What leasing land in Thailand costs.

The parts

Three costs, one of them recurring.

1. Rent

Negotiated per site. Usually annual, with a fixed step every three to five years. For an operator who builds, a rent-free first year against a written build commitment is a structure we use at Natai. Rent for these two sites is quoted to qualified parties after a first conversation.

2. Registration

Land Office fee of 1% of the total rent over the term, plus stamp duty of 0.1%. One-off, paid at registration. On a lease with total rent of THB 30 million over 30 years that is THB 330,000, typically shared.

3. Legal

Drafting the lease and superficies, title search, registration attendance. EUR 2,000–6,000 with an established Phuket or Bangkok firm for a straightforward lease; more for a hotel lease with financing provisions.

Taxes around the lease

Land and building tax

An annual tax on the land, low for agricultural and residential use and higher for commercial. Leases normally pass the tax for the leased area to the tenant.

Withholding tax

When a company pays rent to a company, 5% is withheld and paid to the Revenue Department as a credit against the landlord's tax. It changes cash flow, not cost.

VAT

Rent of immovable property is exempt from VAT in Thailand. Services bundled with it, such as management fees, are not.

Building permit and licences

Small government fees; the real cost is the architect and engineer, typically 6–10% of construction cost.

A worked example, illustrative only

A tenant leases a beachfront plot for 30 years at an annual rent of THB 1,000,000 with a 10% step every five years. Total rent over the term is about THB 36 million. Registration and stamp duty come to about THB 396,000, shared THB 198,000 each. Legal fees of around THB 150,000. The tenant then owns the villa or resort it builds through a registered superficies for the full 30 years. Annual outgoings beyond rent: land and building tax on the leased area and normal operating costs.

Compare that with a purchase, which is not available to a foreign buyer in any case, where tens of millions of baht per rai are tied up in a title the buyer cannot lawfully hold.

Thai land units, quickly

1 rai

1,600 m² · 0.395 acres · 0.16 hectares · 4 ngan · 400 square wa

1 ngan

400 m² · 100 square wa

1 square wa

4 m² (a wa is two metres)

Chanote (Nor Sor 4 Jor)

The full freehold title deed with a GPS-surveyed boundary. Both our sites are Chanote. Lesser documents (Nor Sor 3, Nor Sor 3 Gor, Sor Kor 1) are possessory rights, not full title, and cannot support a registered lease in the same way.

Superficies

A registered right to own buildings on someone else's land, Civil and Commercial Code sections 1410–1416.

Questions we are asked