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UAAbout Phuket real estate
Phuket Real Estate Market and Investment Potential 2025
Phuket is one of the most attractive destinations for foreign investment in Southeast Asia, combining a premium lifestyle with strong profitability. The Phuket real estate market continues to grow steadily, supported by international tourism, expanding infrastructure and rising demand for quality properties.Real Estate Market Attractiveness
- Tourism and rental demand: Phuket remains Thailand’s leading resort destination. Millions of tourists visit the island each year, and in 2024 the airport handled 8.65 million arrivals — only 5% below the 2019 record. This ensures a strong rental demand for Phuket real estate, with rental yields between 6% and 10% annually in popular beach areas such as Patong, Karon and Bang Tao.
- Price growth and liquidity: Property prices in Phuket have shown stable appreciation. In premium areas such as Bang Tao and Kamala, villa prices grew by 10–15% annually during 2023–2025. Overall, real estate values increased by 12–15% in Thai Baht compared with 2023.
- Infrastructure: The island’s infrastructure includes 13 international schools, 9 hospitals, 4 marinas and several large shopping centers. Expansion of Phuket International Airport continues, with a target capacity of 18 million passengers per year after phase two.
- Buyers: The Phuket real estate market attracts a diverse international audience — investors from Russia, China, Europe, India and Ukraine drive steady demand across all segments.
Main Locations in Phuket
- Bang Tao (Laguna/Cherngtalay): A premium cluster with branded Phuket real estate projects and luxury villas. Strong demand from expats and long-stay visitors supports liquidity and capital appreciation potential.
- Nai Harn and Rawai: Family-oriented and tranquil southern districts, popular for long-term living and medium-term rentals. Phuket expat communities and digital nomads maintain consistent demand.
- Kata: A well-developed beachfront area with growing villa and condo projects, favored by families and surfers. Attractive for short-term rentals, but owners must comply with the Hotel Act for stays under 30 days.
- Karon: A long beachline with major resorts generating stable tourism and rental demand for Phuket real estate. In prime zones such as Karon, rental income potential reaches 6–10% annually with proper property management and legal compliance.
Legal Framework for Foreign Ownership of Real Estate in Phuket
Foreigners can purchase real estate in Thailand, including Phuket properties, under specific legal conditions. The legal framework defines ownership rules depending on the property type — condominiums, villas, houses or land.Condominiums
Condominiums are the only type of Phuket real estate that foreigners can own in full (freehold) in their personal name.- Freehold quota: Foreigners may own up to 49% of the total sellable area in any condominium project in Thailand under the Foreign Freehold Quota.
- Ownership rights: Freehold ownership grants a permanent legal title to the property. The owner of Phuket real estate can sell, rent, or transfer it by inheritance, with the same rights as a Thai citizen.
- Payment condition: To register freehold ownership, funds for purchasing real estate must be transferred into Thailand from abroad in foreign currency and converted into Thai Baht. The transaction must be documented by a Foreign Exchange Transaction Form (FET) or equivalent bank certificate required by the Land Department.
Villas, Houses and Land
Foreigners are not allowed to directly own land in Thailand, including Phuket land plots. Ownership of villas or houses built on leased land is structured through legal mechanisms.- Building ownership: Foreigners may own the physical structure — a house or villa — while the land remains under lease. Building ownership is registered at the Land Department and can be independently sold or inherited.
- Leasehold: The most common way to control Phuket land is through a long-term lease (usually 30 years). Contracts often include renewal options (e.g. 30+30 years), but extensions are not automatically enforceable by law and should be reviewed by professional lawyers. Leasehold grants exclusive usage rights for the term, while the land remains owned by a Thai lessor.
- Thai Limited Company: Foreigners may establish a Thai company (with at least 51% Thai shareholders) that can legally own land in Phuket. However, forming such a company solely to bypass foreign ownership restrictions is illegal and subject to investigation.
- Land ownership exceptions: There are limited legal options for direct land ownership by foreigners in Phuket:
- Prescribed Investment (Land Code Section 96): Requires an investment of at least 40 million THB in government bonds or approved funds, allowing ownership of up to 1 rai (1,600 m²) for residential purposes.
- BOI Promotion: Foreign entities endorsed by Thailand’s Board of Investment (BOI) may own land for promoted business activities — typically used for large-scale or industrial projects rather than private property.
Fee / Tax
Rate
Payer
Notes
Transfer Fee
2% of the appraised value
Buyer and seller split equally
Calculated based on the government-assessed property value
Specific Business Tax, SBT
3.3% (including municipal tax of 0.3%)
Seller
Applies if the property is sold within 5 years of ownership or if the seller is a company
Stamp Duty
0.5% of the sale price or appraised value (whichever is higher)
Seller
Applies only if SBT is not levied
Withholding Tax, WHT
1% (for companies) or progressive scale (for individuals)
Seller
Withheld by the Land Department during the transaction
Leasehold Registration Fee
1.1% of the total lease value
Buyer and seller split equally
Payable upon registration of a 30-year lease agreement
3.2. Land and Building Tax in Phuket (Land and Building Tax Act B.E. 2562)
This tax, effective from January 1, 2020, replaced the previous house and land taxes. It applies to all individuals and legal entities who own, possess, or use land or buildings (including condominiums) in Thailand as of January 1 each year. For Phuket real estate owners, this is a key part of ongoing property expenses.
Tax base: The assessed value of the real estate as determined by the relevant government authority.
Maximum tax rates (set by Royal Decree and not exceeding the following limits):
- Agricultural use — 0.15%
- Residential use — 0.3%
- Commercial use — 1.2%
- Vacant or unused land — 1.2%
Note: If a land plot or building remains vacant for more than three consecutive years, the rate may increase by 0.3% every three years, up to a maximum of 3%.
Tax Exemptions (for individuals)
- Land and buildings used for agricultural purposes are exempt if the owner is an individual and the value does not exceed 50 million THB.
- Land and buildings used for residential purposes are exempt if owned by an individual registered in the house book, and the total value does not exceed 50 million THB.
3.3. Visas and Long-Term Stay in Phuket
Buying real estate in Phuket does not automatically grant permanent residency or citizenship. However, several visa programs allow long-term stays and are especially attractive for investors, property owners, and expats living in Phuket.
Thailand Elite Visa (Thailand Privilege Residence Program): Provides a residence permit for 5–20 years in exchange for membership fees starting from 650,000 THB.
Long Term Resident (LTR) Visa: A 10-year visa aimed at four categories, including wealthy global citizens and retirees. Requires meeting financial criteria and, in some cases, investment of at least 10 million THB in Phuket real estate or government bonds. LTR visa holders benefit from a reduced personal income tax rate of 17% for qualified professionals.
Destination Thailand Visa (DTV): A new visa for digital nomads and remote workers, allowing stays of up to 180 days with the possibility of extension.
4. Investment Strategies and Risks in Phuket Real Estate
4.1. Rental Income from Phuket Real Estate (Short-Term vs Long-Term)
Short-term vacation rentals typically provide the highest return on investment, averaging between 6% and 10% per year, especially during Phuket’s high tourist season.
- Key requirement: To legally rent out Phuket real estate for short stays, a hotel license is required. Apartments in condominium-hotel complexes that comply with hotel regulations are the most attractive investment properties in Phuket.
- Management: Foreign investors are advised to delegate property management to professional agencies or international hospitality brands (e.g., Radisson, Wyndham). This ensures stability, compliance, and predictable income.
- Long-term rentals: Residential apartments leased on a monthly or yearly basis typically generate lower yields — around 3–4% annually.
4.2. How to Avoid Common Investment Risks
Investing in Phuket real estate can offer high rewards, but it also involves specific risks that must be properly managed.
Risk: Unreliable developer.
How to avoid: Choose developers with a proven track record of completed projects. Verify company registration (DBD), capital, building permits, and EIA approval.
Risk: Legal irregularities (nominee structures).
How to avoid: Avoid ownership through Thai nominees — this is illegal. Use legal ownership options such as Freehold condominiums or properly structured Leasehold agreements.
Risk: Hidden costs.
How to avoid: Include all additional expenses when evaluating Phuket real estate: registration fees, taxes, maintenance (Common Area Fees), and management costs.
Risk: Poor location.
How to avoid: Focus on real estate located near Phuket’s main beaches and developed areas. Properties far from the sea often have low liquidity and weak rental demand.
Risk: Incorrect property format.
How to avoid: For passive income, select Phuket condominium hotels with proper licenses and professional operators. Residential apartments without hotel licenses can only be rented long-term, reducing yields.
Risk: Flipping (resale before completion).
How to avoid: Flipping can be profitable but risky. Ensure sufficient funds to complete the purchase if resale is delayed or market conditions change.
5. Buying Process for Phuket Real Estate
- Hire a lawyer: This is the most important step. A qualified lawyer specializing in Thai law should conduct due diligence — checking land titles (Chanote preferred), permits, and contracts.
- Check the foreign quota: For condominiums, confirm that the 49% foreign Freehold quota has not been exceeded.
- Reservation: A reservation deposit is paid, typically around 100,000 THB.
- Signing the agreement: A Sale and Purchase Agreement (SPA) is signed, usually accompanied by a 10–30% down payment.
- Funds transfer:
- Freehold (for condominium buyers): Funds must be transferred from abroad in foreign currency and converted into Thai Baht through a Thai bank. This generates a Foreign Exchange Transaction Form (FET), mandatory for Freehold registration at the Land Office. Without FET, foreign buyers cannot legally register Phuket real estate in their name.
- Leasehold (for land or villa leases): For Leasehold purchases, funds can be transferred domestically or paid in cash, with receipts confirming the transaction. Payments may also be made in cryptocurrency if the THB value is fixed and properly documented. Lease contracts exceeding three years must be registered with the Land Office, and all transactions should be fully documented for legal protection.
- Registration: Ownership or lease rights are officially transferred and recorded at the local Land Department office.
Future Outlook for Phuket Real Estate
The Thai government is considering reforms that could further enhance the attractiveness of the Phuket real estate market. Proposed measures include increasing the foreign Freehold quota in condominiums from 49% to 75% and extending Leasehold terms up to 99 years. These changes would strengthen Phuket’s position as a top global destination for property investment.