As another clear indication of the totally unpredictable nature of the current U.S. administration, yesterday (just halfway through the 90-day pause on its proposed global tariff increases, a period that was supposed to keep any changes in check) the government threatened to impose a 50% tariff on goods from the European Union. Blaming a lack of progress in trade negotiations, Donald Trump stated: “Therefore, I am recommending a straight 50% Tariff on the European Union, starting on June 1, 2025.” (Source: CNN).
This comes despite the administration having officially announced a rollback to a uniform 10% tariff from April 9th, intended to create a three-month negotiation window, a move widely seen as an effort to calm chaotic financial markets.
Adding further to the volatility, Apple was also warned that its devices would face a 25% import tax if not manufactured in the United States. While the general consensus is that both of these threats are primarily negotiation tactics, the fact remains: the effects on global markets are chaotic. Policy direction appears reactive, inconsistent, and often contradictory.
Following these announcements, financial markets reacted immediately, with European stock indices falling sharply and the U.S. dollar weakening amid mounting concerns over government debt and trade instability.
In this article, we examine the challenges facing Koh Samui’s property market in 2025, both from macroeconomic instability and from uncertainties regarding the regulations concerning foreign ownership of property in Thailand.
A Resilient, Cash-Based Market Structure
In response to pending tariff increases, along with general market volatility standing from the unconventional behaviour of the US administration, GDP forecasts around the world have been revised downward. However, the property market in Koh Samui remains fundamentally strong. It is underpinned by tourism and sustained by high-net-worth individuals, second-home buyers, and lifestyle-focused investors.
Crucially, the residential property market in Koh Samui is almost entirely cash-based. The vast majority of buyers are foreign nationals, who are unable to obtain mortgages from Thai banks. As a result, property transactions are not exposed to interest rate fluctuations or shifts in local lending criteria. In the luxury segment, the proportion of cash buyers is even higher. Thai buyers in this price range tend to rely less on credit, while foreign investors who do borrow typically do so in their home countries — meaning the loan is not secured against the Thai property itself. Consequently, only a small minority of luxury transactions involve any form of financing.
As long as buyers continue visiting the island, which they have done in steadily increasing numbers since the post-Covid reopening, history suggests that demand is likely to remain strong. Koh Samui’s rapid rebound following the lifting of border restrictions illustrates this clearly. Because many properties are second homes, buyers tend to be financially secure and less sensitive to short-term macroeconomic fluctuations
Legal Uncertainty Around Villa Ownership
In 2024, the Thai government instigated a significant crackdown on the use of nominee structures and holding companies to acquire land or villas. While the Thai law has not changed, enforcement has. Foreign buyers can no longer use nominees to meet the minimum Thai shareholder requirements. Likewise, Thai companies can no longer be used simply as vehicles to hold freehold villas.
It is still possible to set up a legally compliant Thai company to purchase property in Koh Samui, but the company must operate as a genuine business, typically generating income through rental activity. This route is now more complex, expensive, and viable mainly at the luxury end of the market. At lower price points, it is often no longer practical.
Limited Freehold and Branded Alternatives
Unlike Phuket, which has a diverse supply of freehold condominiums across a wide range of price points, from entry-level up to many millions of dollars, Koh Samui has very few such alternatives. At present, only two notable mid-market freehold condo projects have launched in recent years: Anava on Ban Rak Beach and Wing Samui in Bo Phut. There are no luxury-grade freehold condominiums currently on the market.
In Phuket, foreign buyers concerned about villa ownership structures can pivot into freehold condominiums or branded leasehold projects with more confidence. Branded developments carry additional credibility because their operators have reputations to protect. This adds perceived security to lease renewals. Koh Samui, by contrast, has very limited branded residential stock and fewer international or proven developers.
Developer Response: Leasehold Adaptation
In response to both the legal crackdown and the lack of viable freehold alternatives, many developers in Koh Samui have shifted toward offering villas on 30-year leasehold terms. Because the tenure is shorter, these properties are typically priced lower to reflect the limitation.
It’s increasingly common for villas to be marketed with both options: leasehold and, where feasible, freehold via a Thai company. In some cases, developers also offer the possibility of converting a leasehold purchase to freehold in the future. This gives buyers a measure of flexibility to accommodate changes in personal circumstances or legislation. For example, a prospective buyer who later marries a Thai national may wish to register the freehold in their spouse’s name.
Looking Ahead: Strengths and Weaknesses
Looking ahead, the greater risk to Koh Samui’s property market does not stem from macroeconomic downturns, unless such downturns result in a sustained decline in tourism or a significant reduction in infrastructure investment and maintenance. As long as the island remains attractive and accessible, demand for lifestyle-driven property is likely to remain strong.
The more immediate concern is the lack of secure, high-quality alternatives to freehold villas. The limited number of freehold condominium projects, the absence of branded residential stock, and the shortage of properties available on renewable leases within projects by well-established developers all reduce the market’s ability to absorb demand. This restricts the ability of prospective freehold villa buyers to switch assets when seeking legal clarity and long-term ownership security.
Noting the above concerns, the market’s strengths remain clear: cash-based resilience, lifestyle appeal, and consistent performance through multiple global crises, demonstrated most recently by the rapid recovery following Covid and the inflationary shock triggered by the war in Ukraine. Koh Samui continues to offer long-term value to well-capitalised buyers seeking lifestyle investment in a leading resort destination that combines global appeal with tropical island charm, and remains partially insulated from short- to medium-term financial volatility.
