Pattaya Annual Land and Building Tax (LBT) Calculation
This tax, administered by the Treasury Department’s appraised value (ราคาประเมิน) — the fixed schedule updated every 4 years. This number has nothing to do with what any individual property actually sold for. But it’s a standardized government estimate applied uniformly to all similar properties in a zone/category. The Local Tessaban/SAO (Subdistrict Administrative Organization) will apply and collect the taxes.
Note 1; For Condominiums the government created the D-Value system in June 2026 for LBT-value calculation. Which lets you look up appraisal prices per floor. Tag, Province/District/Condo name and it pulls up the data per floor. The name of the condo has to be in Thai Language, which can give some initial try and error lookups. If the database can not find it try to make the words smaller. example not “Royal Cliff Garden” but only “Cliff” and will list all items in the database.
Note 2; The Land and Building Tax treats your primary/only residence very differently from any additional houses you own.
Primary residence (บ้านหลังหลัก) — you own both the land and the house, AND your name is on the house registration (ทะเบียนบ้าน) as the resident:
- First ฿50 million of combined land+building value: exempt (0%)
- ฿50–75 million: 0.03%
- ฿75–100 million: 0.05%
- Over ฿100 million: 0.10%
If you only own the house (not the land — e.g. house on rented/leased land) and are registered there, the exemption is smaller: only the first ฿10 million is exempt, same rate bands above that.
Second, third, etc. house (not your registered primary residence) — no exemption threshold at all. Tax applies to the full value from baht one, using the same residential rate schedule (0.02%–0.10% progressive bands, slightly different breakpoints than above). So a second house worth ฿5 million pays tax on the full ฿5 million, while a primary residence worth the same pays zero.
Note 3. When paying yearly LTB taxes the government makes a difference for Residential, private usage and Company use. This is based on the property’s actual physical use category (ประเภทการใช้ประโยชน์จริง) as classified by the tessaban. A house in company name, being marketed for sale, but still standing as an ordinary residential structure (not rented out commercially, not run as a business), typically gets classified as residential (ที่อยู่อาศัย) — even though the owner is a company — and residential carries a much lower rate table.
Private/Residential use:
| Appraised Value (Million ฿) | Primary Residence (Land + Building) | Primary Residence (Building Only) | Second House & Beyond |
|---|---|---|---|
| 0 – 10 | Exempt | Exempt | 0.02% |
| 10 – 50 | Exempt | 0.02% | 0.02% |
| 50 – 75 | 0.03% | 0.03% | 0.03% |
| 75 – 100 | 0.05% | 0.05% | 0.05% |
| 100+ | 0.10% | 0.10% | 0.10% |
Company use:
| Appraised Value (Million ฿) | Annual Tax Rate |
|---|---|
| 0 – 50 | 0.30% |
| 50 – 200 | 0.40% |
| 200 – 1,000 | 0.50% |
| 1,000 – 5,000 | 0.60% |
| 5,000+ | 0.70% |
LBT Appraisal Calculation
An appraisal via the way below, on which the LTB is based on may also be guideline for Banks in case of a mortgage. It does not equate to real selling prices of Property. (which is commonly much higher, especially if high quality finishings and/or tiles are used. Moreover the calculation below does not take into consideration electrical appliances, air conditioning and furniture.
Step 1
Calculate the appraisal price land value, zoom in to the actual location via https://landsmaps.dol.go.th/ Both in English and Thai, or use the treasury website if you have on hand the titledeed.
Step 2
Appraisal price for building is gathered into categories, Here the data for chonburi (2026) Every 4 years the appraisal price (and depreciation) is recalculated. the current period is (2566–2569) 2023-2026
Thai Government Building Code Definitions: Treasury Department (กรมธนารักษ์) — Standard Construction Definitions (we took rates for Nongprue municipality, you can find all rates on the website from treasury department)
Source: Code Rates Nongprue (PDF file in Thai language, translation via Claude)
| Code | Structure Type (Thai) | Structure Type (English) | Definition | THB/sq.m |
| 101 | บ้านพักอาศัยไม้ชั้นเดียว | Single-storey wooden house | Detached structure fixed to the ground, main structure not connected to any other building, single storey. | 8,200 |
| 102 | บ้านพักอาศัยไม้ชั้นเดียวใต้ถุนสูง | Single-storey wooden house on stilts | Detached structure fixed to the ground, main structure not connected to any other building, single storey, raised on stilts. | 8,300 |
| 103 | บ้านพักอาศัยตึกชั้นเดียว | Single-storey concrete/masonry house | Detached structure fixed to the ground, main structure not connected to any other building, single storey. | 8,500 |
| 104 | บ้านพักอาศัยไม้สองชั้น | Two-storey wooden house | Detached structure fixed to the ground, main structure not connected to any other building, two storeys. | 7,900 |
| 105 | บ้านพักอาศัยตึกสองชั้น | Two-storey concrete/masonry house | Detached structure fixed to the ground, main structure not connected to any other building, two storeys. | 8,400 |
| 106 | บ้านพักอาศัยครึ่งตึกครึ่งไม้สองชั้น | Two-storey half-concrete/half-wood house | Detached structure fixed to the ground, main structure not connected to any other building, two storeys. | 8,100 |
| 107 | บ้านพักอาศัยตึกสามชั้น | Three-storey concrete/masonry house | Detached structure fixed to the ground, main structure not connected to any other building, three storeys. | 8,300 |
| 108 | บ้านพักอาศัยแฝดตึกสองชั้น | Two-storey semi-detached (twin) house | Two houses built joined together, separated by a dividing wall, with open space between the fence/boundary line and the building on the front, back, and sides of each house; structure fixed to the ground; two storeys. | 7,900 |
| 109 | บ้านพักอาศัยแฝดตึกสามชั้น | Three-storey semi-detached (twin) house | Same configuration as above (twin house, dividing wall, open space on all sides), structure fixed to the ground; three storeys. | 8,000 |
| 110 | บ้านทรงไทยไม้ชั้นเดียวใต้ถุนสูง | Traditional Thai-style single-storey wooden house on stilts | Detached traditional Thai-style house, single storey, raised on stilts, distinctive traditional design, structure fixed to the ground, main structure not connected to any other building. | 8,300 |
| 111 | บ้านทรงไทยครึ่งตึกครึ่งไม้สองชั้น | Traditional Thai-style two-storey half-concrete/half-wood house | Detached traditional Thai-style house, two storeys, distinctive traditional design, structure fixed to the ground, main structure not connected to any other building. | 8,400 |
| 112 | บ้านพักอาศัยแฝดตึกชั้นเดียว | Single-storey semi-detached (twin) house | Two houses built joined together, separated by a dividing wall, with open space between the fence/boundary line and the building on the front, back, and sides of each house; structure fixed to the ground; single storey. | 8,700 |
| 201 | บ้านแถว (ทาวน์เฮาส์) ชั้นเดียว | Single-storey row house (townhouse) | Continuous row of two or more units, single storey, built mostly of fire-resistant materials, with open space between the fence/boundary line and the building at the front and back of each unit. | 7,600 |
| 202 | บ้านแถว (ทาวน์เฮาส์) สองชั้น | Two-storey row house (townhouse) | Same as above; two storeys. | 7,400 |
| 203 | บ้านแถว (ทาวน์เฮาส์) สามชั้น | Three-storey row house (townhouse) | Same as above; three storeys. | 7,550 |
| 204 | บ้านแถว (ทาวน์เฮาส์) สี่ชั้น | Four-storey row house (townhouse) | Same as above; four storeys. | 7,400 |
| 301 | ห้องแถวไม้ชั้นเดียว | Single-storey wooden shophouse row | Continuous row of two or more units, single storey, built mostly of non-fire-resistant materials, with dividing walls separating each unit. | 7,250 |
| 302 | ห้องแถวไม้สองชั้น | Two-storey wooden shophouse row | Same as above; two storeys. | 7,850 |
| 303 | ห้องแถวครึ่งตึกครึ่งไม้สองชั้น | Two-storey half-concrete/half-wood shophouse row | Same as above; two storeys, mostly non-fire-resistant materials, dividing walls between units. | 7,700 |
| 401 | ตึกแถวชั้นเดียว | Single-storey commercial building row (shophouse) | Continuous row of two or more units, single storey, built mostly of fire-resistant materials, with dividing walls separating each unit. | 7,700 |
| 402 | ตึกแถวสองชั้น | Two-storey commercial building row | Same as above; two storeys. | 8,300 |
| 403 | ตึกแถวสองชั้นครึ่ง | Two-and-a-half-storey commercial building row | Same as above; two and a half storeys. | 8,300 |
| 404 | ตึกแถวสามชั้น | Three-storey commercial building row | Same as above; three storeys. | 8,300 |
| 405 | ตึกแถวสามชั้นครึ่ง | Three-and-a-half-storey commercial building row | Same as above; three and a half storeys. | 8,300 |
| 406 | ตึกแถวสี่ชั้น | Four-storey commercial building row | Same as above; four storeys. | 8,500 |
| 407 | ตึกแถวสี่ชั้นครึ่ง | Four-and-a-half-storey commercial building row | Same as above; four and a half storeys. | 8,500 |
| 408 | ตึกแถวห้าชั้น | Five-storey commercial building row | Same as above; five storeys. | 8,450 |
| 409 | ตึกแถวหกชั้น | Six-storey commercial building row | Same as above; six storeys. | 8,400 |
| 501 | คลังสินค้า พื้นที่ไม่เกิน 300 ตร.ม. | Warehouse, area up to 300 sq.m. | Concrete or steel structure with a concrete floor, roof, and surrounding walls, open interior, used for storing goods or items. | 5,650 |
| 502 | คลังสินค้า พื้นที่เกินกว่า 300 ตร.ม. ขึ้นไป | Warehouse, area over 300 sq.m. | Same as above; larger size category. | 3,400 |
| 503 | เรือนคนใช้/ครัว | Servant quarters / kitchen outbuilding | Ancillary detached structure of a residential house, structure fixed to the ground. | 6,150 |
| 504 | โรงจอดรถ | Carport / garage | Detached structure with no main structure connected to any other building; concrete/steel/wood structure; has a roof, concrete floor, and open sides. | 2,550 |
| 505 | สถานศึกษา | Educational institution | Reinforced concrete, steel, or wood structure with floor, roof, ceiling, and walls; used as an early childhood development facility or educational site of a school, learning center, college, institute, university, or government/private education authority. | 7,500 |
| 506/1 | โรงแรม ความสูงไม่เกิน 5 ชั้น | Hotel, up to 5 storeys | Reinforced concrete or steel structure with floor, roof, ceiling, walls, restrooms, service counter, housekeeping, security systems, fire exits, corridors, entrances/exits, and stairs or elevators; divided into one or more guest rooms; established for commercial purposes to provide temporary accommodation for travelers or other persons for daily payment. | 9,650 |
| 506/2 | โรงแรม ความสูงเกินกว่า 5 ชั้นขึ้นไป | Hotel, over 5 storeys | Same as above; taller category. | 9,850 |
| 507 | โรงมหรสพ | Theater / entertainment venue | Reinforced concrete or steel structure with floor, roof, ceiling, walls, and areas for patrons (e.g., viewing area, lobby, restrooms); used for showing films, staging plays, concerts, or other performances. Excludes theaters located inside department stores or wholesale/retail commercial buildings. | 7,900 |
| 508 | สถานพยาบาล | Medical facility / clinic | Reinforced concrete or steel structure with floor, roof, ceiling, walls, and patient-service areas including examination rooms, emergency rooms, X-ray rooms, dispensary, lab, doctor/nurse offices, inpatient wards, etc., for treatment or licensed medical practice, including necessary ancillary buildings. | 9,400 |
| 509/1 | สำนักงาน ความสูงไม่เกิน 5 ชั้น | Office building, up to 5 storeys | Reinforced concrete or steel structure with floor, roof, ceiling, walls, lighting, building security systems, fire exits, corridors, entrances/exits, stairs or elevators, work areas, meeting rooms, and communal restrooms. | 7,900 |
| 509/2 | สำนักงาน ความสูงเกินกว่า 5 ชั้นขึ้นไป | Office building, over 5 storeys | Same as above; taller category. | 8,800 |
| 510 | ภัตตาคาร | Restaurant | Reinforced concrete, steel, or wood structure with floor, roof, ceiling, walls, and ancillary areas; used to sell food or drinks, with dining tables, food preparation area, dishwashing area, lobby, restrooms, necessary ancillary buildings, and waste management area. | 6,950 |
| 511/1 | ห้างสรรพสินค้า | Department store | Reinforced concrete or steel structure with floor, roof, ceiling, walls, restrooms, entrances/exits or elevators, building safety/fire-exit systems, and display/sales areas divided by product category or brand (whether partitioned into rooms or not), including in-building parking areas. | 9,700 |
| 511/2 | อาคารพาณิชยกรรม ประเภทค้าปลีกค้าส่ง | Commercial building — retail/wholesale type | Reinforced concrete, steel, or wood structure with floor, roof, ceiling, walls, restrooms, entrances, corridors, safety systems, and fire exits; used for commerce in one or several buildings sharing common floor area for retail/wholesale operations, including storage of consumer goods held for sale. | 7,950 |
| 512 | สถานีบริการน้ำมันเชื้อเพลิง | Fuel service station | Facility used to store and dispense fuel to vehicles, specifically the canopy-covered area, including the station office and fuel pump area. | 5,550 |
| 513 | โรงงาน | Factory | Reinforced concrete, steel, or wood structure with floor, roof, ceiling, walls, and areas used for making, producing, assembling, packing, maintaining, testing, improving, processing, transporting, storing, or destroying items, whether using machinery or not, including legally required ancillary buildings. | 6,200 |
| 514 | ตลาด พื้นที่ไม่เกิน 1,000 ตร.ม. | Market, area up to 1,000 sq.m. | Reinforced concrete or steel structure with floor, roof, and partial walls, meeting the legal requirements for market operations, comprising vendor stalls, walkways, restrooms, and waste collection area. | 3,450 |
| 515 | ตลาด พื้นที่เกินกว่า 1,000 ตร.ม. ขึ้นไป | Market, area over 1,000 sq.m. | Same as above; larger size category. | 3,900 |
| 516 | อาคารพาณิชย์ประเภทโฮมออฟฟิศ | Commercial building — home office type | Reinforced concrete or steel structure with floor, roof, ceiling, walls; continuous row of two or more units with dividing walls, built mostly of fire-resistant materials; has office space, living quarters, and parking for owners and visitors. | 9,000 |
| 517 | โรงเลี้ยงสัตว์ | Animal husbandry building | Reinforced concrete, steel, or wood structure with a roof, used for raising animals. | 2,050 |
| 518 | โรงงานซ่อมรถยนต์ | Auto repair shop | Reinforced concrete or steel structure with floor, roof, walls; has a tool storage room and an area for engine repair, maintenance, bodywork, and spray-painting/anti-rust coating. | 5,850 |
| 519 | อาคารจอดรถ | Parking building / garage structure | Reinforced concrete or steel structure with floor, roof, ramps or stairs between levels, and fall-prevention walls/barriers. | 5,650 |
| 520/1 | อาคารอยู่อาศัยรวม ความสูงไม่เกิน 5 ชั้น | Multi-unit residential building (condo/apartment), up to 5 storeys | Reinforced concrete structure with floor, roof, ceiling, walls, restrooms, corridors, entrances/exits, and separate or shared stairs/elevators, divided into one or more residential units. | 8,000 |
| 520/2 | อาคารอยู่อาศัยรวม ความสูงเกินกว่า 5 ชั้นขึ้นไป | Multi-unit residential building, over 5 storeys | Same as above; taller category. | 8,700 |
| 521 | ป้อมยาม | Guard booth | Detached structure fixed to the ground, main structure not connected to any other building; has floor, walls, roof, sun/rain protection, for staff on-site security or watch duty. | 5,500 |
| 522 | อาคารพาณิชย์ ประเภทโชว์รูมรถยนต์ | Commercial building — car showroom type | Reinforced concrete or steel structure with floor, roof, ceiling, walls mostly glass; open floor area for displaying vehicles, may include service/maintenance area, customer reception area, and office rooms. | 4,500 |
| 523 | ห้องน้ำรวม | Communal restroom building | Reinforced concrete or steel structure with floor, roof, ceiling, walls; one or more rooms, built as a separate structure from the main building. | 6,200 |
| 601 | รั้วคอนกรีต | Concrete fence/wall | Boundary marker built mostly of brick or precast concrete. (incl. door) | 2,000 |
| 602 | รั้วลวดหนาม | Barbed wire fence | Boundary marker built mostly of barbed wire. | 400 |
| 603 | รั้วสังกะสี | Zinc/galvanized sheet fence | Boundary marker built mostly of zinc sheeting. | 500 |
| 604 | รั้วลวดถัก | Woven wire mesh fence | Boundary marker built mostly of wire mesh. | 1,000 |
| 605 | รั้วไม้ | Wooden fence | Boundary marker built mostly of wood. | 1,350 |
| 606 | รั้วเหล็กดัด | Wrought iron fence | Boundary marker built mostly of wrought iron. | 2,850 |
| 607 | รั้วอัลลอยด์ | Alloy fence | Boundary marker built mostly of alloy metal. | 6,250 |
| 608 | สระว่ายน้ำ | Swimming pool | Reinforced concrete structure, divided into swimming area, rinse area, restroom, and pump/equipment room. | 7,000 |
| 609 | ลานกีฬาอเนกประสงค์ | Multi-purpose sports court | Reinforced concrete or asphalt open-air surface with a floor covering material. | 800 |
| 610 | ถนนคอนกรีต | Concrete road | Road used for travel, with steel reinforcement giving the road surface extra strength. | 900 |
| 611 | ลานคอนกรีต | Concrete yard/pavement | Open reinforced-concrete paved area. | 550 |
| 612 | ถนนลาดยาง | Asphalt (paved) road | Road used for travel, surfaced with asphalt mixed with stone or sand. | 600 |
| 613 | ป้ายโฆษณา | Billboard / advertising sign | Reinforced concrete or steel structure with an area for mounting advertising signage. | 8,450 |
| 614 | ท่าเทียบเรือ | Pier / jetty | Reinforced concrete structure built as a bridge extending from land into the water, with mooring posts for boats. | 11,500 |
Translated from the Treasury Department (กรมธนารักษ์) standard construction definitions document (“คำนิยามประกอบแบบมาตรฐานสิ่งปลูกสร้าง”), used to classify structures for government property appraisal purposes.
Depreciation
Depreciation is also part of how the Treasury Department (กรมธนารักษ์) calculates the assessed value of a building/house, separate from the land value. Here’s how it generally works:
The formula
Assessed building value = (Base unit price per sq.m. for that construction code, e.g. 105, 107, etc.) × (floor area) − accumulated depreciation, based on the building’s age.
Depreciation mechanics
- Each construction type/code has its own annual depreciation rate schedule (a permanent reinforced-concrete house depreciates more slowly per year than, say, a wooden or semi-permanent structure).
- Depreciation is applied per year of age from the year construction was completed (or the year it was last officially re-appraised, if renovated/rebuilt).
- There’s a floor on residual value — even a very old house won’t depreciate to zero. The Treasury Department’s tables set a minimum remaining value (commonly cited around 10% of the original base assessed value) so old structures still carry some appraised value, however old.
- The Treasury updates its base unit prices per construction code periodically (this is separate from the depreciation schedule itself, which is a standard table applied uniformly).
When you get pay LBT taxes, the Treasury Department already has depreciation baked in based on the building’s age on record — you don’t need to calculate it yourself. If you want the actual depreciation rate table for a specific code (percentage per year), you have to search the current Ministerial Regulation (กฎกระทรวงการกำหนดหลักเกณฑ์การคำนวณราคาประเมินสิ่งปลูกสร้าง) rather than approximate it but there is little known data online available.
The following, data we could find:
Here’s what the governing regulation (กฎกระทรวง การกำหนดราคาประเมินที่ดินหรือสิ่งปลูกสร้างฯ พ.ศ. 2563, issued under the Asset Appraisal for State Benefit Act B.E. 2562) says:
Legal definition of building depreciation (ค่าเสื่อมราคาสิ่งปลูกสร้าง):
The regulation defines it explicitly as depreciation resulting from the age of the structure since construction, deducted as a percentage per year, according to the type of structure.
- The Provincial Committee (คณะกรรมการประจำจังหวัด) calculates the base building value from the standard construction-cost tables (101, 105, 107, etc.), based on materials and labor cost data.
- Every appraisal report for a building must include, among other things, a depreciation rate table (ตารางกำหนดอัตราค่าเสื่อมราคาสิ่งปลูกสร้าง) as a mandatory component — separate from the base cost table and the final summary.
- Final appraised building value = base construction-cost value − accumulated depreciation, applied per year of the building’s age, at the rate set for that specific construction code.
What’s not in this regulation:
The actual numeric depreciation percentage-per-year table (e.g., “X% per year for code 105, Y% per year for code 402”) isn’t published in the ministerial regulation itself — it’s set separately by the central Valuation Committee (คณะกรรมการกำหนดราคาประเมินทุนทรัพย์) and issued as an internal annex/circular per accounting round (currently the 2566–2569 round). These annex tables aren’t reliably indexed on the open web — they’re typically obtained directly from the Land Office or Treasury Department provincial office when they run an appraisal, or via the Treasury’s own lookup portal.
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 20-40% below an equivalent freehold or chanote-title price, based on:
- seller willingness,
- location (land value after lease),
- renewal terms,
- buyer pool.
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. structure split: If the leasehold only covers land and the buyer owns the building outright (common with superficies-style structures), the discount is usually smaller than a lease covering both land and structure.
- 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.
- Remaining term at resale: A property with 30 years remaining at initial sale is worth noticeably less by year 15-20 of that term (declining balance, not linear), which matters for anyone modeling resale value.
We made 2 example calculations with full upfront and Yearly Payments.
Example 1:
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:
| Buyer Discount | Leasehold price | Discount amount | Effective monthly Rental value* |
|---|---|---|---|
| 25% | ฿5.1M | ฿1.7M | ~฿14,170 |
| 30% | ฿4.76M | ฿2.04M | ~฿13,220 |
| 35% | ฿4.42M | ฿2.38M | ~฿12,280 |
*This is a simple division — leasehold price ÷ 360 months (30 years) — with no interest applied, since this is the single upfront payment scenario, not an amortized structure. It’s not a real “rent” figure; it just shows what the lump sum works out to per month if spread evenly, for comparing against market rental rates at a glance.
Range Remarks:
- No renewal option = buyer is pricing in a hard stop at year 30, not a soft one. That alone tends to push toward the wider end (30%+) rather than the narrower end.
- Single upfront payment actually helps the buyer’s case for a slightly 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 higher 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 discount typically narrows toward 20-25%.
- If the location is high-demand/high-liquidity (e.g., central Jomtien or Pratumnak), buyer accept a smaller discount because resale is easier.
- If it’s a rural or lower-demand area, push toward 35-40% 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:
Freehold Sale Value: 6.8mil,
Leasehold: 30 Year.
Payment Type: Yearly lease payments @ interest rate 6%
Buyer Discount (1):
(1) 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 30-35%) before amortizing.
With a flat discount applied to the ฿6.8M sales price, then amortized at 6% interest over 30 years:
Buyer Discount | Leasehold value | Annual payment | Monthly Rental reference (A) | Total paid over 30 yrs |
|---|---|---|---|---|
| 10% | ฿6.12M | ~฿444,600 | ~฿37,050 | ~฿13.34M |
| 15% | ฿5.78M | ~฿419,900 | ~฿34,990 | ~฿12.60M |
| 20% | ฿5.44M | ~฿395,200 | ~฿32,930 | ~฿11.86M |
(A) comparison to rent. A tenant paying market 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.