The Thai government plans to increase the maximum land lease term to 99 years and allow foreigners to own up to 75 per cent of condominiums.
On 21 June 2024, Thailand’s Office of the Cabinet Secretary announced urgent measures to stimulate the economy through the real estate sector. These measures aim to relax the country’s foreign property ownership rules.
The decision followed a letter from the Cabinet Secretary dated 9 April 2024, highlighting the government’s intention to stimulate the economy through the real estate sector and prepare Thailand to become a global industrial hub.
At the Cabinet meeting on 18 June, Deputy Prime Minister Phumtham Wechayachai, on behalf of the Prime Minister, proposed implementing the 9 April 2024 resolution. The resolution instructed relevant agencies to consider appropriate measures to boost the macro-economy and attract significant investors to Thailand by facilitating potential foreign professionals.
The Deputy Prime Minister emphasised that this is only a proposal sent to the government for study and has yet to be approved. He only insisted that the survey be finalised as soon as possible as no decision can be made without the findings.
The Ministry of the Interior says it has been instructed to study the feasibility of the following measures:
- We are revising the title term under the Title Act 2019 to extend the title to 99 years.
- We are revising the rules and laws relating to foreign ownership of condominiums and increasing the permitted percentage from 49 to 75 per cent.
This measure may include conditions related to the management of legal entities in condominiums, such as limiting the voting rights of foreigners and foreign legal entities acquiring properties above the 49 per cent limit.
Suppose laws need to be enacted or amended to implement these measures. In that case, the Interior Ministry is instructed to immediately complete legal procedures and strictly comply with relevant laws, regulations and directives.
The Cabinet has reviewed and approved the Deputy Prime Minister’s proposal. Thus, the Home Ministry must implement the relevant aspects of the Cabinet decision.
Prachachat Business publication reports that this consideration of government policy is in line with the demands of 7 real estate associations, which jointly signed and sent a letter to the Director General of the Land Department of the Ministry of Home Affairs and informed the Prime Minister on the progress of the proposals to amend two real estate laws: the Title Act and the Condominium Act.
Isara Bunyong, chairman of the Real Estate Trade, Design and Construction Association Committee of the Thai Chamber of Commerce, said extending the lease term to 99 years would benefit Thai and foreign investors.
“With a 30-year land lease, when it is used as collateral for a loan, banks are reluctant to provide a large loan, perhaps only 50-60 per cent. However, if the lease is extended to 99 years, the leased land can be used as collateral for a business equivalent to land owned,‘ he said.
He added that leasehold behaviour is dictated by landowners from the outset. Government-owned land cannot be sold or transferred and can only be leased. As for private land in expensive areas, attractive locations worth 2-4 million baht per square foot (about 4 square metres), owners prefer to lease rather than sell.
Thailand has long been a popular destination for foreign property investors, especially from China, Hong Kong and Singapore. These new measures could further boost foreign investment inflows into the country’s property sector.
Extending the lease term to 99 years is a significant step for Thailand, as most Southeast Asian countries have a maximum lease term of 70-80 years for foreigners. Increasing the permitted foreign ownership of condominiums from 49 to 75 per cent could lead to higher property prices in areas popular with foreigners, such as Bangkok, Pattaya, and Phuket.
The proposed changes to Thailand’s property laws are part of the government’s efforts to stimulate the country’s economy and attract foreign investment. When implemented, the measures will significantly change the landscape of Thailand’s property market and open up new opportunities for both Thai and foreign investors.
More Articles Here
More Articles Here
