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Phuket property investment carries specific risks that foreign buyers must understand before committing to purchases.
While foreigners can legally own condos in Phuket with certain restrictions, land ownership remains prohibited, forcing buyers to navigate complex leasehold agreements or company structures that have become increasingly scrutinized by Thai authorities as of September 2025. Property prices in Phuket average around 114,000 baht per square meter for condos and 60,000-95,000 baht per square meter for villas, making it more affordable than central Bangkok but requiring careful consideration of ownership structures and exit strategies.
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Foreigners face significant legal restrictions in Phuket property ownership, with land purchase prohibited and condo ownership limited to 49% of building units.
While property prices remain competitive compared to Bangkok, complex ownership structures, leasehold risks, and market liquidity concerns require careful evaluation before investment.
| Investment Aspect | Risk Level | Key Considerations |
|---|---|---|
| Legal Ownership | High | No land ownership; condo quotas; leasehold uncertainties |
| Market Pricing | Medium | 114,000 baht/sqm condos; 60,000-95,000 baht/sqm villas |
| Rental Yields | Medium | 5-8% average; short-term rentals face regulatory risks |
| Financing Options | High | Limited foreign lending; up to 70% LTV with higher rates |
| Exit Strategy | Medium-High | Condo sales easier than leasehold; market liquidity varies |
| Maintenance Costs | Low-Medium | 480-960 baht/sqm annually for common fees |
| Market Resilience | Medium | Tourism-dependent; historical recovery strength |
Fact-checked and reviewed by our local expert
Attaya Suriyawonghae 🇹🇭
Real Estate Broker, Zest Real Estate
What are the current laws around foreign ownership of land and condos in Phuket?
Foreigners cannot directly own land in Phuket under Thai law as of September 2025.
Foreign nationals can legally own up to 49% of the units in any condominium building as freehold title holders, provided the building quotas are not exceeded. This means if a condo building has 100 units, only 49 can be sold to foreigners with full ownership rights.
For villas or houses, foreigners must use alternative ownership structures since land ownership is prohibited. The most common approach involves leasehold agreements, typically lasting 30 years with potential extensions, though recent legal changes have made automatic renewals less guaranteed.
Thai company ownership structures, where a Thai-majority company holds the property, have become increasingly risky due to stricter enforcement against nominee and sham arrangements in 2025. Authorities now scrutinize these structures more carefully, making this option less reliable than in previous years.
How much does it cost per square meter for condos and villas in Phuket compared to Bangkok or Chiang Mai?
Phuket property prices are generally more affordable than central Bangkok but higher than Chiang Mai as of September 2025.
| Location | Property Type | Price per Square Meter (Baht) |
|---|---|---|
| Phuket | Condos | ~114,000 |
| Phuket | Villas | 60,000-95,000 |
| Bangkok | Condos (Average) | 140,000-150,000 |
| Bangkok | Condos (Central) | 200,000-236,000 |
| Chiang Mai | Condos/Villas | Below Phuket levels |
What ownership structures do foreigners typically use to buy property in Phuket?
Foreigners use three main ownership structures when purchasing property in Phuket, each with distinct advantages and risks.
Foreign freehold condominiums represent the most straightforward option, allowing full ownership rights for up to 49% of units in any building. This structure provides the strongest legal protection and easiest resale process for foreign buyers.
Leasehold agreements are standard for villas and houses, typically offering 30-year terms with two potential extensions for a total possible duration of 90 years. However, recent legal changes mean extension renewals now require renegotiation rather than automatic approval, creating uncertainty for long-term planning.
Thai company ownership requires majority Thai ownership (51% minimum) and has become increasingly risky due to enhanced government scrutiny of nominee structures in 2025. This option now poses significant legal risks and should be approached with extreme caution.
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What are the average rental yields for short-term versus long-term rentals in Phuket?
Rental yields in Phuket vary significantly between short-term and long-term strategies, with regulatory enforcement affecting short-term options.
Short-term rentals through platforms like Airbnb can generate higher returns, with one-bedroom condos averaging 26,616 baht per month and luxury villas reaching nearly 180,000 baht monthly. However, enforcement against illegal daily rentals in condominiums has increased substantially in 2025.
Long-term rental yields typically range from 5-8% annually for well-managed properties, offering more stable returns with fewer regulatory risks. These yields vary based on location, property type, and seasonal demand fluctuations.
Short-term rentals potentially offer higher yields but come with increased variability due to tourism seasonality and stricter regulation enforcement. Property owners must verify legal compliance for short-term rental operations before pursuing this strategy.
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How has Phuket's real estate market performed over the past 10 years?
Phuket's real estate market has demonstrated resilience against global economic downturns while maintaining premium pricing throughout the past decade.
The market has shown steady demand, particularly in luxury and branded property segments, with strong recovery patterns following temporary downturns. Price growth has remained robust despite occasional setbacks linked to global economic shocks or tourism declines.
Foreign interest has sustained market stability, with international buyers continuing to view Phuket as an attractive investment destination. The market has historically rebounded quickly from challenges including the COVID-19 pandemic and global financial uncertainties.
Premium developments and well-located properties have maintained value better than secondary locations, highlighting the importance of location selection for long-term investment success in the Phuket property market.
What taxes and fees should foreign buyers expect when purchasing and selling property in Phuket?
Foreign property buyers in Phuket face several mandatory taxes and fees during both acquisition and sale processes.
| Fee Type | Rate | Application |
|---|---|---|
| Transfer Fee | 2% | Property purchase |
| Stamp Duty | 0.5% | When business tax doesn't apply |
| Business Tax | 3.3% | When applicable on purchase |
| Income Tax (Sale) | Variable | Based on property appraisal formulas |
| Business Tax (Sale) | 3.3% | If resale within 5 years |
| Agent Commission | 3-5% | Property sale |
| Legal Fees | Variable | Registration and documentation |
How reliable are property management services for foreign owners in Phuket?
Property management services in Phuket are generally stable and professional in established developments catering to foreign owners.
Larger, established developments typically offer reliable management services with experience handling absentee foreign ownership requirements. These services often include rent collection, maintenance coordination, and tenant management for investors living abroad.
Reliability can vary significantly with smaller or local operators, making reputational due diligence strongly recommended before selecting management companies. Foreign owners should verify management track records and seek references from other foreign property owners.
Professional management becomes essential for foreign owners planning to rent their properties, particularly for short-term rental compliance and maintenance oversight. Quality management can significantly impact rental yields and property condition over time.
What risks do foreigners face with leasehold agreements in Phuket?
Leasehold agreements in Phuket carry several significant risks that foreign buyers must carefully consider before purchase.
Standard lease terms are 30 years with possible two extensions, but recent court rulings mean automatic renewal promises are not legally enforceable. Extensions now require renegotiation, creating uncertainty about long-term property control.
Renewal uncertainty represents the primary risk, as property owners cannot guarantee lease extensions beyond the initial 30-year term. This affects both property value and inheritance planning for foreign buyers.
Additional risks include potential title issues, reduced resale liquidity compared to freehold properties, and restrictions on inheritance of leasehold interests. These factors can significantly impact exit strategies and long-term investment returns.
It's something we develop in our Thailand property pack.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Thailand versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.
How easy is it for foreigners to get financing for property in Phuket?
Foreign buyers face significant challenges securing financing for Phuket property purchases, with limited options and stricter terms than Thai nationals.
Some Thai banks offer mortgages to foreigners, but loan-to-value ratios typically cap at 70% with higher interest rates than domestic borrowers receive. Processing times are lengthy and approval requirements more stringent than in Bangkok markets.
Required documentation includes proof of income, residency status, and possibly business investment evidence, making the approval process complex and time-consuming. Banks may require additional collateral or guarantees from foreign applicants.
Many foreign buyers choose cash purchases to avoid financing complications, though this requires substantial upfront capital. Alternative financing through offshore lenders or developer financing programs may be available but typically comes with higher costs and more complex terms.
How resilient is Phuket's property market to global economic downturns?
Phuket's property market has historically demonstrated strong resilience to global economic shocks while maintaining recovery capacity.
The market has rebounded from downturns, pandemics, and tourism drops due to sustained luxury demand and foreign buyer interest. Strong international appeal has provided stability during global uncertainties.
However, short-term rental markets can face compression during tourism crises, affecting rental yields temporarily. Properties dependent on tourism revenue experience more volatility than long-term rental or owner-occupied units.
Luxury and branded developments have shown particular resilience, while secondary locations and lower-tier properties may experience more significant impacts during economic downturns. Market recovery has been historically strong once global conditions stabilize.
What are the annual maintenance costs for condos in Phuket compared to rental income?
Condominium maintenance costs in Phuket are generally manageable relative to rental income potential for well-located properties.
Annual common area fees average 40-80 baht per square meter per month, translating to approximately 480-960 baht per square meter annually. These fees cover building maintenance, security, common area utilities, and facility management.
For a typical 50-square-meter condo, annual maintenance costs range from 24,000-48,000 baht, which rental yields from 5-8% can typically offset. Well-located units with strong rental demand usually generate sufficient income to cover these expenses.
Profitability depends heavily on occupancy rates and rental strategy, with properties in prime locations or well-managed developments typically achieving better cost-to-income ratios. Additional maintenance costs may include unit-specific repairs and upgrades not covered by common fees.
What exit strategies do foreigners have for selling property quickly in Phuket?
Foreign sellers in Phuket have varying exit strategy options depending on ownership structure and market conditions.
- Freehold condo sales: Relatively straightforward process if pricing is competitive and marketing targets appropriate buyer segments
- International property brokers: Specialized agents familiar with foreign buyer requirements and legal processes
- Quick-sale pricing: Discounted pricing strategies for faster liquidation, typically 10-20% below market value
- Branded development networks: Properties in established developments often have better liquidity through management company networks
- Foreign buyer networks: Targeting other foreign investors already familiar with Thai property law and processes
Leasehold villas and company-held properties face reduced liquidity compared to freehold condos, often requiring longer sale periods and potentially deeper discounts. Market liquidity is highest in branded and well-managed developments with established foreign buyer interest.
It's something we develop in our Thailand property pack.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Phuket property investment for foreigners requires careful navigation of legal restrictions and market complexities, but opportunities exist for informed buyers.
Success depends on understanding ownership limitations, choosing appropriate structures, and maintaining realistic expectations about market liquidity and regulatory compliance.
Sources
- Thai Nexus - Can Foreigners Buy Property in Thailand
- Thai Residential - Foreign Freehold vs Leasehold Condos Phuket 2025
- Banyan Group - Can Foreigners Purchase Phuket Property
- Siam Legal - Buying Property in Thailand in 2025
- Themis Partner - Land Foreign Ownership Thailand Regulations 2025
- Phuket Insider - Property Registration Under Thai Legal Entity
- BambooRoutes - Buying Land Thailand Foreigner
- Phuket Realtor - Thailand Property Ownership
- RE/MAX - Thailand Market Report 2025 H1
- BambooRoutes - Average Condo Price Bangkok