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Property in Thailand
Official Bangkok’s plans to lift restrictions on the sale of land in Thailand to foreigners have been put on hold indefinitely just two weeks after the news of the development of such plans became public. Experts agree that officials will not return to the consideration of this issue for some time. At least until the conclusion of the next general (parliamentary) elections scheduled for May 2023. While waiting, you may consider investing in property in Bangkok.
Debate around giving foreigners the right to buy land in Thailand
It is common knowledge that allowing foreigners to take ownership of land in Thailand has long been one of the most sensitive political issues in Southeast Asia’s second largest economy.
On October 25, 2022, the Thai Cabinet agreed to consider a proposal from the Asian country’s Ministry of the Interior to amend the law to allow certain foreigners to purchase up to one rai (0.16 ha) of land.
This decision of the Cabinet of Ministers caused an uproar in parliament against the backdrop of accusations from the opposition that the government decided to “sell out the country.” The news was quickly spread by the local media, which also caused a backlash from the general public.
Criticizing the plan of the authorities, the oppositionists appealed to the fact that such a step could further darken the prospects of landless Thais in terms of solving the “housing issue”, and rather modest investment requirements, the fulfillment of which would give a foreigner the right to purchase land, would not revive the economy.
The authorities do not abandon the idea to lift restrictions on foreigners
As a result, the Cabinet of Ministers approved the proposal of the Ministry of the Interior to postpone consideration of the plan to a more distant future. The corresponding statement was made on November 7 by official representatives of the government at a briefing in Bangkok, which took place after a regular meeting of the Cabinet of Ministers. The government will analyze public opinion and feedback to gauge the overall impact of the new initiative, officials said.
Commenting on the news, Prime Minister Prayut Chan-o-cha told reporters that the plan “is not canceled” entirely. The authorities intend to revise the initiative to address the problems.
Representatives of the Ministry of the Interior, in turn, called the issue “delicate” and stressed the need for research to weigh the advantages and disadvantages.
The regulation, approved by Prayut’s cabinet in November, was created to provide preferences in real estate transactions to foreigners with a long-term resident visa to Thailand (Thai LTR Visa) in order to stimulate demand for an appropriate investment immigration program, launched in the fall of 2022, aimed at attracting additional foreign investment for recovery of the country’s economy in the post-pandemic era.
There are various ways for foreigners to invest in obtaining a Thai LTR Visa, including:
- the purchase of bonds issued by the government, the Central Bank of Thailand, state-owned enterprises,
- as well as the capitalization of some real estate investment funds.
Officials intended to give long-term residents the right to buy land to build their own homes. The authorities were willing to offer foreign professionals, wealthy individuals and retirees the right to buy land in the specified amount if applicants invested at least THB 40 million (USD 1.1 million) in the Thai economy during a three-year or longer period.
Economic recovery through the influx of expats
Southeast Asia’s second-largest economy is expected to grow by 3.3% in 2022, thanks in part to an influx of wealthy expats. For decades, Thailand has been one of the most popular destinations in Asia for businessmen and retirees.
Due to the strict anti-epidemiological restrictions introduced after the announcement of the pandemic, the popularity of the state has slightly decreased, and the flow of tourists has fallen. But experts expect the tourist flow to recover amid the easing of restrictions.
Current investment rules in the real estate market in Thailand
Right now, foreigners have to put up with significant restrictions when it comes to the right to own property in Thailand. In particular, buyers from abroad are allowed to become owners of apartments in condominiums or use complex long-term lease agreements. Here you can find information on documents required when buying a property abroad.
Moreover, the legislation provides for restrictions on the ownership of housing in condominiums. Foreigners are entitled to own up to 49% of apartments in a particular multi-apartment building or residential complex consisting of several buildings.
Some developers are suggesting a higher bar as the construction industry is in decline due to a fall in the purchasing power of the local population amid a slowdown in the economy due to the pandemic.
In 2021, Chinese citizens accounted for the largest share of foreign-owned real estate in Thailand, according to the Center for Collecting and Processing Information on the Real Estate Market under the State Housing Bank. The Chinese owned 3,526 apartments with a total value of THB 22.9 billion.
Investment immigration gets harder
The situation with amendments to Thai legislation is not unusual. In an effort to attract immigrant investors, the authorities of many countries announce the introduction of special benefits, which is not liked by the opposition, who want to earn political points before the elections, and, as a rule, nationalist-minded citizens.
Sometimes things don’t go beyond proposals, which is what happened in Thailand. But often the benefits are accepted only to later safely sink into oblivion after a change of power or increased pressure from outside.
Sometimes outside intervention and change of power is not required: the incumbent government understands that the offer is too generous and increases prices or otherwise worsens conditions for immigrant investors.
Given the above, experts recommend using any really profitable and interesting opportunities for investment immigration before they disappear!
Real estate in Thailand
You can start your search for the real estate in Thailand right now using the services of the Thailand-Real.Estate website. On the website you will be able to compare prices for properties in different locations, and choose what suits you best.