Property ownership by foreign nationals in Thailand remains relatively restrictive.
Thai property ownerships laws for foreigners follows 2 simple rules that you should be aware of:
- Foreigners cannot own land
- Foreigners are allowed to buy condominiums (Condos)
This restriction has always been in place and land ownership by foreign nationals is not permitted under current laws.
There is a concern from the general Thai public that a liberalisation of real estate laws could undermine the market and result in a takeover by foreigners. Many fear that this shift could potentially affect local buyers and landlords, especially those on the lower-end of the socio-economic ladder, who are more sensitive to the price fluctuations of properties and land.
This is a sensitive debate that has undeniably created a ceiling and limiter for the Thai real estate market.
Many foreign buyers and investors are unwilling or uninterested in buying properties due to the lack of control over land rights/ restrictions.
COVID-19 aftermath – Reviving Thailand’s real estate industry
The COVID-19 pandemic and the economic shock it created has spurred the Thai Government to consider ways to review the foreign real estate ownership laws.
The potential amendments and modifications to the 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 was officially announced, however numerous updates have been circulating in the Thai Press.
Key takeaways of the potential legal changes
The Condominium Act
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 THB 40 million up to a maximum area of 1 rai and a special application needs to be made to the Ministry of Interior. 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 THB 10-15 million. This housing projects would be limited to a “foreign quota” where 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 30-years. This could be extended to 30-50 years lease terms with renewable rights of 40 years per term.
When these amendments to Thailand’s real estate laws be confirmed
All these proposed amendments could provide a positive change for Thailand’s real estate landscape. This could reinvigorate the real estate industry, stimulating an important influx of foreign buyers.
However, changes in the Thai real estate laws have always abounded and this is not the first time these changes are being “reviewed and mulled”. Whether these amendments are confirmed and efficiently implemented is a matter of time.
Fresh Property is an established real estate agency offering client sales, rental and property management services.