Thailand May Relax Its Expat Real Estate Purchasing To Attract Foreign Investment
The Land of 10,000 smiles has been a tourist haven for years. Now, the government is considering making it easier for some of them to stay.
For foreigners wishing to invest in Thai real estate, the process was as complicated as trying to negotiate a bike ride through the country’s mountainous jungles. A labyrinth of loopholes and bumps which involved finding a Thai business partner, locating a condo building that was 51 percent occupied by Thai citizens or investing ungodly sums of cash into the country while being a resident, was the only way in.
Their expat property investment policies made Brexit look like a Eurozone street party. Now, though, the Thai government is having a change of heart. They have cottoned on that other countries with more lenient laws are reaping in untold coffers from foreign investment and want in on the action.
Currently, foreigners can only purchase 30-year leasehold contracts for standalone houses. They can be extended for another 30 years but that is at the discretion of of the landowner. Only land for commercial use can be leased for a period of 50 years, and up to 99 years in free economic zones. Needless to say, it has made foreign millionaires hoping to build their own Thai palaces amid crystal blue oceans, sandy beaches and verdant hills, skittish about spending the cash. Now the government is considering extending the leasehold period to 50 years.
“If we can do it, the property industry will boom again because demand will come from all over the world,” the country’s property sector, finance minister Apisak Tantivorawong said, hinting at the boom a prosperous Thailand experienced before the Asian financial crisis hit in 1997.
Whether adding an additional twenty years on the current leasehold will create the type of frenzy other regional countries such Australia and New Zealand have experienced with Chinese investors in particular, remains to be seen. It would, however, make Thailand competitive with its asian peers.
Singapore and Malaysia are far more welcoming to foreign investors, with their maximum 99-year leases being far longer than those currently allowed in other member states.
Cambodia, Myanmar, Vietnam and the Philippines make 50-year leasehold periods available to foreign investors, while Laos and Indonesia stick steadfastly to 30-year leaseholds for land. Brunei is downright miserly granting just just 25 years.
Buying property in Thailand, even when married to a Thai citizen and having been a resident is no easy feat, especially if you’re expecting a Thai bank to give you a mortgage. Escapeartist.com, a web site for wonder lust expats, says that foreign buyers need to source their money from oversees even if a Thai bank is underwriting the loan. The mortgage will be in the currency from where the money came—be it US dollars or euros. The site also warns about shoddy condo construction.
However, Thailand is so appealing to potential retirees because once they have purchased their dream condo or house, there are zero property taxes. That means a balmy climate, picturesque beaches and delicious food priced at pennies on the dollar compared to the US, could all be with in your reach. Have a think about that the next time your commute into the office is delayed because of a snowstorm.
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