For decades, Thailand has been popular among foreigners as a place in which to invest and where to retire to. Many nationals of countries from all over the world own real estate in the Kingdom, but a foreigner cannot own land, which entails certain inconveniences.
Nor can foreigners own more than 49% in any condominium development. Nevertheless, Thailand is striving to attract wealthy international investors, particularly from China.
On July 15, 2022, Prayut Chan-o-cha, Prime Minister of Thailand, proposed a policy that will enable foreigners to own land for personal residence only. Thai officials declare that this will boost the economy, encouraging rich foreigners’ spending and investment in the country.
As of September 2022, investing 40 million baht (1.1 million US dollars) in Thai real estate, securities, or equity for a term of at least three years is one of many conditions that nationals of other countries must meet to own a land plot.
When most foreigners decide to invest in Thai real estate, they do it via companies, so as to purchase properties tax free. This program was introduced by the Board of Investment (BOI) supervised by the Government of Thailand.
There has been an excess of apartments in the Thai real estate market of late. As of 2020, over 90,000 apartments in condominiums in the Bangkok Metropolitan Region were unsold.
By permitting foreign investment, the Government of Thailand is striving to ensure liquidity of the real estate market, allowing rich foreigners to invest and thus boosting the Thai economy and increasing the land tax revenues.
As Thailand is a popular tourist destination and a part of the Eastern Economic Corridor, many investors from China purchased Thai real estate – so much so that a half of all foreign-owned condominiums in Pattaya, one of the country’s tourist havens, belongs to Chinese citizens.
Selling land to nationals of other countries and their using this land for residence may exacerbate the land inequality in Thailand. Additional taxes charged to collect rent from foreign buyers of residential properties will become another barrier preventing locals from entering the market, as they increasingly find themselves ousted out of the housing market in resort cities.
Thailand’s leading opposition party objects to this decision. It says that almost 80% of Thai nationals own no land, and permitting foreign ownership will only benefit those who own most of the land – the middle class and elite.
The proposed policy is indeed unpopular among the country’s population. The current rent policy is criticized for allowing foreigners to own land and not improving the wellbeing of low-income families.