Learn the Difference Between Freehold and Leasehold Condos

Many people are eager to invest in a condo for sale in Pattaya, whether they envision living a leisurely beach lifestyle or want to add income property to their investment portfolios. 

However, before these potential homeowners invest in the condos they’ve chosen, they should understand the difference between leasehold and freehold purchase arrangements and thoroughly understand the different laws that apply to each, as these laws could impact their decision to buy. 

Foreign Ownership of Condos

Buying a condo under freehold terms is the only way a foreigner can legally own property in Thailand. The Condominium Act B.E. 2522 (1979) states that under the act's special status, foreign freehold ownership of up to 49% of condo units and common property co-ownership is allowed.  

Before getting too interested in a condo complex, it's always a good idea to ensure that it has met the quota allowing foreign investment.

Differences in Leasehold and Freehold

The differences between leasehold and freehold condos are comparable to those of buying and leasing a car. Only with a freehold purchase can an investor truly own the property. However, a leasehold arrangement can guarantee occupancy and certain other rights for a certain number of years that may be advantageous for the leaseholder. We’ll explain the benefits of both types of arrangements.

Benefits of Freehold Purchases

Freehold purchases allow owners the greatest freedom to change the property, decide on rules within the condo complex, and realize additional income from the condo. The benefits include:

Making Your Own Repairs

When you make a freehold purchase, you become responsible for the upkeep and repairs to your condo, the same as you would be for a free-standing home. 

Voting Rights in the Condo Complex

When you purchase a freehold condo, you join a community of other owners in the condo complex. You'll have voting rights that govern the way the condo complex is managed and maintained. 

Property Transfer and Sale

A freehold condo becomes part of your investments. It’s transferable to family members or anyone of your choosing at any time. You can also sell your condo at any time and set any detailed conditions for the sale. 

Limit on Required Fees

As a property owner, you won't be required to pay the maintenance fees that some neighbors will have to pay under their leasehold arrangement. Your condo maintenance will be handled independently, and common area maintenance issues will be voted on.  

Benefits of a Leasehold Arrangement

The key thing to remember is that a leasehold arrangement is not the same as a rental agreement. The leasehold is a long-term arrangement that grants certain privileges to the occupant in exchange for long-term occupancy and a guaranteed income for the property owner. Benefits to the leaseholder include:

Ability to Re-rent the Property

As a long-term leaseholder, you are responsible for the property and generally can re-rent it when it's unoccupied. 

Low Transfer Fees When Selling Your Leasehold

As a leaseholder, you enjoy some of the same rights as a property owner, such as selling your leasehold. The transfer fees of selling a leasehold are only 1% of the remaining lease value. 

Control Over Changes to the Property

The leasehold can be negotiated before the fact. There can be some ability to make some changes to the property without incurring fines or penalties written into the terms of the leasehold. 

May Be Preferable for Single People

A leasehold arrangement that has terms satisfying both the property owner and the leaseholder may be the ideal arrangement for single leaseholders who don't have family members to pass the property onto. When the number of years of the leasehold has been reached, the leaseholder can simply walk away or negotiate a new deal.   

Contact Pearl Property Pattaya

There are many available condos in Pattaya under both freehold and leasehold arrangements. However, with the number of properties available, finding the perfect property for your lifestyle requires the experienced help of a local real estate company. 

Pearl Property Pattaya has been in business for over eight years. Our talented team of real estate agents can listen to your requirements and needs to find the right home for you among the thousands of properties offered for sale in Pattaya.