Thai real estate reforms: save the country or sell it off?
Calls for modernization of Thailand’s strict foreign ownership laws are growing louder. Former prime minister and unofficial government adviser Thaksin Shinawatra recently stressed the need to make the property market more accessible to foreign investors. He advocates raising the foreign ownership quota for condominium units to 75 percent and extending the maximum lease term from 30 to 90 years. These reforms are seen as an opportunity to give the Thai economy a much-needed boost and revitalize the property market.
Current restrictions and economic impact
Currently, only 49 percent of apartments in a building are allowed to be owned by foreigners. This policy is intended to ensure Thai majority control. Land leases, such as those for villas, are limited to 30 years, which is intended to prevent foreign ownership from passing through generations. While these laws protect national interests, critics say they hamper foreign investment in the real estate sector. The Thai economy is struggling with low growth, and reforms are seen as necessary to generate additional revenue and stimulate the market.
Concerns about “selling the land”
Traditional circles in Thailand are concerned that relaxing property laws could lead to a loss of control over local communities. They fear that foreign investors could dominate entire parts of cities, causing property prices to rise. A similar situation occurred in Canada, where a rapid influx of foreign buyers disrupted the housing market. In Thailand, such scenarios could lead to social and economic tensions.
Complex reforms ahead
According to the Housing Business Association (HBA), any reforms will have to be carefully designed. Some of the proposals include:
- Quota extension with conditions: The foreign ownership quota could be increased, but only for apartments with a minimum sales price of 10 million baht and in cities already popular with foreigners, such as Bangkok, Pattaya and Phuket.
- Tax measures: Increasing taxes on foreign owned units to generate more revenue.
- Limitations on influence: Foreigners should not be allowed to sit on legal committees of apartment complexes, to safeguard the Thai majority.
Amendment of land lease laws
A new legislative basis is proposed for land leases. Key points are:
- Prohibiting illegal structures such as nominated shareholders.
- Strict urban planning and zoning frameworks to prevent uncontrolled land acquisition.
- A maximum surface area of 4 rai per lease to prevent abuse by foreign companies.
History of real estate reforms
Attempts to relax property laws are not new. In 2014, the military-backed government approved a scheme allowing foreigners to buy a rai of land with an investment of at least 40 million baht. However, this measure was reversed after fierce protests from various quarters, including the current ruling party Pheu Thai. This illustrates the sensitivity of the issue within Thai society.
The way forward
While reforms may be on the parliamentary agenda in 2025, the details remain crucial. The balance between attracting foreign investment and protecting national interests is complex. The success of any legislative changes depends on careful consideration and effective regulation. Thailand faces the challenge of making its real estate market more attractive without losing control over its territory.
Source: Pattaya Mail
What am I reading now? 'Thailand faces the challenge of making its real estate market more attractive without losing control over its territory.'
And how do other countries do that? As a foreigner you can buy/build land, house, factory in NL but it stays in NL and NL laws continue to apply. I don't understand Thailand's concern. But it will probably be the ultras who have a much too big finger in the pie in Thailand. Those ultras are xenophobic; you are tolerated because you have money as long as you don't get too close.
I understand the fear that the country will be sold out and prices will be so high that the average Thai can't buy anything. But isn't that the case now?
Well, this question has been around for as long as I have known this country and that is more than thirty years. This is the umpteenth proposal and here too nothing will come of it…
I think what they are looking for is an arrangement where you spend much, much more money without having a say,
You remain a long-term tourist, and certainly when simply buying and registering at YOUR place of residence you could claim a permanent right of residence, and thus jeopardize the existing residence arrangements with all their stamps and rules + money as a deposit,
I just think so, but I'm no expert in this field.
Current…read Thai…owners are benefiting from an increase in prices…many will suddenly be rich…on paper, that is.
I would not put a factory in Thailand as a company if I did not own the land. A bit of a communist idea…but their country is good.
It was an idea of the Minister of Finance. Money is needed. The economy needs to be stimulated. Foreign investors attracted. But how? Well, for example by extending leasehold contracts. The purchasing power of the Thai itself is stagnating. That of the foreigner can offer an alternative. Actually, it is an idea of Thaksin much earlier: he stated that a Thai who wants to sell land to a foreigner must first do so to the Thai state, which then leases it to that foreigner on a long-term lease, something like 99 years. When the lease is finished, the Thai state simply still owns the land.
But a better idea is of course Another idea is to modernize legislation around the lease of land. The Civil and Commercial Code only allows for 30 years of lease. That should indeed be able to be extended to 99 years. A study in that direction is underway, but there is also a lot of resistance, because of the fear of a sell-off of Thai land. A second law, that on Leasehold Assets, is also under investigation, and then there is a third law, that on Rights of Use of Leasehold Assets. All these laws do not make the matter clearer. One concerns the contract that is lease, another specifies how to use it, and yet a third about who can derive rights from it. For example, if a mortgage is required with the land as collateral. It is all going to take a while now.
https://www.bangkokpost.com/property/2903173/luring-foreigners-to-real-estate?utm_medium=related&utm_source=article_business&utm_campaign=click-within-bp
now i do ask myself a question; how can you claim in gods name that you buy land in thailand and sell it to someone else that the land is no longer thailand's? land remains land, i would rather worry about the building that is on it. no matter where in the world, land always remains the property of the country, you are never the owner of the land, not even in europe, because you pay your taxes on it every year, the same with your building by the way. that is also one of the reasons why i don't want property in the european community, you are not the owner, you are only a sponsor of the state.
After purchasing land and owning it, you should not think in terms of taking the land with you in your back pocket. The Thai certainly do not think that either. They are really not afraid that you will run off with Thai land and place a purchased plot of Thai land in the Netherlands. Of course, purchased or sold land will remain in Thailand. A bit simplistic on your part. That is due to a wrong idea of the concept of 'ownership'. Ownership (legal ownership) is the most far-reaching right that one can have on a thing. It is the right of 'say'. Within the framework of legislation, you are the first to determine what happens to your property. You have more say over a 'property' than anyone else. It is the right to dispose of a thing (piece of land, object, amount of money, etc.) at your own discretion. What Thailand does not want is for a foreigner to have ultimate control over a piece of land. That scares Thailand off. Thailand thinks that by selling land, control is placed in the hands of a foreigner. That control can be reclaimed by expropriation, but then you need legal constructions again and that becomes complicated. Preferably with one legal provision land and control back, for example the provision in Land Code section 86. That states that land purchase by a foreigner is only possible on the basis of a treaty with that foreign country. The point is that no treaty has been concluded with any foreign country. Ergo: no foreigner can purchase land.
Thaksin thought he could attract additional investment by offering land ownership (not ownership) via the Thai state via leasehold for 99 years. But there is some legislation blocking that. That is now under investigation.
oops…
“that is also one of the reasons why I do not want property in the European Community, you are not an owner, you are only a sponsor of the state.”
And when you pay your sky-high rent every month, who do you sponsor?
My response is to Gislain….
“that is also one of the reasons why I do not want property in the European Community, you are not an owner, you are only a sponsor of the state.”
And when you pay your sky-high rent every month, who do you sponsor?