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Increased foreigner condo ownership rights

Increased foreigner condo ownership rights

Prime Minister Srettha Thavisin has defended the proposal to allow foreigners to lease land in Thailand for up to 99 years and to own up to 75% of a condominium project. He emphasized that the intention is to boost the Thai economy, not to benefit foreigners.

Srettha explained that the Finance Ministry conceived the idea, and he has tasked the Interior Ministry with exploring the possibility of amending the Land and Condominium acts accordingly.

He clarified that leasing land to foreigners for up to 99 years, instead of the current 50 years plus a possible 50-year extension, does not grant ownership rights to foreigners. He noted that some countries allow foreigners, including Thais, to lease land for up to 150 years or even purchase it outright.

Regarding the increase in foreign ownership of a condominium project from 49% to 75%, Srettha stated that foreigners’ voting rights would remain capped at 49%, with 51% of the voting rights retained by Thai nationals.

He denied that a similar proposal had been previously floated and dropped due to resistance, explaining that the earlier plan involved allowing foreigners to buy land, which is a more sensitive issue.

Before entering politics, Srettha was a major real estate developer.

Several Thai businessmen and real estate experts have expressed reservations about the proposal. Isares Rattanadilok Na Phuket, a Thai businessman, agreed that the idea could boost the property market and GDP, but he warned it could also drive up land prices, making it harder for Thai nationals to own condos or land. He also expressed concern that foreign investors in the hotel business might be disadvantaged if they invest in serviced apartments, which have lower operating costs than hotels. Additionally, he cautioned that foreigners could gain majority voting rights in a condo through the use of Thai proxies.

Real estate expert Dr. Sopon Pornchokchai suggested that the government should instead focus on measures to boost the sale of unsold condominium units to address the current glut. He also voiced concerns that amendments to the two laws could create loopholes for “grey” businesses to acquire condominium projects or lease large plots of land to launder money.

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