As of 2026, our analysts are tracking a rising volume of ownership disputes involving residential villas in Phuket. Based on our estimates, at least 30-35% of villa transactions completed by foreign buyers in the Bang Tao, Layan, and Kamala corridors contain structural defects that create a material risk of losing operational control over the asset, or losing the asset entirely. The five anonymised cases below are drawn from our analytical monitoring work.
Thai law prohibits foreigners from holding land directly (Land Code, Section 86). A villa without secure land tenure has no stable economic foundation. Ownership structure is therefore not a procedural formality - it is the primary investment risk. Errors at this stage carry a price tag ranging from several hundred thousand to several million baht.
Quick answer
- Foreigners cannot hold Thai land directly; every villa investment requires an intermediate legal structure
- The two main compliant structures are a registered leasehold (30+30+30 years) and a Thai Co., Ltd. with genuinely capitalised Thai shareholders
- Nominee shareholder arrangements, in which Thai individuals hold shares without contributing real capital, are illegal under the amended Land Code and are subject to audit by the Department of Business Development (DBD)
- Based on our 2026 estimates, correcting a defective villa ownership structure in the Kamala-Surin zone costs between 350,000 and 800,000 THB
- On Koh Samui (Bophut, Maenam), the predominant risk involves villas sited on Nor Sor 3 Gor land rather than full Chanote title
- Registering a leasehold at the Land Office takes 3-6 weeks and costs 1.1% of total contract value
Options and scenarios
Case 1 - Nominee company structure in Rawai, cost of error: 2.1 million THB
A European buyer acquired a villa valued at 12.5 million THB in Rawai in 2023. The developer incorporated a Thai Co., Ltd. in which the foreigner held 49% and two Thai 'co-investors' each held 25.5%. The Thai shareholders had contributed no capital, conducted no business activity, and were unreachable by phone.
In 2025, the DBD audited the company. Investigators identified nominee shareholders on the basis of zero capital contributions and a blank tax history. The company now faces deregistration, which would extinguish its right to hold the land. The cost of restructuring - replacing nominees with genuinely capitalised Thai shareholders, legal fees, and a fresh DBD audit - came to 2.1 million THB.
Warning signals that were present: no evidence of capital payment by Thai shareholders, no operational activity, shareholders uncontactable.
What we would have recommended instead: pre-registration verification of each shareholder's identity and financial capacity, or selection of a 30+30+30 leasehold structure that does not require Thai co-investors.
Case 2 - Leasehold not registered at the Land Office, Kamala
A buyer acquired a villa in Kamala for 18 million THB under a 30-year leasehold. The agreement was drafted by the developer's own lawyer and signed in the presence of a notary. The critical omission: the leasehold was never registered at the Land Office (Krom Thi Din). Without registration, a lease exceeding three years is unenforceable against third parties (Civil and Commercial Code, Section 538).
When the developer sold the land to a third party in 2025, the new owner declined to recognise the leasehold. The buyer faced two options: litigation (estimated cost 800,000 to 1,200,000 THB, duration 2-4 years) or renegotiating the lease with the new landowner for an additional 3.5 million THB.
Warning signals: no registration confirmation (Sor Tor 1) from the Land Office; a lawyer acting exclusively for the developer.
What we would have recommended instead: an independent buyer's lawyer present at Land Office registration, and verification of the land registry entry before releasing final payment.
Case 3 - Usufruct with no succession provision, Surin
A buyer acquired a villa in the Surin area for 22 million THB using a usufruct (right of use) registered in their personal name. Under Thai law, a usufruct terminates automatically on the death of the holder (Civil and Commercial Code, Section 1418). No Thai will was drafted and no succession mechanism was put in place.
Following the investor's sudden death in 2025, overseas heirs discovered the usufruct had expired automatically. The villa, valued at approximately 24 million THB at the time, reverted to the landowner without compensation. Probate proceedings in Thailand remain ongoing as of mid-2026.
Cost of the error: the full investment value of 22 million THB, plus heir-side legal costs estimated at 600,000 THB.
What we would have recommended instead: a registered leasehold rather than a usufruct (leaseholds are heritable by assignment), a Thai will drafted concurrently with the purchase, and a life insurance policy sized to cover the asset value.
Case 4 - Nor Sor 3 Gor title instead of Chanote, Bophut, Koh Samui
A buyer purchased a villa in Bophut, Koh Samui, for 9.8 million THB. The land carried a Nor Sor 3 Gor title rather than a Chanote. The developer assured the buyer that upgrade to Chanote was 'in progress'. Two years later the title had not been upgraded. In 2026, an adjoining landowner filed a boundary claim, citing the survey discrepancies that are characteristic of Nor Sor 3 Gor land.
Legal defence and re-survey costs: 450,000 THB. The estimated market value of the villa has declined by 15-20% due to title uncertainty.
Warning signals: any title other than Chanote; verbal promises of conversion with no written timeline or contractual guarantee.
What we would have recommended instead: purchase restricted to land with Chanote title, or a contractual clause requiring a full price refund if conversion is not completed within 12 months.
Case 5 - Dual leasehold with conflicting clauses, Layan
A buyer acquired a villa in Layan for 28 million THB under a 30+30+30 leasehold structure. The lease contained an option-to-renew clause, but the developer had separately signed a land-management agreement with a hotel operator that granted the operator priority renewal rights at the end of the first 30-year term.
The conflict only surfaced during an attempted refinancing in 2025. The buyer's lawyer assessed that the hotel operator's clause could take precedence. The buyer lost certainty over renewal, and the resale value of the villa fell by an estimated 25-30% - implying a potential loss of 7 to 8.4 million THB against the purchase price.
Warning signals: a developer operating a hospitality business on the same land parcel; no full encumbrance audit conducted before signing the lease.
What we would have recommended instead: a comprehensive Land Office due diligence review covering all registered leases and encumbrances, and an exclusive renewal clause with a contractual penalty for breach.
Comparison table
| Parameter | Leasehold 30+30+30 | Thai Co., Ltd. (compliant) | Usufruct | Nominee structure |
|---|---|---|---|---|
| Legality for foreigners | Full | Conditional (real TH shareholders) | Full | Illegal as of 2024 |
| Heritable | Yes (by assignment) | Yes (company shares) | No (expires on death) | Not applicable |
| Control over land | Limited (tenancy) | Indirect (49% stake) | None (use only) | Nominal only |
| Setup cost (THB) | 80,000 - 150,000 | 150,000 - 300,000 | 50,000 - 80,000 | 100,000 - 200,000 |
| Annual maintenance cost (THB) | 0 - 5,000 | 15,000 - 40,000 (audit, PND 50) | 0 | 10,000 - 25,000 |
| Risk of asset loss | Low (if registered) | Medium (DBD audit exposure) | High (on holder's death) | Very high |
| Team recommendation 2026 | Preferred | Acceptable with due diligence | Discouraged without Thai will | Strongly discouraged |
Risks and mistakes
Across the five cases we reviewed, our analysts identified five systemic errors that recur among villa buyers in Phuket and Koh Samui.
- No independent buyer's lawyer. In four of the five cases, the only legal representation was the developer's own counsel. An independent legal opinion costs 30,000 to 80,000 THB. The cost of skipping it reached into the millions of baht
- Failure to verify land title at the Land Office. Checking a Chanote at Krom Thi Din takes one to three working days and costs a few hundred baht. Omitting this step exposes buyers to boundary disputes and the inability to register a leasehold
- Reliance on verbal developer assurances about title conversion, lease renewal, or shareholder status. Every commitment must be in writing and backed by a contractual penalty clause
- No succession planning. A Thai will covering only Thailand-based assets costs 15,000 to 30,000 THB and should be drafted at the same time as the purchase agreement. Without one, heirs may face 12 to 24 months of Thai probate proceedings
- Failure to audit land encumbrances. The Land Office registers all leases, mortgages, and easements on a given parcel. A full extract costs approximately 100 THB and is available within one working day
A further risk applies to foreign tax residents: since 2024, Thailand taxes overseas income remitted into the country in the year it is earned. The ownership structure chosen for a villa affects the tax classification of income flows under both Thai law and the relevant double-taxation agreements.
FAQ
Can a foreigner legally own a villa in Phuket in 2026?
A foreigner can own the building (the villa structure) but not the land beneath it. Control over the land requires an intermediate legal structure: either a leasehold registered at the Land Office, or a compliant Thai company with genuinely capitalised shareholders. Direct land ownership by a foreigner is prohibited under Land Code Section 86.
What is the difference between Chanote and Nor Sor 3 Gor on Koh Samui?
Chanote (Title Deed No. 4) is the highest form of Thai land title, based on precise GPS-linked survey coordinates. Nor Sor 3 Gor (Title No. 3) relies on aerial photography and permits boundary ambiguity. In Maenam, Lamai, and parts of Bophut on Koh Samui, a significant share of land parcels carry Nor Sor 3 Gor title. We recommend purchases only on Chanote-titled land.
How much does leasehold registration at the Land Office cost in Phuket?
The registration fee is 1.1% of total contract value (the sum of rents across the full lease period). For a leasehold valued at 15 million THB, the fee is approximately 165,000 THB. Registration takes between three and six weeks.
Does a 30+30+30 leasehold guarantee 90 years of use?
No. Thai law guarantees only the initial 30-year period. Extension for a further 30 years depends on the goodwill of the landowner at the time. An 'option to renew' clause creates a contractual obligation, not a property right, which means a new landowner is not automatically bound by it. This is one of the most frequently underestimated risks in leasehold villa transactions.
What documents should be checked before buying a villa in Phuket?
The minimum checklist includes: a Chanote extract from the Land Office, a full encumbrance register extract, the developer's DBD company register, the building permit (Ror. 1), the Environmental Impact Assessment (where applicable), and a complete shareholder list for any company that holds the land title.
How much does it cost to fix a defective villa ownership structure?
Based on our 2026 estimates, restructuring costs range from 350,000 to 2,100,000 THB depending on the nature of the defect. Registering an overlooked leasehold is at the lower end; replacing nominee shareholders with genuinely capitalised investors while managing a concurrent DBD audit is at the upper end.
Is a Thai will necessary when buying a villa?
In our assessment, yes - it is a necessity rather than an option. A Thai will covering Thailand-based assets costs 15,000 to 30,000 THB and secures succession independently of any probate process in the buyer's home country. Without one, heirs may wait 12 to 24 months for a Thai court ruling.
How is rental or sale income from a Phuket villa taxed for a foreign buyer?
Income from real property in Thailand is taxable in Thailand under standard Thai tax rules. Since 2024, Thailand also taxes foreign-sourced income remitted into the country in the year it is earned, which affects financial flow planning. Buyers should obtain combined Thai and home-country tax advice before completing a purchase, as tax treatment varies depending on both residency status and ownership structure.
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