75% Foreign Ownership Quota for Condos Considered by Thai Government
Thailand’s Deputy Prime Minister Phumtham Wechayachai revealed that the Thai government is considering increasing the foreign freehold ownership limit in Thailand condominiums to 75% of a building’s usable space. Phumtham highlighted that this proposal to introduce measures to stimulate the economy and attract more foreign investment was initially discussed in a Cabinet meeting in April 2024.
Additionally, the Interior Ministry is looking into the feasibility of extending the maximum leasehold period for foreigners from 30 years to 99 years.
Current Foreign Ownership Regulations in Thailand
Currently, foreign ownership of condominiums in Thailand is governed by strict regulations under the Condominium Act. According to the existing law, foreigners can own up to 49% of the total area of a condominium building on a freehold basis. This limitation aims to preserve local ownership and prevent foreign dominance in the real estate market.
For the remaining 51% of the building’s space, foreign ownership is restricted to leasehold arrangements, typically lasting up to 30 years with an option to renew. This leasehold structure allows foreigners to legally possess and utilize the property but does not confer ownership in perpetuity.
These regulations are designed to balance the interests of foreign investors with the protection of local property rights and market stability. However, discussions about potentially increasing the freehold ownership limit to 75% reflect ongoing efforts by the Thai government to attract more foreign investment and stimulate economic growth in the real estate sector.
Impact on the Real Estate Market
Local property industry executives have been advocating for a higher foreign ownership cap due to growing interest from international buyers. At the same time, high household debt levels and stricter lending conditions have affected property demand among local buyers, causing developers to adopt a more cautious approach.
The Real Estate Information Center (REIC) reported a 19.7% drop in land allocation permits nationwide during the first quarter of this year, marking the largest decline in nine quarters. This decrease is attributed to developers adjusting to a continued decline in low-rise house transfers.
The REIC noted that foreign ownership quotas for condos in popular locations such as Phuket and Pattaya are fully occupied in several projects.
Acting director-general of the REIC, Vichai Viratkapan, pointed out that certain areas do not attract domestic buyers.
“The government should increase foreign ownership quotas in those regions to stimulate the economy, as the condo market in such locations depends on foreign demand.”
To address this issue, some projects have started reserving units for leasehold contracts at prices 10 to 15% lower than freehold units, primarily catering to foreign buyers.
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