Selling your leasehold villa on Koh Phangan: assignment, taxes and exit planning

At some point you'll want to sell. Before you do — ideally before you buy — it's worth understanding what you actually hold, how it transfers, what it costs you, and what affects how long you wait. The answers depend on how the asset is structured.

What you own and what you can sell

In the standard structure for a foreign buyer, you hold two things separately: the remaining term on a registered land lease, and ownership of the villa building (through the construction permit and a registered superficies). When you sell, both need to transfer to the buyer.

• The land lease is assigned to the buyer — the buyer steps into your position as lessee for the remaining term. This only works if the lease explicitly permits assignment. Without that clause, the transfer needs the landlord's active cooperation and may effectively be blocked. Check this clause before you buy.
• The building is sold as a structure. Under a registered superficies, this can be done independently of the lease and binds future landowners — a meaningful protection for both buyer and seller.
• The residual lease term is what the buyer is paying for. A 28-year lease is worth significantly more than a 15-year one. Renewal clauses improve marketability, but they are contractual promises, not guaranteed rights — courts in Thailand have held that automatic renewal provisions are not enforceable as property rights. Don't plan an exit around renewals that haven't happened.

Taxes when you sell

The seller side at the Land Office typically carries:

• Specific Business Tax (SBT) — 3.3% of the higher of the appraised or sale price, if you held the property for under five years. Waived entirely after five years.
• Stamp duty — 0.5%, applying only when SBT doesn't — i.e., when you've held five years or more.
• Withholding tax — for an individual seller, calculated progressively on the Land Office's appraised value with deductions based on the number of years held. For a foreign non-resident this is withheld at the Land Office. For a company seller, 1% of the higher of appraised or sale price.
• Transfer fee — 2% of the appraised value, often split with the buyer by local practice.

There is no separate capital gains tax in Thailand — the withholding tax system is how gains are taxed at source. The five-year holding threshold matters: passing it eliminates the 3.3% SBT and replaces it with just 0.5% stamp duty. Consult a Thai accountant for the exact calculation; it depends on the holding period and the Land Office's appraised value, which is typically below market. For the full tax picture including what you paid on the way in, see Costs, taxes and the FET form.

Getting your money out: the FET form

To repatriate your sale proceeds out of Thailand, you need the original Foreign Exchange Transaction (FET) form that your Thai bank issued when you brought the purchase funds in. Present the FET form, the Land Office sale agreement and the tax receipt to your bank — they process the international wire transfer. Without the FET form, repatriation is significantly harder and some banks will refuse it outright. Keep this document from the day you buy.

Liquidity and time to sell

Once you have a buyer, Land Office registration takes one day. Finding the buyer is the longer part.

• A leasehold villa with 25+ years remaining and a clear assignment clause is a marketable asset. One with 15 years and an assignment clause that is unclear will take considerably longer.
• Well-maintained, turnkey properties in well-connected locations sell faster. Western-coast and beachfront villas are more liquid than inland plots.
• The buyer pool is almost entirely cash buyers — very few banks will lend against a leasehold villa in Thailand — which limits the pool and means pricing needs to be realistic.
• Budget 3–9 months from listing to completion for a realistically priced leasehold villa in the current market. Properties priced above market can sit for 12–18 months or longer.

What to plan at the buying stage with exit in mind

If liquidity on exit matters — and for most buyers it should — the time to address it is when you buy:

• Confirm the lease explicitly permits assignment to a third party.
• Ensure the building transfer mechanism (superficies) is clearly registered and separable from the lease.
• Verify how renewal provisions are worded — and treat them as a bonus, not a guarantee; plan around the primary term.
• Keep the FET form the day funds arrive.

The mechanics of the leasehold structure and building ownership are covered in How foreigners legally own a villa. For the full purchase process, including what to check in the contracts stage, see How to buy property on Koh Phangan.