At present property ownership by foreign nationals in Thailand remains relatively restrictive!
Thai property ownerships laws for foreigners follows 2 simple rules of thumb:
- Foreigners cannot own land.
- Foreigners can buy condominiums (Condos).
This restriction has always been a contentious topic and land ownership by foreign nationals is always the subject of heated and emotional debate!
There has always been a concern from the general Thai public that a liberalization of real estate laws would destabilize the market and result in a foreign “takeover”. Many fear that this shift could potentially affect local buyers and landlords; especially those on the lower-end of the socioeconomic ladder, who are more sensitive to the price fluctuations of land.
This debate is sensitive, nuanced and beyond the scope of this article. However, it is undeniable that these restrictions have always been a “ceiling and limiter” for the Thai real estate market.
With many foreign buyers and investors unwilling or uninterested in buying condominiums due to the lack of control over the land rights.
COVID-19 aftermath: Trying to revive Thailand’s battered real estate industry!
The COVID-19 pandemic and the economic shock it has created for the economy has inadvertently spurred the Thai Government to mull the review of the foreign real estate ownership laws.
The potential amendments and modifications to the current legislation, would in effect stimulate Thailand’s struggling real estate market and help funnel much needed foreign investment into the country.
The review of the current laws by the Thai Government has not been officially announced, however numerous rumors have been circulating in the Thai Press.
Here are the key takeaways of the potential legal changes:
Changes to Condominium Act
Currently the Condominium Act, B.E. 2522 (1979), only allows a “Foreign Quota” of up to 49% of a condominium complex to be owned by foreigners; this could be modified upwards to between 70% and 80% of a condominium.
This amendment would still maintain that only 49% of foreign owners would be granted voting rights in the co-owners’ annual general meetings. This caveat would help sooth critics and ensure protection of Thai interests.
The Thai Land Code currently allows wealthy non-Thai individuals to own land for residential purposes; however, the minimum value of the land needs to be Bt40 million up to a maximum area of 1 rai and a special application needs to be made to the Ministry of Interior. However, this special exemption has largely been beyond the reach of most retail homebuyers and investors.
The proposed changes to the real estate laws could pave the way to foreign ownership of houses in “housing projects” with a value of around Bt10-15 million. These housing projects would be limited to a “foreign quota” where only up to 49% of the project can be owned by foreign nationals.
Land Lease Extensions
According to the Thai Civil and Commercial Code the maximum land lease term is currently only 30-years. This could be extended to 30- 50 years lease terms with renewable rights of 40 years per term.
Will these amendments to Thailand’s real estate laws be confirmed?
All these proposed amendments would be momentous and a positive wide-reaching change for Thailand’s real estate landscape. This could potentially reinvigorate the battered and struggling real estate industry, stimulating an important influx of foreign buyers!
Unfortunately, rumors of changes in the Thai real estate laws have always abounded and this is not the first time these changes are being “reviewed and mulled”. Therefore, whether these amendments are officialized and efficiently implemented is as uncertain as ever.
All we can do for now is wait and see!