Contrary to what one might think at first glance, the purchase of a “Leasehold” can present certain advantages over the purchase of a freehold property. ✅
The costs associated with the registration of a 30-year lease (1.1%) of the declared value of the property are also lower than the costs of transferring a freehold apartment.
Less obvious at first glance but not less interesting … the buyer in Leasehold is officially a tenant and not the owner of the property. For a person taxable with the ISF in France, the sale of one or more real estate properties in France to lower the value of its patrimony and to pass under the threshold of the ISF, and the purchase of one or more real estate properties in Leasehold in Thailand (which will not be counted as a patrimony since rented) can be a completely legal means of not paying the ISF.
To argue that the purchase in Leasehold has only advantages compared to the purchase in full ownership would not be exact either. The main disadvantage, if not the only one, of a purchase in Leasehold is that the investor will depend on the Thai person (physical or moral) owner of the property to endorse a “resale” or an inheritance of the right to the lease. If everything is contractually foreseen, the intervention (signature) of the owner of the property is required to change the tenant. This is a constraint, more than a risk, even if the risk of complication is not zero, especially in the case where the owner is a natural person. Indeed, if a company (legal entity) is necessarily committed by its contractual obligations and this even in the case of changes of shareholders, a natural person cannot contractually commit his descendants without their consent. Thus, in the event of the death of the owner who made contractual promises, the descendant is not necessarily bound to respect them.
Moral : in the case of a purchase in Leasehold, it is better to contract with a solid and stable legal entity (company), or with an individual whose descendants are identified and, ideally, co-signatories of the contract.
