Leasehold vs Freehold

Are there any discounts to be given when a buyer opt for a Leasehold vs Freehold.?

Generally there should be a discount, and it tends to scale with the length and structure of the lease. A discount range for a 30 year leasehold could trade at roughly 10-35% below an equivalent freehold or chanote-title price, based on:

• Renewal Certainty 
• Land vs Land + Building
• Exit Liquidity
• Financing
• Lump-sum Payment vs Yearly Payments

But there is no fixed formula — it’s market-driven.

What drives the size of the discount

• Renewal certainty: A single 30-year term with no registered renewal option discounts more heavily than a 30+30+30 structure. Thai law doesn’t guarantee enforceability of renewal promises beyond the first registered term. So discount is typically more, example can be seen at UK Long leases. In markets like the UK, the relationship is more formulaic — value declines sharply once a lease drops below ~80 years due to marriage value and mortgage ability thresholds, and 30-year residential leaseholds are called rare/near end-of-life in that system.
• Land vs Land + Building:  If the leasehold only covers land and the buyer owns the building outright (via with superficies-style structures), the discount is usually smaller than a lease covering both land and building.
• Exit liquidity: Leasehold resale pools are smaller than freehold buyer pools, so the discount also reflects a liquidity premium, not just the diminishing term.
• Financing: Leasehold is harder to mortgage in Thailand, which pushes more of the buyer pool toward cash buyers — this alone tends to add a few points of discount versus freehold.
• Lum-Sum Payment vs Yearly Payments: 

We made 2 example calculations one with full upfront payment and one with Yearly Payments.

Example 1: Full upfront Payment

With a single upfront lump-sum payment (no ongoing yearly payments) and a straight 30-year term, a buyer would target the higher end of a discount range  since there’s no renewal option baked in to soften the risk.

Freehold Sale Value: 6.8 Mil. Baht

Leasehold: 30 Year

Payment Type: Full Upfront

Buyer Discount Range: 25% / 30% / 35% 

Table below:

• No renewal option = buyer is pricing in a hard stop at year 30, not a soft one. That alone tends to push toward larger discount. 
• Single upfront payment actually helps the buyer’s case for a larger discount vs. a lease with ongoing annual payments, since there’s no recurring cost drag reducing the property’s effective yield — the buyer just wants the lump sum discounted for term risk and reduced financing/resale pool.
• If this is a house (structure + land under one 30-year lease, not a superficies split), the discount sits at the larger  end of the range because the buyer has no ownership claim on the structure either.

• If there’s any registered or documented intent for renewal (even informal, e.g., 30+30), the buyer could accept slightly lower discount.
• If the location is high-demand/high-liquidity (e.g., central Jomtien or Pratumnak), buyer could accept a lower discount because resale is easier.
• If it’s a rural or lower-demand area, push toward larger discount since the buyer pool for leasehold resale is thinner.

For a clean, defensible number without more specifics on location or renewal terms, 30% (~฿4.76M) is a reasonable working figure to open a negotiation from.

Why a single upfront lump-sum warrants a larger discount:

• Time value of money: The buyer hands over the full amount today and gets nothing back in installments. Compare that to a structure with annual payments, where the buyer’s effective present-value outlay is lower (later payments are worth less in today’s money). Paying 100% upfront should logically be discounted relative to spreading the same total value over time — this is the same principle behind cash-purchase discounts generally.
• Landlord’s incentive to honor the lease drops once fully paid: With ongoing annual payments, the tenant retains leverage — if the landlord breaches terms, the tenant can withhold future payments. Once the tenant has paid everything upfront, that leverage disappears entirely. This raises the buyer’s practical risk of disputes, unauthorized resale, or non-recognition of the lease later in the term, and is a real risk factor in Thai leasehold specifically given enforcement relies heavily on registration and the landlord’s ongoing cooperation.
• No recurring payment = no natural checkpoint for renegotiation or exit: An annual-payment structure gives the tenant a chance to walk away or renegotiate at each interval if circumstances change. A prepaid lump sum locks the buyer in with no such flexibility, which buyers price as added risk.

Example 2: Annual Payments

If you structure to annual payments, the tenant regains leverage (can stop paying if the landlord breaches terms), which reduces the buyer’s risk relative to the prepaid scenario. That argues for starting from a smaller buyer discount off freehold (maybe 10-20% rather than 25-35%) before amortizing.

Freehold Sale Value: 6.8mil,

Leasehold: 30 Year.

Payment Type: Yearly lease payments @ interest rate 6%

Buyer Discount Range(1): 10 % / 15% / 20% 

With a flat discount applied to the ฿6.8M sales price, then amortized at 6% interest over 30 years:

(A) comparison to rent. A tenant paying rent gets nothing back either — same as a leaseholder at the end of 30 years. The real difference between “renting” and “buying this leasehold” is:

• Price certainty: The leaseholder locks in a fixed payment for 30 years; a renter’s rate can rise with the market.
• Security of tenure: The leaseholder has a legally protected 30-year claim; a renter can typically be given notice and asked to leave far sooner.
• Control: The leaseholder can usually renovate, sublet, or sell the remaining lease term; a renter generally can’t.

That means; if these monthly figures (฿32,930-37,050) come in above market rent, buyers will reasonably ask what they’re getting for the premium — since it isn’t equity. The honest answer would need to rest entirely on security of tenure and price-lock, not on “eventually owning something.” If that’s not a compelling enough case at these numbers, the fix is a steeper upfront discount or a lower interest rate, not a reframe of what the payment represents.