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Thailand: plans to relax foreign ownership rules

Catherine Deshayes

In order to make it more tempting for international investors to buy property in Thailand, the Thai Government is considering relaxing the rules on the foreign ownership of property...

Thailand has shot up in popularity with British buyers over the last decade, but the land and property ownership system remains far less straightforward than in other hotspots.

The Seoul Times recently reported while prices increased by 5.6 per cent in the first two quarters of this year, this still represents a real terms drop of 4.18 per cent as the house price rise is lower than overall inflation.

Following on from these prices, the paper said that the Thai government is considering changing the ownership rules to help to draw in international money, thus boosting the property market and the economy as a whole.

The current Thai law does not allow foreigners to buy land, and, since the military coup of 2006, the Government has gone to great lengths to ensure that the law is properly upheld.

Also, if a foreigner is going to operate a business in Thailand then he may purchase the freehold of the land through his Thai limited company. The land will be owned by the Thai Company, not by the individual.

Another stumbling block is the rule that purchasers of condominiums may buy the freehold so long as total foreign ownership does not exceed 49 per cent of the whole structure.

The changes, which have not yet been detailed or confirmed, will aim to remove some of these re4styruictions and make the whole property purchasing process more transparent and straightforward for foreign investors.

There are many plus points of investing in Thailand, including the completion of the Suvarnabhumi-Bangkok International Airport, (SBIA) which is expected to spur growth in commercial property markets in eastern Bangkok as well as make Thailand even more accessible by air. Thailand is also one of the cheapest places to fly to in Asia.

Thailand has an excellent infrastructure as well as world-class facilities in many resort towns, and property is much cheaper in Thailand than elsewhere and an increase in overseas interest in property purchase has helped to create an economic recovery.

Property investors who bought after 1999 have witnessed huge capital growth, particularly in the major cities, and rental potential is great, due to increased government spending luring growing numbers of tourists.

There are tax advantages too- with no capital gains tax for private investors, and low ongoing taxes.

Browse Thai property for sale.

Picture by wernerbrau