Extending Foreign Leasehold Ownership A Better Option in Thailand than allowing foreigners to buy land
THE head of a real estate association today (Nov. 4) said allowing foreigners to buy one rai of land under a new ministerial regulation still being vetted is unlikely to motivate them to do so because of difficult procedures and it would be better to extend their leasehold rights from 30 to 50 years, Matichon newspaper said.
The Cabinet greenlighted a draft ministerial regulation on Oct. 25 that will enable foreigners to buy a maximum of one rai of land in Thailand. One of the conditions includes an investment value of at least 40 million baht that must be retained for three years, NNT said.
This ministerial regulation designates four types of high-potential aliens who will be able to acquire land in Thailand for residential purposes.
The four categories include high-wealth persons, retirees, individuals who intend to work from Thailand, and specialists who possess certain skills. The amount of land that may be acquired shall be no more than one rai (1,600 square metres). The land must only be used for self-residency and must be located within Bangkok, Pattaya, municipalities, or other suitable areas as stipulated by the urban planning law. The alien acquiring land must invest no less than 40 million baht in a business or enterprise and retain the investment for at least three years.
However Mr. Issara Boonyang, chairman of the Association of Real Estate Business, Design and Construction, the Thai Chamber of Commerce, said implementing this regulation would be akin to utilising an existing ministerial regulation issued in 2002 which did not draw many foreign buyers with information from the Land Department showing that from 2002 to 2022 only eight foreigners exercised their rights to do so.
Currently two laws govern foreign leasehold of Thai property with the first being the Lease of Immovable Property for Commercial or Industrial Purposes Act of 1999 that grants a maximum lease term of 30 years if the lease has an industrial or commercial purpose. After this initial term, an extension of 30 years is possible.
The second is the Rights over Leasehold Asset Act B.E. 2562 (2019) which sets the lease at maximum 30 years but the leasee can rent out his property to others and pass on the rights to their heirs.
“In the past the private sector proposed to the government to consider amending the existing law and extend the lease period from 30 to 50 years like in some other countries to make it more worthwhile.
“If the government does not push through the new ministerial regulation that has been greenlighted by the Cabinet and moves on leasing, then it has to be studied whether an additional ministerial regulation or other legal steps should be taken but a ministerial regulation is a lot quicker,” he said.
Issara added that he personally sees that it would not be easy for foreigners to obtain land ownership rights under the new ministerial regulation.
However, granting long-term visas to the four groups of foreigners to stay in Thailand for a longer period of 10 years would be effective in drawing investment and stimulating the economy.
Yet for this measure to be effective the housing cost must be set. For example the price should be over 5 million baht to get this visa with those buying property for 1 to 2 million baht not granted the right. An additional announcement is all that is required set this criterion.
Where leaseholds are concerned, a regulation already exists there is no need to issue a new one, he pointed out.
Source: https://thainewsroom.com/2022/11/04/private-sector-extending-foreign-leasehold-ownership-a-better-option/
