The Supreme Court has confirmed what Phuket’s land offices already assumed: a lease is worth exactly its registered term, no more. For buyers treating renewal as a formality, that assumption now needs correcting.
A leasehold contract in Phuket is worth exactly what is written on the title deed, no more. Section 540 of the Civil and Commercial Code has always capped a lease at 30 years. The workaround built around that cap, decades of “30+30+30” contracts promising two further renewals on top, stopped working in March 2025, in a case that began on this island and ended at the Supreme Court.
For a market that has sold tenure security as a marketing line for years, that distinction matters. It separates a document a bank will lend against from a private understanding that depends on a landowner’s goodwill twenty or fifty years from now.
What actually happened
Supreme Court Judgment No. 4655/2566 concerns a Phuket lease signed in 1990: a registered 30-year term, plus a same-day side letter promising two further 30-year renewals, with rent for all ninety years paid upfront in a single sum. When the registered term expired around 2020, the landowner declined to honour the renewal. The case reached the Supreme Court, and the judgment, handed down 18 March 2025, sided with the landowner.
The reasoning is worth reading closely, because it forecloses the obvious workaround too. The Court went further than declaring the renewal clauses unregistered, it declared them void, an attempt to construct a single ninety-year lease that Section 540 does not allow, however the paperwork is arranged. Prepaying the rent, the Court held, was evidence of intent to evade the cap. It ordered the lessee to vacate and pay damages until compliance.
Leases still inside their first term are untouched. The ruling removes only the assumption that a second or third renewal is a formality rather than a fresh negotiation the landowner is free to decline.
The Nordic parallel, and where it breaks down
For a Swedish or Finnish reader, the nearest domestic equivalent is tomträtt, Sweden’s system of site leasehold on government-owned land. A tomträtt holder has a genuinely secure, registered right to the land, but the financial terms are revisited on a fixed statutory cycle, not guaranteed to stay favourable indefinitely. The parallel that matters is structural: a registered term is real property, and everything promised beyond it is a separate negotiation, not an extension of the same right.
The Thai version is materially worse for a buyer in what backs that second negotiation. Tomträtt’s revision happens through a government process with published rules. A Phuket renewal beyond the first 30 years depends entirely on one landowner’s willingness twenty or thirty years from now, with nothing beyond a side letter that Thai courts have now confirmed carries no legal weight. Treat any pre-agreed renewal here with more scepticism than a Nordic reader would extend to an informal promise about a future tomträtt rate, not less.
The enforcement backdrop
Phuket is where this precedent originated, and it is also one of eight provinces the Department of Lands named in a May 2026 enforcement drive against nominee landholding structures, the corporate vehicles that often sit behind foreign leasehold and villa arrangements. Every land office had to audit its landholding companies for foreign shareholding risk by the end of June 2026. Thairath and The Phuket Express have reported several hundred companies identified province-wide and a first tranche of prosecutions, figures that come from journalism, not yet from a single consolidated Department of Lands statement, worth noting as the province works through its backlog.
That enforcement targets nominee ownership under the Land Code, a different legal question from an ordinary registered lease. But the two meet where a leasehold villa sits behind a company with a shareholding structure that will not survive scrutiny, and a confirmed nominee arrangement can now trigger a forced sale of the underlying land within 180 to 365 days.
What has not changed, despite the marketing
Proposals to extend Thailand’s maximum lease term to 99 years have circulated since 2024. The government shelved the most advanced version, an amendment to the Rights Over Leasehold Asset Act, in September 2025, and it is not before parliament. No amendment to Section 540 has reached the Royal Gazette. Any 2026 listing advertising a 90-year or 99-year lease is describing a legal position that does not currently exist, whatever the brochure says.
The trade-off, plainly
The honest way to price a Phuket leasehold is around its registered term alone. A 30-year lease with 25 years remaining is a 25-year asset, not a 25-plus-implied-60 asset. That is a real constraint against freehold ownership elsewhere, and it is the correct reason leasehold villas trade at a discount to comparable freehold property in markets that allow it.
Against that: the discount is real too, and for a buyer who wants twenty to thirty years of use rather than a multi-generational asset, that trade can still make sense, provided the price reflects the actual term and not the marketed one. The mistake this ruling closes off is paying freehold-adjacent prices for a right that was never more than thirty years long.
For anyone weighing a leasehold purchase now: structure the deal and the price around the registered term only, have independent Thai counsel check the landholding company’s shareholding before signing, and treat any renewal promise as exactly what a Thai court now says it is, a courtesy the current owner may or may not extend, not an asset.