The Thai Cabinet has made a decisive move to improve the economy by relaxing regulations on foreign ownership in the real estate sector. On June 21, 2024, the Cabinet Secretary’s office announced urgent measures aimed at stimulating the economy through real estate investments. These measures include extending property rights and increasing the percentage of foreign ownership in condominiums, making Thailand an even more attractive destination for international investors.
Proposal to extend property rights to 99 years
One important proposal is to extend property rights under the Property Rights Act 2019 from the current maximum duration to 99 years. This significant change aims to attract more foreign investors by providing a longer tenure of property rights, which can enhance the security and value of their investments. For example, longer leases will allow properties to be used as collateral for loans more effectively, potentially increasing the amount of credit that banks are willing to offer. This extension is expected to make Thai real estate more competitive on the global stage and provide a stable investment environment.
Foreign ownership in condominiums increased to 75%
The government is considering revising regulations regarding foreign ownership of condominiums. Currently, foreigners are allowed to own up to 49% of the total floor area of a condominium building. The proposed change would raise this limit to 75%, significantly expanding the market for foreign buyers. However, there may be conditions, such as limiting the voting rights of foreigners and foreign entities in condominium management, to balance this increased foreign ownership. This adjustment aims to protect local interests while still promoting foreign investment.
Government and industry support
The proposed measures have received support from various stakeholders, including seven real estate associations that have long advocated for these changes. Industry leaders, such as Mr. Isara Boonyoung, Chairman of the Real Estate, Design, and Construction Trade Association Committee of the Thai Chamber of Commerce, have emphasized the advantages of extending lease periods.
Boonyoung noted that longer leases, like the proposed 99-year duration, would make leased land more viable as business collateral, similar to freehold land. This change is expected to benefit both Thai and foreign investors by providing greater flexibility and security in property transactions.
Immediate implementation and legal compliance
In order to ensure that these measures are implemented promptly and effectively, the Ministry of Interior has been directed to promptly complete all necessary legal procedures. This includes reviewing and potentially amending existing laws and regulations to accommodate the new policies. The Ministry is also expected to ensure strict compliance with relevant laws, regulations, and directives to facilitate a smooth transition and prevent any legal ambiguities.
As Thailand aims to establish itself as a global real estate hub, these changes are expected to draw in a fresh influx of international investors, further boosting the economy and spurring growth in the real estate sector.
2 Responses
Would that apply for existing leaseholds?
It’s not exactly sure yet, but there’s a change you’ll need a new agreement.