16 Jul Great news for foreign real estate investors in Thailand
With the Thai economy decelerating, looser ownership laws are in order
Tourism has always been a forte for Thailand, but foreigners in the kingdom are wont to run into strict property ownership caps when faced with the prospect of buying land.
Now the Finance Ministry is mulling the possibility of letting non-Thais acquire land through more generous leasehold terms. “If we can amend the leasing law to support leasehold, foreigners can lease Thai real estate for a long term, possibly up to 50 years, and sell the rights,” the Bangkok Post quoted finance minister Apisak Tantivorawong as saying.
Current leasehold terms in Thailand are limited to 30 years, with an option to renew for another three decades. Extending those terms would give tenants a sense of ownership, said Apisak. “Allowing leasehold will unleash demand from around the world. It will also change the structure of the property market in which foreigners will become customers alongside Thais.”
Exploring new avenues of growth in the real estate industry has become a pressing matter for Thailand, one of the slower-performing economies in Southeast Asia. The kingdom’s GDP growth was estimated at 3.1 percent last year.
“When the economy is about to hit a slump, the property sector always shows early-warning signs,” Apisak explained to the Post. “When the economy picks up, the sector is always the first to show a sign of life. That’s why this government pays attention to the sector.”
Apisak also revealed plans to levy a “windfall tax” on land and buildings close to mass transit lines and other state projects. The windfall tax will be calculated according to the value increases determined prior to and after the state projects’ completion.
Source: Property Report