory or treaty exceptions), long leases are the principal, legitimate method for foreigners to secure long-term possession and to put capital into buildings, resorts or factories. Structuring options commonly used together with a registered lease include (a) a registered long lease (30 years), (b) a right of superficies (to own the building/structure on someone else’s land), and (c) corporate structures where the landholder is a Thai-owned vehicle (used with caution). Each route has different registration, inheritance and tax consequences — plan with a Thai property lawyer early.
Practical drafting essentials — clauses that protect the lessee
A long lease is only as good as its drafting. Key clauses to insist on:
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Precise term, commencement and registration timing — state whether the term runs from registration or physical handover and require the lessor to register within a fixed number of days (with lessee remedies if they fail).
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Renewal option (not automatic) — set a binding renewal option, defined notice window and an objective formula for renewal rent (CPI/KPI or an agreed percentage formula). Remember: renewal is a new contract and must itself comply with the 30-year cap and registration rules.
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Assignment, sublease and mortgage consent — allow assignment/sublease with conditions (e.g., lessee may assign to an affiliate that meets prescribed financial tests); require landlord consent not to be unreasonably withheld only for specific commercial reasons.
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Improvements and ownership of fixtures — specify whether buildings/fixtures revert to the lessor on expiry or whether the lessee is entitled to compensation. If the lessee will invest materially, consider registering a superficies or an express buy-out formula.
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Registration and discharge of encumbrances — require the lessor to clear registered mortgages that impair title or to subordinate any lender to the lessee’s registered lease.
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Termination, cure and force-majeure — clear cure periods, determination calculations and limited liquidated damages so disputes don’t lead to instant forfeiture.
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Dispute resolution — arbitration for the merits (seat, rules) plus express carve-outs permitting interim relief from Thai courts (injunctions, preservation orders) — important for enforcement of landlord obligations at registration time.
Tax, fees and financial mechanics you must budget for
Beyond the Land Office registration fee (~1% + 0.1% stamp duty), practical costs include:
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Legal fees and surveyor costs (boundary verification).
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Local taxes (land and building tax, rental income tax obligations to the lessor).
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If a foreigner is funding the lease from overseas, be mindful of FX remittance documentation and the Bank of Thailand rules for bringing foreign currency into Thailand (required by banks when purchasing/placing large sums). The lessee should also consider escrow arrangements for security of deposits and construction payments.
(Exact figures and tax consequences depend on facts — run the numbers with tax counsel.)
Due diligence checklist (what to verify at the Land Office and on site)
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Certified Land Office extract & cadastral map — confirm deed type (Chanote vs NS3 etc.).
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Back-of-title encumbrance search — mortgages, registered leases, caveats or litigation notices.
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Boundary markers and licensed survey — reconcile “lak chet” posts with the cadastral plan.
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Vendor/lessor identity and chain of title — corporate documents, board resolutions, power of attorney checks.
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Zoning and permitted use — municipal planning, environmental or special-use permits.
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Tax compliance — ask for evidence of property-tax and income-tax filings for prior years.
Common pitfalls and practical mitigations
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Relying on verbal renewal promises — always take options in writing and register them.
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Failing to register a >3-year lease — produces legal uncertainty after three years.
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Assuming “30+30+30” is bulletproof — stacked renewal promises are commercially common but legally risky; better to combine a registered lease with a registered superficies or negotiated purchase right.
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Nominee schemes — avoid nominee ownership “solutions”; they carry significant enforcement and criminal risk.
Bottom line (practical recommendation)
For most long-term projects in Thailand the safe pattern is: (A) negotiate a registered 30-year lease with a clear, objective renewal option and landlord obligations to register promptly; (B) if you need to own the structures, add a registered superficies or an explicit compensation/buy-out regime; and (C) conduct full Land Office, survey and corporate due diligence and register the lease before funding major works. For commercial/industrial projects that require longer terms, explore statutory longer-term lease routes (special approvals) with specialist counsel.