Thai cabinet’s controversial plan to attract wealthy foreigners by offering them the right to own property

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Thai cabinet’s controversial plan to attract wealthy foreigners by offering them the right to own property

Selling the family silver?

Bangkok Post Editorial

The cabinet’s plan to launch a scheme to attract wealthy foreigners for long-term stays in the country by offering them the right to own property is controversial as many critics brand it as a khai chart [traitorous] idea.

The proposed benefits include a 10-year Thai visa. They will be exempt from reporting their address every 90 days, will gain a tax exemption for income earned abroad, and ownership rights to condos and private residences in designated housing projects.

The government targets four groups — wealthy foreigners, wealthy pensioners, so-called digital nomads who are interested in working remotely from Thailand, and highly skilled professionals. The target is to attract one million of those foreigners and earn one trillion baht from their spending in five years.

State agencies have been assigned to study the law changes needed to put the plan into effect, particularly the property ownership aspect of the package. Under the proposed amendment, the foreign ownership proportion of a condo would be expanded from 49% to 70-80%.

Foreigners would be allowed to buy a house with worth 10 million baht upwards, with the proviso that it not exceed 49% of the value of the project. Property leases which foreigners can take out would be extended to 50+49 years, up from 30 years currently.

The move has sparked criticism. Many claim it is tantamount to selling the nation, a metaphor for traitorous behaviour. They say it is like stealing the country’s treasures or family silver and giving them to foreigners.

They say housing inequality remains a problem because some Thais do not own their own homes. Given this, they ask how the government can offer such an opportunity to foreigners. “One day, Thai people will have to lease houses and land in the country from foreigners,” they said. The arguments sound quite convincing from a nationalist perspective and could flare up if the government fails to provide a good explanation to ease public concerns.

That said, accusations the government is selling out the country are exaggerated. Bluntly speaking, whether housing inequality is addressed or not has nothing to do with this scheme. Even without incentives being offered to foreigners, inequality would not magically be solved.

The phrase khai chart was used decades ago against the Thaksin Shinawatra administration when it proposed extending land leases for foreign investors to 99 years. But similar privileges were finally offered by this government for foreign investment under the Eastern Economic Corridor (EEC).

As a matter of fact, Thailand has to compete with countries around the world to attract foreign capital, so competitive incentive schemes are needed. In Asia, countries which offer limited ownership in land and property to foreigners include Vietnam, Malaysia, Cambodia, Singapore, The Philippines, South Korea, Japan, Taiwan, Oman, Bahrain, and the United Arab Emirates. Many Western countries also allow foreigners to buy properties.

In a fast-changing world and economy, ownership right incentives for foreigners should be debated, not denounced with kneejerk reactions such as as khai chart. However, if the government is determined to push for the property ownership scheme, it must also do more to promote fair land distribution and a national plan to deal with housing inequality in the country.

Details of the proposal must be clearly aired for public debate and changes should proceed through the normal parliamentary process, not imposed via a short-cut with a royal decree.