BANGKOK — The Cabinet Secretary’s office announced urgent measures to stimulate the economy through the real estate sector to the Interior minister on June 21, 2024. It is aimed at easing regulations for foreign ownership.
This follows a letter from the Cabinet Secretary on April 9, 2024 in which it reiterated the Cabinet’s decision to boost the economy through the real estate sector and make preparations to make Thailand a global industrial hub.
At the Cabinet meeting on June 18, Deputy Prime Minister Phumtham Wechayachai proposed on behalf of the Prime Minister to implement the Cabinet resolution of April 9, 2024. The resolution instructed relevant agencies to consider appropriate measures to stimulate the macroeconomy and attract major investors to Thailand by facilitating the work of potential foreign professionals.
He said that this matter is a proposal that has been submitted to the government, so it has been sent for study. It has not been approved in any way. He is merely pushing for the study’s conclusions to be reached quickly, because without conclusions, there can be no decision.
The Ministry of the Interior reports that it has been asked to examine the feasibility of the following measures:
- Review the duration of property rights under the Property Rights Act 2019 so that property rights can be extended up to 99 years.
2. Review the regulations and laws relating to foreign ownership of condominiums and increase the permitted percentage from 49 percent to 75 percent.
It was noted that this measure may include conditions relating to the management of legal entities in condominiums, such as restricting the voting rights of foreigners and foreign legal entities that acquire property in excess of the 49 percent limit.
If it is necessary to enact or amend laws to facilitate these measures, the Ministry of Interior is instructed to complete the legal procedures immediately and strictly comply with the relevant laws, regulations, and directives.
The Cabinet has reviewed and approved the Deputy Prime Minister’s proposal. Therefore, the Ministry of Interior is requested to implement the relevant aspects of the Cabinet’s decision.
Prachachat Business reports that this government policy consideration aligns with the demands of 7 real estate associations who jointly signed and sent a letter to the Director-General of the Department of Lands, Ministry of Interior, and also informed the Prime Minister, to follow up on the progress of proposals to amend two real estate laws: the Property Rights Act and the Condominium Act.
Mr. Isara Boonyoung, Chairman of the Real Estate, Design and Construction Trade Association Committee of the Thai Chamber of Commerce, said that extending the lease to 99 years would benefit both Thai and foreign investors.
“With 30-year land leases, when used as loan collateral, banks are reluctant to provide much credit, possibly only 50-60%. However, if the lease period is extended to 99 years, leased land can be used as business collateral equivalent to freehold land,” he said.
He added that leasing behavior is dictated by landowners from the outset. That is, state-owned freehold land cannot be sold or transferred and can only be leased. As for private land in expensive areas, prime locations costing 2-4 million baht per square wah, owners opt not to sell and choose to lease instead.
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