One Year with the Draft Ministerial Regulation

The Cabinet (KRM) approved on September 18, 2021 measures to stimulate the economy by allowing foreigners to reside in Thailand long-term and to purchase various properties at an increased ratio as long-term residents in Thailand in four groups:

1. Wealthy Global Citizens

2. Wealthy Pensioners

3. Work from Thailand Professionals

4. Highly Skilled Professionals

The National Economic and Social Development Council (NESDC) anticipates that this measure will attract 1 million wealthy foreigners to relocate to Thailand within a five-year budget period (2022-2026) of implementation and if successful, will increase spending in the economy by 100-250 billion baht (assuming an average spending of 1 million baht per person per year)

On October 25, 2021, the Cabinet approved the principle of the draft ministerial regulation on land acquisition for foreign residents as part of the economic and investment stimulus measures to attract high-potential foreigners to Thailand which will be enforced for 5 years from the date of publication in the Royal Gazette

Facts Almost 100 countries worldwide allow foreigners to own land[1]

1. How do other countries operate?

Divided into:

1. Countries with no restrictions on property ownership for foreigners

Such as Spain, France, Italy, Costa Rica

2. Countries with reciprocal agreements

Such as Croatia, Turkey, and South Korea which allow only certain nationalities with reciprocal agreements

Egypt allows a 99-year leasehold

2. Additional measures to prevent rising property prices

Or for security reasons such as

Switzerland limits the number of foreigners who can purchase property each year

The United Kingdom imposes a significantly higher capital gains tax on profits from property sales by foreigners

Australia currently restricts the types of properties that can be purchased which are generally only new construction projects and violators can face imprisonment or hefty fines

Sri Lanka allows foreigners to hold land but imposes a 100% transfer tax for foreigners in Sri Lanka

Canada provinces such as Quebec, Ontario, and British Columbia have no restrictions on foreign ownership

Australia allows foreigners who do not reside in Australia and foreign companies to purchase up to 50% of residential developments and are permitted to buy new properties or land for construction as long as construction begins within 12 months of purchase and can buy older properties provided that at least 50% of the purchase price is used for renovations

3. Other restrictions on foreign land purchases

About 40% of 195 countries have restrictions on allowing foreigners to own property such as

1. Land located near international borders such as

Panama where land cannot be more than 6 miles from the international border

Mexico where foreigners are not allowed to purchase property within 62 miles from the international border or 31 miles from the coast

Spain restricts military land and land near international borders

2. Certain waterfront properties

New Zealand restricts land in "sensitive" areas including designated reserve areas and historical or heritage land and lakes

Panama restricts land on beach islands

5 Countries in Asia Where Foreigners Can Own Land [2]

1. Malaysia

Malaysia is the only place where foreigners can own land in Southeast Asia the only type of property that foreigners cannot purchase is "heritage property" or old colonial properties foreigners can apply for residency in Malaysia through the My Second Home Program (MM2H) which allows foreigners to obtain a 10-year visa by depositing around 70,000 USD and keeping it in the bank

2. South Korea

South Korea has few restrictions on land ownership the openness to foreign investment is quite reasonable considering Korea's globalization these foreigners often wish to buy their own properties the Republic of Korea is meticulous in issuing long-term visas except for Jeju Island this small island located off the southern coast of the Korean Peninsula is a special administrative zone that allows everyone to visit without a visa similarly Jeju also has an investor residency permit for anyone wishing to invest in real estate worth approximately 430,000 USD on this island such residency permits can lead to Korean citizenship

3. Taiwan

Taiwan is a developed country with very few restrictions on foreign property ownership purchasing property in Taiwan does not automatically grant foreigners residency there unlike Malaysia, South Korea which previously had some form of residency program for property owners foreigners must go through regular immigration channels to reside permanently in Taiwan foreigners can purchase undeveloped land or homes in Taiwan

4. Japan

Foreigners can purchase property in Japan without restrictions on the type of property foreigners can own land and buildings in their own name however, foreigners must have employment or conduct business or hold a full-time residence visa in Japan

5. Singapore

In Singapore foreigners can legally own condos, houses, and land Singapore is one of the easiest countries in Asia to buy a condo however while foreigners are theoretically allowed to own houses or land acquiring such properties can be incredibly difficult and expensive in practice to hold land as a foreigner requires prior government approval such approval must involve a significant purchase (valuing land over 20 million dollars) and proving that the purchase is "beneficial to Singapore's economy"

Expert Opinions[3]

Dr. Wichai Wiratthakhan, the Bank of Housing Authority Inspector and Acting Director of the Real Estate Information Center stated that the overall foreign ownership of condominiums in Thailand is still below 49% as stipulated by law particularly units priced below 5 million baht have less than 10% foreign ownership while units priced above 5 million baht have 20% foreign ownership the group of foreigners wanting to Work from Thailand consists of skilled labor and high technology we can designate these groups to reside in various strategic areas such as the EEC to drive the country forward faster currently, foreigners already hold properties through nominees why not bring everything to the table do not operate under the table illegally sometimes denying the truth makes the truth go underground becoming a black market is illegal if we bring it above ground for the state to collect taxes and fees it will be more beneficial

Summary and Recommendations

1. The statement that "allowing foreigners to buy property... is selling the nation" is a perspective that lacks understanding of the details of neighboring countries or case studies of what other countries are doing and is a nationalist idea from the World War era (very outdated)

2. Allowing foreigners to purchase property under conditions that benefit the country whether in terms of area limits ownership types eligibility criteria or even linking it with investment promotion policies is a normal practice among countries

3. We must accept that "Thailand's competitiveness" is gradually decreasing having the right to own property is one of the key advantages (property ownership rights mean freehold or long-term leasehold rights of 60, 90 years)

4. Thailand has entered a state of "complete aging society" (where the elderly population exceeds 20%) which will lead to a shortage of workers at all levels because on the other side of an aging society is a decline in the young and working-age population inviting knowledgeable and capable foreigners to work is a policy of countries facing "aging society" issues as seen in Japan Singapore and European countries

5. Future consumers will be the elderly especially seniors from developed countries welcoming retirees to Thailand in exchange for property ownership is a complementary issue (currently Thailand has a long-term visa of 5+5 years but must report to immigration every 90 days) even though Thailand is a retirement destination because we excel in medical services food climate and cost of living we have a significant weakness in property ownership rights if we have clear regulations such as target areas property types and prices it will make Thailand a paradise for retirees leading to many related businesses in the "aging society" sector

6. The "aging society" business ranges from healthcare food home decoration tourism life insurance technology for elderly care etc. can create jobs and many business opportunities because the elderly group that can travel to retire abroad tends to be high-income seniors with health insurance and clear pensions in summary, they have high purchasing power

7. We can establish a fund for "cross-subsidy" from the property holding fees of foreign seniors to create a fund for elderly care in those areas this measure can effectively reduce inequality at the local level

8. However, gradually opening up testing in certain areas and certain types of properties should be a decision to start immediately

...Thank you and support the National Economic and Social Development Council (NESDC) for their thorough study and courage to present this issue and encourage all parties involved to implement it successfully and promptly (carefully) before Thailand falls to the bottom of development

R. S. Tri Rat

27 October 2022

Real Estate & Housing Development Department

Faculty of Architecture

Chulalongkorn University

[1] Even Many Western Countries Are Restricting or Limiting Foreign Ownership https://thairesidential.com/is-thailand-alone-how-many-countries-in-the-world-prohibit-foreign-ownership-of-land/

[2] 5 Countries Where Foreigners Can Own Land in Asia , https://www.investasian.com/2019/07/06/countries-where-foreigners-own-land/

[3] Interview via THE STANDARD NOW , https://thestandard.co/foreign-real-estate-ownership-in-thailand/ 21.09.2021