Foreigners to be allowed to own 75% of units in condominium projects

[reader]

From Thai PBS World

The Interior Ministry has been assigned by the Cabinet to amend the Condominium Act, to increase the foreign ownership limit in a development from 49% to 75%, and to amend the Land Act, to allow foreigners to lease land in Thailand for 99 years, up from the current 50.

Interior Minister Anutin Charnvirakul said on Friday that there is actually not much change needed to the Land Act, because the existing law already allows foreigners to lease land for 50 years, with an option to extend by a further 50 years.

He said the Land Act needs to be amended anyway, to provide assurance to foreign investors that they can utilize land in Thailand for up to 99 years in a single lease contract, making investment secure and worthwhile.

Anutin also explained that, although foreigners will be able to buy up to 75% of the units in a condominium development, their voting rights in the management of the development remain unchanged, with the Thais retaining the control.

The change in the Condominium Act should mean that more units will be bought by foreigners, as there is currently an oversupply, especially of low and moderately-priced units, said the interior minister, while claiming that Thailand and the Thai people will gain from the two amendments.

[reader]

NOTE  — in other words, hoteliers are in favor of stifling competition. They ignore fact that “daily” rental is prevented by law in Bangkok.

From The Thaiger

The Thai Hotels Association (THA) expressed strong opposition to the government’s plan to allow foreigners to own up to 75% of condominium units, warning that it could lead to intense price competition and market disruption. Concerns were raised during a meeting where members discussed significant issues impacting the hospitality industry.

During the meeting, Tourism and Sports Minister, Sermsak Pongpanich delivered a speech on the direction of Thailand’s tourism and government policies to support the sector. The minister also welcomed input from the association members regarding their challenges.

Key issues highlighted by the members included land and building taxes, along with the government’s consideration to increase the foreign ownership limit of condominiums from 49% to 75%. The association argued that this change could negatively impact the hotel business.

President of the THA, Tianprasert Chaipattananon, stated that the Ministry of Finance is preparing to propose this policy to the Cabinet. He voiced strong opposition, claiming that the policy would facilitate the renting out of condo units daily, directly competing with hotels and potentially sparking a price war.

[vinapu]

Thay may be on something. In my city is considered common wisdom that influx of foreigners  buying investment properties contributed big time to spike in real estate  prices in recent years. As result city introduced steep vacant property tax

[Keithambrose]

Same issue all over the world. Locals get priced out. In UK we are now seeing large developments where all units are only for rent.

[reader]

From Pattaya Mail

By Barry Kenyon 

CBRE Thailand, the market leader in real estate services, has told the Bangkok Postthat increasing the foreign ownership for condos to 75 percent is likely non-consequential right now. This is because very few condo projects have reached the current quota of 49 percent.

Praphinleeya Phuengkhuankhan, head of residential sales, said, “An increase in foreign ownership quotas may not be significant for the market or the economy as demand from foreign buyers for any single project is not that high.” She added that even in resorts such as Phuket or Pattaya, non-Thai buyers prefer villas over condos.

Nationally, the number of condo ownership transfers by foreigners accounted for 13.6 percent last year, up from 10.8 percent in 2022. However, foreigners tended to purchase condo units outside of Greater Bangkok with Chonburi province, including Pattaya, being a front runner.

Foreigners are generally restricted from owning land in Thailand directly. However, they can own specified buildings on the land, such as condominium units, or lease land for various periods which are currently under review by the government.

Some commentators believe that current ambiguities about taxing foreigners on remitted income from 2024, and the possibility of taxing them on worldwide income from 2025, is dampening condo sales by foreign investors.

 

[reader]

From Pattaya Mail

By Barry Kenyon 

Online foreigners are warning the Thai government that they are changing their minds about buying condominium units here. They stress that the Thai Revenue policy to tax residents on overseas income remitted to Thailand from January 2024 is cautioning them, whilst the suggestion that worldwide income, whether remitted or not, could become taxable from 2025 is the last straw.

Prime minister Srettha Thavisin has resurrected the old idea of property-purchase legislation by arguing for an increase in the foreign ownership quota for condos to 75 percent and extending leasehold contracts to 99 years. Yet he and his Pheu Thai party attacked the proposal of his predecessor General Chan-o-cha who wanted to allow foreigners to buy one rai of land (0.16 hectares) provided they invested here very heavily. The General’s plans were eventually dropped after an avalanche of complaints he was “selling” the country.

Real estate associations have urged Pheu Thai to reform the property laws because of weak demands from local Thai buyers and evidence that foreigners are using illegal Thai nominees in the purchasing process of both villas and condos. Although some projects in Thailand are currently undersold, others in popular locations such as beaches or overhead rail stations or industrial estates are selling like hot cakes. Colliers Thailand, the commercial real estate, say the best-selling provincial projects are in areas, such as Pattaya and Phuket, popular with foreigners rather than Thais.

Several Pattaya real estate companies point out that the foreign market is changing and that most buyers are no longer Europeans or Americans worried about income tax for resident expats. The Real Estate Information Center confirms that the top three nationalities for foreign ownership transfers of condos overall in the first quarter of 2024 were Chinese, Myanmar nationals and Russians. However, the vast majority of purchases were for investment purposes and most commercial buyers were not pensioned retirees wanting to live in their purchases.

Surachet Kongcheep, managing director of the consultancy Property DNA, urged caution about liberalizing the condo regulations as most projects had not reached their foreign quota. He also criticized developers who sold condo units at higher prices exclusively to foreigners as this could distort the market for Thais. He suggested a new rule that condo purchasers must wait at least three years before being sold or transferred to another individual. But the point is that traditional retirees on renewable visas or extensions of stay are no longer the hub of Thailand’s property market. Pumping up the property market has new players.