Real estate entrepreneurs suggest conditions that would prevent nominees while restricting locations
Real estate entrepreneurs have spoken out about the government’s proposal to extend long-term land lease rights to 99 years for foreigners buying condos and increasing the condo purchase quota to 75%.
They highlight benefits such as investment incentives and economic stimulation but stress the need for strict conditions to prevent nominee issues and putting in place location and voting
rights restrictions.
Issara Boonyoung, chairman of the Trade Association for Real Estate, Design and Construction under the Thai Chamber of Commerce, noted that previous governments have proposed allowing four groups of foreigners—high-wealth individuals, retirees with stable incomes, online workers wishing to reside in Thailand, and experts—to own residential land up to one rai. The Board of Investment (BOI) Announcement 6/2565 allows BOI-approved foreign legal entities to own land for offices and for housing for executives and workers.
This policy, which has been in place since 2001, includes proposals to amend measures allowing foreigners to invest 40 million baht to own up to one rai of land.
“All these measures faced criticism, with many warning they amounted to selling out the country’, even though some had been in effect for a long time. As a result, the government revoked the amendments that would have allowed the four groups to own land.”
The Civil and Commercial Code of 1925 limits leases to 30 years and treats them as personal rights, which end upon the death of either party.
The 1999 Property Lease for Commercial and Industrial Purposes Act allows leases up to 50 years, extendable by another 50 years. This law creates a property right, allowing leases to be inherited, subleased, or mortgaged.
The 2019 Rights over Leasehold Asset Act, is similar to the 1999 Act but limits leases to 30 years and is applicable for various uses. Proposals have been made to extend these lease durations.
For Thai lessees: Allow diverse uses, such as long-term agriculture, permanent forest planting for carbon credits, and residential, commercial, and small industrial purposes, with flexible lease durations based on investment size. As property rights, these leases can be inherited and used as
collateral.
“If there are concerns about Thai nominees leasing on behalf of foreigners for agricultural purposes, restrictions could limit leases to residential use only, although this would disadvantage Thai lessees seeking long-term agricultural and other investments,” Issara said,
For housing projects for low-income earners on state or private land, long-term leases exceeding 30 years can be used as mortgage collateral with financial institutions due to their sufficient duration, maintaining the lease’s value.
For foreign leases, the conditions are as follows:
Limit the leased area to a maximum of 1 rai.
The land must be used for residential purposes only. If construction or occupancy does not occur within three years, the highest land tax rate of 3% per year will be applied to prevent speculation.
Set higher registration fees and annual taxes for foreigners compared to Thai citizens.
The revenue from these measures can be used to establish a housing fund for low-income individuals, supporting initiatives like zero-interest loans for the first three years, mortgage insurance funds, or direct housing purchase subsidies for low-income earners.
“Extending lease durations beyond 30 years and up to a maximum of 99 years is a matter the House of Representatives must consider carefully, weighing the benefits and drawbacks of such extensions,” Issara said.
Source: The nation
