The COVID crisis and all its negative effects have pushed the Thai government to search for an economic solution, some of which involves foreign investment. Laws and regulations on land ownership for foreigners could, if the value of the house and land is at least 10 million THB, allow foreigners to buy and own a house, including the land on which the house is built. Also, the quota of condominium units that foreigners can own is expected to be increased from the current 49%.
Furthermore, the maximum terms for land leases are planned to be increased significantly. Please find below a summary of these items:
1-Condominium Act amendments
The Condominium Act, B.E. 2522 (1979), as the law currently stands, only allows a maximum of 49% of the area to be owned as freehold by foreigners, the remaining only by leasehold. This limit could be lifted to between 70% and 80%. The other side of the coin is that the right to vote for foreigners shall be limited to a maximum of 49% of foreign owners at owners’ meetings. This limitation on voting rights is to protect Thai interests. What if foreign lessees obtain from their Thai lessor their right to vote?
2-Land ownership and Land Leases
Currently, land ownership is possible only for residential purposes and for investments of more than 40 million THB, provided that, through the Board of Investment, investments concern some designed targets (Section 96 bis of the Land Code Amendment Act (1999)).
The proposal is to decrease the minimum investment to between 10 and 15 million THB.
However, this lower range will only affect properties in housing estates, in which foreigners may then be allowed to buy no more than 49% of the houses in the respective housing development. A kind of transposition of the condominium quota to land and houses.
There are also proposals to increase land lease terms from 30 to 50 years, with the option to extend another 40 years.
Whether it is a true will for change or simply an empty announcement, no one knows, but this can help improve the economic situation and attract foreign investment. Shall become a reality, we will make a new article to inform you and explain the roundabout. If you are in need of a real estate lawyer or for more information, feel free to contact us at any time.