What exactly does leasehold mean?

A leasehold is a contractual right to use a specific plot of land for a designated period of time. For residential properties, a 30-year leasehold is commonly arranged. The contract may include terms for future extensions; however, this cannot be considered automatically guaranteed. It depends on the specific wording, current legislation, and the cooperation of the landowner. Thai Government Portal

For foreign buyers, a distinction is therefore made between:

• ownership of the villa itself,

• the long-term leasehold of the land beneath it.

The Thailand Board of Investment states that a foreign national may own a building on leased land. However, the documentation must precisely define who owns the structure and what rights are associated with it. Thailand Board of Investment

What should the agreement contain?

A high-quality leasehold agreement should primarily regulate:

• precise identification of the land and its owner,

• the duration of the lease and the rental rate,

• the exclusive right to use the land,

• ownership and use of the building,

• extension conditions,

• transfer of rights upon the sale of the villa,

• inheritance or succession of rights,

• the right to sublease or rent out the property,

• procedures for lease termination.

A long-term lease must be executed in writing and, depending on the nature of the agreement, must also be properly registered with the relevant land office. A private agreement or verbal promise is not sufficient.

What to verify before signing?

An independent legal counsel should verify:

1. the actual registered owner of the land,

2. ownership documents, boundaries, and total land area,

3. liens, disputes, and any other encumbrances,

4. legally secured access road,

5. the possibility of registering the leasehold,

6. terms of sale, inheritance, and termination of the contract,

7. ownership protection of the villa itself.

The lawyer should represent the buyer directly, not just the developer or the landowner.

Can the leasehold be extended?

The agreement may include terms for a subsequent period. However, future extensions generally require the cooperation of the landowner. It is therefore crucial to know who is responsible for securing them, under what conditions, and whether this obligation also binds the landowner's legal successors.

Be cautious of offers marketed as a "90-year leasehold". Typically, this is not a single, pre-guaranteed lease for 90 years, but rather an initial period with prospective extensions.

Is it possible to sell or inherit the villa?

Yes, provided that the legal documentation is correctly structured. The agreement should define whether the lease can be transferred to a new buyer, whether the landowner’s consent is required, and what happens in the event of the lessee's passing.

Unclear terms can later complicate the sale of the villa or its transfer to heirs. These matters should therefore be resolved during the initial purchase phase.

Beware of nominee structures

Some offers utilize a Thai company that formally owns the land. However, if its Thai shareholders are merely proxy owners acting on behalf of a foreigner, this may constitute an illegal nominee structure.

A transparent leasehold can therefore be a far cleaner and more secure approach than a purpose-built company created solely to bypass regulations.

How is the leasehold structured with Koh Samui Villas?

With Koh Samui Villas projects, you purchase the villa itself, while utilizing the land via a long-term leasehold. The agreement governs the exclusive use of the land, the rights to the building, and the lease terms.

A team with experience from over 75 villas sold on Koh Samui will guide you through the process. At the same time, we recommend having the specific documentation reviewed by your own independent legal counsel.

Are you interested in how the leasehold works for a specific villa? Arrange a Non-Binding Consultation and Go Through the Whole Process with Us Step by Step.

This article is for general informational purposes only and does not replace individual legal or tax advice.