Check out 4 measures to attract foreigners to buy houses and condos in Thailand. Policies that have not yet been concluded.

The government is trying to attract purchasing power from foreigners in hopes of stimulating the Thai real estate market, both in terms of condos, by increasing the proportion of condos that foreigners can buy, including measures to attract wealthy foreigners to buy houses in Thailand.

Summary of 2 real estate measures to help foreigners buy condos in Thailand

The Office of the Cabinet Secretariat has sent a most urgent letter to the Minister of Interior regarding economic stimulus measures through real estate, stating that:

According to the confirmation of the Cabinet resolution on 9 April 2024 regarding economic stimulus measures through the real estate sector and preparations to support the implementation of Thailand’s elevation to a global industrial hub (Thailand Vision) to proceed with the details already announced,

Recently, in the Cabinet meeting on 18 June 2024, Mr. Phumtham Vejjayachai, Deputy Prime Minister and acting Prime Minister, proposed that according to the Cabinet resolution (9 April 2024) regarding economic stimulus measures through the real estate sector, by assigning relevant agencies to study various related measures,

To stimulate the economy at the macro level and attract large investors to invest in Thailand, with various factors that will promote foreigners with the potential to come to work, the Ministry of Interior is requested to study the feasibility as follows:

1. Consideration of reviewing the determination of the duration of the underlying property under the Property Rights Act B.E. 2562, which stipulates that the underlying property can have a time limit not exceeding 99 years.
2. Consideration of reviewing the criteria and laws related to granting aliens the right to own condominiums from the original not exceeding 49% to not exceeding 75%.

Other conditions related to the management of the condominium juristic person may be set, such as limiting the voting rights of foreigners and foreign juristic persons who have acquired ownership later than the ratio of 49%.

If it is necessary to enact or amend any laws to support the implementation of this matter, the Ministry of Interior shall expedite the process to be completed as soon as possible, strictly complying with the provisions of the law, regulations, and related criteria, and submitting to the Cabinet as soon as possible.

Summary of 2 real estate measures to help foreigners buy houses in Thailand

Measures to stimulate the economy and investment by attracting high-potential foreigners to Thailand are as follows:

1. Issuance of long-term resident visa

The permission for certain types of aliens to enter the Kingdom as a special case, in accordance with the economic and investment stimulus measures by attracting aliens with high potential to Thailand, which is the permission for aliens with high potential to enter the Kingdom as a special case for long-term residence (Long-term resident visa: LTR Visa). The main points are as follows:

1) Establish a new type of visa for long-term residents (Long-term resident visa: LTR Visa) with a validity of 10 years.
2) Establish qualifications for 4 target groups of aliens: the wealthy population, retirees from abroad, those who wish to work from Thailand, and specialists, including dependents of aliens (spouse and legitimate children under 20 years of age, not exceeding 4 persons).
3) Specify that aliens and dependents of aliens who receive the visa must pay a one-time visa fee of 50,000 baht (from the original 100,000 baht) and can apply for a work permit in accordance with the law on the management of alien employment.

Measures to attract 4 groups of foreigners to buy land in Thailand

Economic and investment stimulus measures by attracting high-potential foreigners to Thailand will help stimulate the economy through income generation, investment, and increased employment opportunities within the country, focusing on 4 target groups:

1) High-wealth global population
2) International retirees
3) Those who want to work in Thailand
4) Those with specialized skills

The key points of why four groups of high-potential aliens were able to own land are as follows:

1) The area of ​​the land entitled to the right must not exceed 1 rai according to Section 96 bis of the Land Code, which must be used as a residence for oneself.
2) Within the Bangkok Metropolitan Area, Pattaya City, or municipality, or within an area designated as a residential area according to the Town Planning Act.
3) Must have an investment amount in any type of business or activity of no less than 40 million baht and must maintain the investment for no less than 3 years, such as purchasing Thai government bonds, investing in real estate mutual funds, infrastructure mutual funds, real estate investment trusts, etc., established under the law on trusts for transactions in the capital market (added from the Ministerial Regulation B.E. 2545).
4) If the investment in the business or activity is withdrawn before the investment period is complete, the officer must be notified in writing within 60 days from the date of withdrawal.
5) The enforcement period of the law is 5 years.

The draft of the Ministerial Regulation on the Acquisition of Land for Residence by Foreigners under the Economic and Investment Stimulus Measures by Attracting High-Potential Foreigners to Thailand B.E. … has added principles on investment types and investment duration (reduced from 5 years to 3 years), which is different from the Ministerial Regulation on the Criteria, Methods, and Conditions for the Acquisition of Land for Residence by Foreigners B.E. 2545, which is currently in effect.

This additional draft law is still being reviewed after many parties were concerned that it would favor foreigners too much, which would affect Thais in the future.

What are the effects of measures to attract foreigners to buy houses in Thailand?

The National Economic and Social Development Board (NESDB) expects the implementation period of the measures within 5 fiscal years (2022-2026) to help:

1. Increase the number of foreigners residing in Thailand by 1 million
2. Increase spending in the economic system by 1 trillion baht
3. Increase domestic investment by 800 billion baht, generating 270 billion baht in additional tax revenue
4. Provide Thailand with sufficient personnel with expertise in various fields for the business sector that the government aims to promote, which is in line with the master plan under the national strategy (2018-2037) on the issues of future industries and services, infrastructure, logistics, and digital systems

Condo transfer situation for foreigners

According to the Real Estate Information Center (REIC), the overall picture of condominium ownership transfers by foreigners in the second quarter of 2024 found that:

There were 3,342 units of condominium ownership transfers by foreigners, accounting for 11.8% of the total condominium ownership transfers nationwide, a decrease of 6.2% compared to the same period last year.

The value of ownership transfers was 14,874 million baht, accounting for 21.1% of the total condominium ownership transfers nationwide, a decrease of 17.7% compared to the same period last year.

It is noted that there were significant signs of ownership transfers by Chinese, Russian, and Myanmar buyers in the second quarter of 2024.

This is because each country has begun to have policies prohibiting the withdrawal of money from abroad. At the same time, Thailand’s regulations on bringing money into the country to transfer ownership are quite strict.

Top 10 nationalities that bought the most condos during January-June 2024

Opening up opportunities for foreigners to buy houses in Thailand helps stimulate the economy.

The Real Estate Information Center previously commented that the Cabinet’s resolution in principle to allow foreigners to purchase houses with land or purchase land to build residences

is considered an economic and investment stimulus measure that will attract foreigners with high potential to Thailand, which will create new demand with high purchasing power in the country to live in the long term and spend on consumer goods in the country.

In addition, Thailand allows foreigners to own condominiums. It was found that before the COVID-19 outbreak, there were more than 10,000 transfers of ownership per year, worth more than 50 billion baht, or approximately 5% of the total ownership transfers nationwide.

However, if foreigners are allowed to buy houses with land, it is expected that the value of ownership transfers will increase by up to another 50,000 units, worth approximately 100 billion baht, which may increase the proportion of the value of residential ownership transfers purchased by foreigners from 5% to 15% of the total value of ownership transfers nationwide.

Concerns about allowing foreigners to buy houses in Thailand

However, in implementing this policy, it should be clearly stated that the government will allow foreigners to buy houses and land in Thailand for long-term residence for how many years? This policy may not have to be opened forever.

It should also be clearly stated what price range of residences it is, to prevent the purchase of land and residences at a price within the purchasing power of most Thais. For example, the government may not allow foreigners to buy houses and land at a price not exceeding 10-15 million baht, depending on the area.

In addition, the period of ownership should be specified to prevent speculation, such as not less than 3-5 years, which will not cause speculation in land and housing prices and also prevent the emergence of a real estate bubble.

In addition, there should be a determination of related taxes or fees for foreign land owners at a rate different from Thais, and the rules for selling houses and land when foreigners want to resell after a certain period have to be clearly defined.