In its aim to boost foreign property investment, the Thai government is currently studying the option of granting foreigners the right to buy houses through a 50-year leasehold contract for the land they are built upon, and also to sell leased land.
Currently, residential leasehold contracts for houses, villas and other standalone property are limited to 30 years – which is on the lower end of the ASEAN ranking – and leasehold titles cannot be traded. They can be extended by another 30 years, but this is at the discretion of the land owner and there is no automatic right to it. Only land for commercial use can be leased for a period of 50 years, and up to 99 years in free economic zones.
At present, just condominiums can be bought, fully owned and sold by foreigners in Thailand, but only in buildings that fall under the so-called condominium law which requires a 51% majority ownership by Thai citizens in the residential space in such a building.
A 50-years residential lease for land, plus a possible extension, in the eyes of the Thai government would help boost demand for the country’s property sector, finance minister Apisak Tantivorawong said.
“If we can do it, the property industry will boom again because demand will come from all over the world,” he stated, hinting at the boom a prosperous Thailand experienced before the Asian financial crisis hit in 1997.
With the amended leasehold law, Thailand would catch up to its ASEAN peers.
Singapore and Malaysia lead the way in the region in terms of opening up opportunities for foreign investors, with their maximum 99-year leases being far longer than those currently allowed in other member states.
Cambodia, Myanmar, Vietnam and the Philippines make 50-year leasehold periods available to foreign investors, while Laos and Indonesia stick to 30-year leaseholds for land for foreigners, and Brunei grants just 25 years.
The Thai government is also looking into a new “windfall” tax on landlords and property owners who benefit from rising prices driven by government infrastructure developments, in addition to a new land and buildings tax, which was recently approved by the cabinet and which will be levied on first homes and land used for agricultural purposes with appraisal prices starting at 50 million baht, as well as on second homes and vacant land.