99-Year Leasehold in Thailand: How the Reform Reshapes Investor ROI in 2026

Thirty years. That has been the maximum leasehold term for foreigners buying property in Thailand since 1925, when the Civil and Commercial Code was enacted. A full century later, the kingdom is preparing to triple that term. The shift to a 99-year leasehold is not a cosmetic tweak. It is a structural change that rewrites the economics of every transaction.

For international investors used to freehold models in Dubai or Europe, Thailand's 30-year cap has always been the market's biggest drawback. A short horizon forced buyers to price in rapid amortization, weakened bank valuations on collateral, and complicated resale on the secondary market. The reform addresses all three issues at once.

Quick Answer

• Thailand is preparing legislation to extend the maximum leasehold term from 30 to 99 years

• The change would align Thai law with the standards already used in Singapore, Hong Kong, and London, where 99-year leases are the norm

• At 99 years, the annual amortization rate of a leasehold's value drops from 3.3% to roughly 1%, sharply improving ROI calculations

• The reform is designed to attract long-term foreign capital and support economic activity in the property sector

• For condominium buyers holding leasehold units, asset value becomes comparable to freehold, especially over the first 30-40 years of ownership

• Market estimates suggest leasehold property values could rise 15-25% once the law passes

• Separately, officials are also debating raising the foreign condo ownership cap from 49% to 75%, alongside the leasehold extension

Key Facts

• Current law: Sections 537-571 of the Civil and Commercial Code cap property leases at 30 years, with renewal options that are not legally binding until a new contract is registered

• Foreigners cannot own land outright in Thailand. Purchase routes are limited to leasehold, condominium units within the freehold quota (up to 49% of a building's total area), or ownership through a Thai company

• Singapore, Hong Kong, and the United Kingdom all use 99-year leasehold as their baseline standard. In London, flats with fewer than 80 years remaining on the lease typically sell at a 10-30% discount to market value

• Average rental yields in Thailand's resort markets: 5-7% in Phuket, 4-6% in Koh Samui, and 4-5% in Bangkok, based on 2025-2026 market data. Separately, Origin Property and Park Luxury report Phuket rental returns of 7-10% annually, with potential capital appreciation of 15-20% a year as the island's residential market shifts from tourism-driven to investment-driven demand

• Under the current 30-year term, an investor effectively loses 3.33% of the leasehold's value every year. At 99 years, that figure falls to 1.01%, meaningfully boosting net returns

• The reform also affects commercial real estate, including hotels, retail space, and logistics facilities, where a longer lease horizon is critical to justify large capital outlays

• Thailand is competing for capital against Vietnam (50-year maximum leasehold for foreigners) and Indonesia (up to 80 years through combined rights structures)

• Foreign buyers remain a dominant force in Phuket's luxury villa segment, with an estimated 60% of transactions involving foreign purchasers, even as authorities tighten scrutiny of nominee ownership structures

FAQ

When will the 99-year leasehold law take effect in Thailand?

No exact date has been announced. The reform is still in the drafting stage. Reports indicate the government views this as part of a broader package of economic reforms, with passage expected sometime in 2026-2027, though timelines could shift.

Will the 99-year term apply to existing lease contracts?

Most likely not. New rules typically apply only to contracts signed after the law takes effect. Existing 30-year agreements will probably require renegotiation or a supplementary agreement with the landowner to benefit from the extended term.

How is a 99-year leasehold different from full freehold ownership?

Leasehold grants a right to use land, not ownership of it. When the term ends, the property reverts to the landowner. But over a 99-year horizon, the practical difference from freehold becomes minimal: the discounted value of the period beyond year 99 is less than 1% of the current price at a 5% discount rate.

How will the 99-year leasehold affect Thai property prices?

Expect leasehold properties, especially villas and land-based homes, to appreciate. The current price gap between leasehold and freehold, typically 20-40%, is expected to narrow to 5-15% once the reform passes.

Can a 99-year leasehold be inherited?

Yes. Leasehold rights in Thailand pass to heirs for the remaining term of the contract. With a 99-year term, heirs inherit an asset with substantial time remaining, making it considerably more attractive for family-oriented investors.

Do I need a Thai lawyer to register a leasehold?

Yes, essentially mandatory. Any lease term exceeding 3 years must be registered with the Land Department to be enforceable against third parties. An independent lawyer should review renewal rights, contract terms, and any encumbrances on the land.

What taxes apply to foreigners holding a leasehold in Thailand?

Registering a leasehold triggers a registration fee of 1% of the total lease value across the full term, plus a stamp duty of 0.1%. Annual Land and Building Tax runs 0.01-0.3% of assessed value, depending on how the property is used.

Should I wait for the law to pass, or buy now?

If a property is currently priced at a leasehold discount relative to freehold, buying now could be the better move, since prices are expected to rise once the reform is enacted. Structure the contract carefully so it can accommodate an extension to 99 years once the legislation changes.

The move toward a 99-year leasehold sends a clear signal: Thailand is serious about competing for international capital. For investors who have watched the Thai market from the sidelines, wary of its short ownership horizon, a window of opportunity is opening now. A sound strategy is to lock in current pricing before the market fully reprices around the reform.

Source: Bangkok Post

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