A villa is the name most commonly used for a house or home in Phuket. They are normally are part of a resort and usually bought as a holiday home, often with a rental or property management service. In Phuket, there are many sizes and styles of villas, from two-bedroom pool villas to large four to six-bedroom villas with private grounds and large infinity swimming pools. View Phuket villas for sale listings
The two most common forms of villa & land ownership are leasehold and freehold through acquisition by a Thai company.
Leasehold: A foreigner may register ownership of a 30 year lease with the Land Office. This may be a lease of a condominium or freehold land provided the title against which the lease is registered is freehold or “Nor Sor 3 Gor” which is a form of good quality title just below that of chanote.
Ownership of landed properties is more restricted as foreigners are prohibited to own freehold land. However, by this structure, a foreigner can effectively own land. There are no restrictions on foreigners owning a building out right. Therefore, the foreigner may own the building erected on the land over which they have a 30 year lease.
The maximum lease term allowed to be registered by law is 30 years. Most luxury resort villas are sold on a 90-year leasehold tenure, comprising a 30-year lease term with an option to renew for a further two terms. The villa is typically sold on freehold and the land component on a 90-year lease. The contractual right of lease renewal is between the developer or a special purpose company and individual buyers, therefore choosing projects backed by a reputable and financially stable developer is also essential to ensure the options to renew are granted at the end of each lease term as the renewed options cannot be registered against the land title.
This structure is transparent and is fully in accordance with Thai law. It is a commonly accepted tenure even for purchasing multi-million dollar top-end luxury resort villas and many reputable projects in Phuket adopt this. However, we recommend that buyers consider the quality of the contract and the contracting party who guarantees the further lease terms.
For added security for buyers, many luxury villas are sold on a leasehold structure with shareholding in the landholding company. Shareholding rights offer buyers a voting right in the landholding company to ensure that the rights of leasehold renewals are honoured. This is a substantially better proposition than just a contract with the developer.
With legal representation by law firms who are familiar with villa transactions, the process can be made much simpler for a buyer, whether this is under a straight lease or shareholding structure.
Freehold Ownership Through a Thai Company: The last type of ownership structure is freehold through acquisition by a Thai company. Whilst foreigners are prohibited to own freehold land, they are able to set up a Thai company with majority shareholding by a legitimate Thai partner i.e. 51% Thai owned and 49% Foreign owned. However, setting up a Thai holding company is a specialist area which requires legal input. The foreign party can be appointed to run the company and can through shareholders’ loans have additional financial control. This needs to be thoroughly understood and the comparative risks evaluated. What is certain is companies with obvious nominee structures risk investigation and loss of title.
Phuket villas located inland may start from below THB 10 million but luxury four-bedroom oceanfront villas will exceed THB 200 million, while exceptional villas can achieve over THB 300 million.