Inheritance of leasehold property in Thailand becomes much more clearer after recent Supreme Court ruling

With its beautiful beaches, scenic mountains and bustling cities, Thailand has long enjoyed a reputation as a popular tourist destination. At the same time, the country has also become an attractive hotspot for foreign nationals wishing to buy property.

With a plethora of options – from convenient condominiums in downtown Bangkok, to lodges high up in the serene mountains of northern Thailand, to luxurious villas and flats situated idyllically beside the Andaman Sea – more and more foreigners are clamouring to either settle down in Thailand or invest in the growing property market.

But foreign investors face a well-known obstacle to making their dreams come true: the Thai Land Code forbids foreigners, whether individuals or companies, to buy or hold land, unless they obtain permission from certain government authorities, such as the Board of Investment or the Industrial Estate Authority of Thailand.

Despite these land ownership restrictions, the Condominium Act does permit foreigners to own units in condominium projects, provided such foreign ownership does not exceed 49 per cent of the total area of all the units in the project.

There are also no regulations prohibiting foreigners from leasing property. Therefore, leasehold is the most popular type of legal structure for foreigners who wish to own other types of real estate, such as a plot of land with a house or a villa.

Under Thai law, all leases for immovable property must be made in writing, and agreements exceeding three years must be registered with the Land Office where the property is located; otherwise, the agreement will only be enforceable for three years. Under the Civil and Commercial Code, the maximum duration for a lease of property is 30 years, with an option to renew for another 30 years. However, the option to renew is treated as a private agreement between the respective parties.