How to Calculate Long-Term Land Lease Rates, Key Money (Premium), and Agent Commissions

🏡 How to Calculate Long-Term Land Lease, Key Money, and Commission in Thailand

A guide to understanding rent pricing for long-term land leases (e.g., 20 years), key money, and agent commissions—complete with formulas and examples.

🧮 Q1: How to Calculate Monthly Rent for Long-Term Land Lease?

1. Find the market selling price per square wah (Thai land unit) in the same zone or nearby.

   • Use real estate websites to estimate this.

   • Example: Land price = 300,000 THB per sq.wah

   • For 800 sq.wah (2 rai):
     300,000 × 800 = 240 million THB (land market value)

2. Determine rental value based on a percentage of land price

   • For long-term leases, use 40%–60% of the land’s value.

   • For a 20-year lease, assume 50%: 50% of 240M = 120M THB over 20 years

3. Convert to annual and monthly rent

   • Annual: 120M ÷ 20 = 6M THB/year

   • Monthly: 6M ÷ 12 = 500,000 THB/month

📌 Formula:
(Land Sale Price × 40–60%) ÷ Lease Years ÷ 12 = Monthly Rent

💰 Q2: What is “Key Money” (ค่าแป๊ะเจี๊ยะ) and How to Calculate It?

Key money (or premium) is a one-time payment to compensate the landowner for the opportunity cost of locking their land.

• Not fixed by law—usually ranges from 10%–30% of land value

• Based on lease duration:

  • 10% for 10 years

  • 20% for 20 years

  • 30% for 30 years

📌 Example:
If land price is 240M THB and lease is for 20 years:
20% × 240M = 48M THB as key money

🧾 Real Estate Agent Commission for Long-Term Land Lease

There are two scenarios:

Case 1: With Key Money

• 5% of key money

• Plus 2 months of rent

Example:

• Key Money = 24M → 5% = 1.2M

• 2 months rent = 500k × 2 = 1M

• Total commission = 2.2M THB

Case 2: Without Key Money

• 2% of total lease value over the entire lease period
  (e.g., 500k/month × 12 months × 20 years = 120M)

• 2% of 120M = 2.4M THB

📝 Legal Notes & Fees

• Long-term leases must be registered with the Land Department.

• Registration fee: 1.1% of the total rent over the lease period.

• Avoid doing “3+3+3” years (rolling leases) to skip fees—if a legal issue arises, the law only protects the first 3 years.

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