The Thai 49% Rule On Foreigners Legally Owning Condominiums

[jumnien]

Is it 49% of the condos or 49% of the total sq. meters or 49% of the value?

[donx]

I wonder what happens when one of these condos is sold. Are they allowed to sell to a foreigner? Can these projects remain higher than the 49% ownership rule? How many projects actually ended up being owned beyond the 49% limit?

If anyone can shed some light on these questions it would be most appreciated. What I think donx is asking is whether a Thai owner of a condo can resell it to a foreigner and upset the 49% limit? I have always wondered about that.

Regards.

Actually what I was referring to wasn't a Thai owner but was a foreign owner selling to another foreigner. I am specifically referring to projects that were temporarily allowed to go over the 49% foreign ownership limit.

To answer your question, my understanding is that a Thai owner of a condo cannot resell to a foreigner if that sale upsets the 49% limit. Actually they may be able to sell it but the transfer of title will not be permitted at the land office. Some developers (View Talay in Pattaya?) will take a foreigner's down payment and if all of the foreign 49% ownership is titled before he/she gets to the land office to register the title, then the developer pushes them to put the condo in a Thai company name as was done with land titles. Sometimes they will give them their money back.

To answer mdeland's question, my understanding of the 49% rule is that it applies to the total square meters and not total value. This means that more than 50% of the total value of a condo complex can be owned by foreigners. For example the top 10 floors of a 20 floor building could all be owned by foreigners and be worth much more than 50% of the condo complex's resale value.

[quiksilva]

Its 49% of the sellable space, note that this is not total space it excludes common areas.

[dada]

I wonder what happens when one of these condos is sold. Are they allowed to sell to a foreigner? Can these projects remain higher than the 49% ownership rule? How many projects actually ended up being owned beyond the 49% limit?

If anyone can shed some light on these questions it would be most appreciated. What I think donx is asking is whether a Thai owner of a condo can resell it to a foreigner and upset the 49% limit? I have always wondered about that.

Regards.

I'm thinking you can but it would be a violation law and then you'd be standing on shakey ground

[Abrak]

I wonder what happens when one of these condos is sold. Are they allowed to sell to a foreigner? Can these projects remain higher than the 49% ownership rule? How many projects actually ended up being owned beyond the 49% limit?

If anyone can shed some light on these questions it would be most appreciated. What I think donx is asking is whether a Thai owner of a condo can resell it to a foreigner and upset the 49% limit? I have always wondered about that.

Regards.

If the foreign ownership limit is full and a Thai sells to a foreigner, the foreigner is simply not allowed to register the condo under his name as it must be registered under a Thai entity. (Without going into details, this is not really as problematic as it sounds.)

[CRUNCHER]

Quite an interesting (if you like that sort of thing!) paper from one of the HK universities about the relative valuation of long-term (999 year) leases in HK versus short-term ones here:

http://www.citb.gov.hk/cib/psdas/content/d...aper_KWChau.pdf

A fairly meaningless paper. Conduit Road is not typically of the Hong Property market. There may well be a few longer leases (beyond 2047) left, but very very few.

There is not actually 50 year leases as such. If you buy a new property today the lease will run out on 30th June 2047 i.e. 40 years

Having lived in Hong Kong over 30 years and bought and sold proterty since 1989 as well as knowing Hong Kong people well, I can say a 40 year lease is very accepable. It is a liftime in the Hong Kong scenario. It will only become problematic when you get to the stage where a mortgage term will eceed the lease life (in fact banks willl not normally grant mortgages beyond the life of the lease). Typically mortgages in Hong Kong are 10 to 20 years so this will not start to be a problem until nearing 2027 and will not become critical until 2037. In fct the age of the property will be more of an issue until then.

I perhaps should have said almost all land have lease that expire in 2047, bu I can assure you that is the case.

[Meerkat]

Hmm...looks like the actual terms lie somewhere in the middle. From the HK Lands Dept. site:

http://www.landsd.gov.hk/en/service/landpolicy.htm

So in a nutshell:

Older properties with pre-existing longer-term leases are being honoured.

Properties built between 1985 and 1997 have leases expiring 2047, but can be extended for another 50 years.

Properties built after the handover have fixed 50 year leases which are renewable for another 50 years (but the govt still reserves the right not to renew!).

Never easy, is it?!

[CRUNCHER]

Hmm...looks like the actual terms lie somewhere in the middle. From the HK Lands Dept. site:

http://www.landsd.gov.hk/en/service/landpolicy.htm

So in a nutshell:

Older properties with pre-existing longer-term leases are being honoured.

Properties built between 1985 and 1997 have leases expiring 2047, but can be extended for another 50 years.

Properties built after the handover have fixed 50 year leases which are renewable for another 50 years (but the govt still reserves the right not to renew!).

Never easy, is it?!

Sure is difficult sometimes. Interestingly I bought a flat in early 2002 and my lease expires 30th June 2047 45 years). The difference between theory and practice I suppose.

As far as Thailand is concerned, you could not plant HKs system here, because the Government does not own all the land. However there could be some mileage in something similar, especially if the Government found out that they could make some money.

For example owners of land could hand over the land to the Government in return for a long lease and the payment of rent. This would help house owners whose land is owned by a company with nominee shareholders. Existing condos might be problematic, but at the completion of new development the developer turns over land ownership to the Government and condo purchasers would get long leases. This might help Thai paranoia over foreigners owning land and provide the Government with income. 49% ownership of condos would become irrelevant. Rent need not be exorbitant. For example on 100 sq. mtr. flat in HK I pay about 15,000 baht a year.

I appreciate what I have said is very simplistic and I can see arguments against it. It could, however, provide a starting point for thought in resolving many problems that exist with the Thai housing situation at the moment.

[quiksilva]

Hmm...looks like the actual terms lie somewhere in the middle. From the HK Lands Dept. site:

http://www.landsd.gov.hk/en/service/landpolicy.htm

So in a nutshell:

Older properties with pre-existing longer-term leases are being honoured.

Properties built between 1985 and 1997 have leases expiring 2047, but can be extended for another 50 years.

Properties built after the handover have fixed 50 year leases which are renewable for another 50 years (but the govt still reserves the right not to renew!).

Never easy, is it?!

Sure is difficult sometimes. Interestingly I bought a flat in early 2002 and my lease expires 30th June 2047 45 years). The difference between theory and practice I suppose.

As far as Thailand is concerned, you could not plant HKs system here, because the Government does not own all the land. However there could be some mileage in something similar, especially if the Government found out that they could make some money.

For example owners of land could hand over the land to the Government in return for a long lease and the payment of rent. This would help house owners whose land is owned by a company with nominee shareholders. Existing condos might be problematic, but at the completion of new development the developer turns over land ownership to the Government and condo purchasers would get long leases. This might help Thai paranoia over foreigners owning land and provide the Government with income. 49% ownership of condos would become irrelevant. Rent need not be exorbitant. For example on 100 sq. mtr. flat in HK I pay about 15,000 baht a year.

I appreciate what I have said is very simplistic and I can see arguments against it. It could, however, provide a starting point for thought in resolving many problems that exist with the Thai housing situation at the moment.

The only ones who have problems with housing in Thailand are farangs who can not own property in their name, it works just fine for the Thais.

Chanodes are much more closer to freehold interests than HK's long leases will ever be.

What is needed in Thailand is overriding legislation that provides greater security of tenure to lessees, similar to that of the UK's Landlord and Tenant Act 1954 which provides a legislative right to renew (which can in fact be refused by the landlord under certain reasonable conditions (eg. they wants to use the property themselves, demolish it or make substantial modifications to it, the tenants were in breach etc).

This would I think provide a greater level of comfort to Lessee's and make leasehold interests in Thailand more comparable with what you find in HK or the UK etc and thereby significantly more practical methods of holding land.

Edited May 4, 2007 by quiksilva

[lotus eater]

There was a case being made recently by CBRE - which of course he 49%as a vested interest - for Thailand to remove the 49% restriction on high end condos; in brief thus:

- thailand needs to maintain its tourist earnings in the face of growing competion from its neighbours.

- thailand wantsto lift the 'quality' ie it wants wealthier tourists.

- wealthy tourists would be interested in high end condos - renting or even buying as second homes.

- developers are slow to build such condos because thai buyers for the 51% are harder to find.

- therefore thailand should remove the barrier as an important preliminary to maintaining/boosting the sort of tourism it wants.

[Edonista]

I own 4 condos and shudder at the thought of living in a building with 100% foreigner ownership. The Thai owners and Japanese, as well, provide a grounding to the atmosphere that would evaporate if "les farang bizarres" took over completely. Same with the illegality of farang owning land - the law protects us farang living here far more than it hurts us. If farang could own land, most of us farang would move elsewhere.

Are you a farang's Thai wife in disguise ?

I mean, only farang's Thai wives profit from the prohibition to own land for their husbands.

That way, they can force them to buy property in their names.

Of course wise farangs (which I hope are the majority) think this is crazyness and avoid carefully both marriage and real estate investments (except condos)

[Edonista]

I wonder what happens when one of these condos is sold. Are they allowed to sell to a foreigner? Can these projects remain higher than the 49% ownership rule? How many projects actually ended up being owned beyond the 49% limit?

If anyone can shed some light on these questions it would be most appreciated. What I think donx is asking is whether a Thai owner of a condo can resell it to a foreigner and upset the 49% limit? I have always wondered about that.

Regards.

He cannot. If the 49%limit has been reached,farangs can buy only from other farang owners (that's why farang name units have higher value)

[pkrv]

Donx, Abrack, and Sorry for not responding to your questions on 40%, 50% early sales issue. From direct experience I can only comment on The Park and The Athenee, both of which hit these kinds of figures early on. I believe that The Park sold out its 49% foreign ownership quota around the same time as the building hit 70% sales (but that's a rough guess). I know these are now approaching completion and are old stories, but I know these are true. In essence the Here Is Proof The Bangkok Condo Market Is Still Booming thread goes into this issue, or at least we are trying to explore this aspect.

http://www.thaivisa.com/forum/index.php?showtopic=117237

One of the reasons I started this thread was to explore how Thailand condominium property ownership stacked up with its competitors/contemporises/High end markets (Hong Kong etc).

From the responses:

Hong Kong - No Freehold, Leasehold is possible but appears to be quite complex, and in some instances unclear. (is that correct?)

Thailand - A crystal clear 49% freehold option for Foreigners - 49% of the saleable space. There is also an ability to adapt in a crisis (100% foreign ownership has been possible in the past - but this has not been fully explored)

Malaysia - Still no understanding

Singapore - Appears to be leasehold

Philippines - Another thread has mention this market - We have no other information at this point

All this leads me to think that Thailand has a gigantic edge in the market. It’s Freehold, very low cost (by G7 standards) and a quite tolerant political landscape (though I get the impression they wish to move upmarket and are making life difficult for the undesirable element)

Given others may come to this opinion it is conceivable that G7 countries could take a lot more interest in future. Whilst there are plenty of wealthy Thais they could not match a massive influx of interest. This could cause problems. I too noted the nation article on another thread.

Here is the link for the article in Nation:

http://www.nationmultimedia.com/2007/05/03...ss_30033252.php

This proposes raising the % ownership to 70. This could steady the boat? Is it desirable as an option in an emergency/permanent change?

[backflip]

"steady the boat"

I'm not sure that raising the farang ownership from 49% would do that. In the short term, some projects ("View Talay", for example) would have significant price increases. Most of the available condo developments are not anywhere near the 49% farang ownership level, and I wouldn't expect that the prices in those developments would increase significantly.

[pkrv]

"steady the boat"

I'm not sure that raising the farang ownership from 49% would do that. In the short term, some projects ("View Talay", for example) would have significant price increases. Most of the available condo developments are not anywhere near the 49% farang ownership level, and I wouldn't expect that the prices in those developments would increase significantly.

Sorry backflip, I have in the past watched your posts with interest, but I am not sure if I have understood - perhaps I have been a bit vague - I have seen posts elsewhere which indicate that if you own an apartment under the 49% foreign ownership quota it apparently commands a higher price than one under the Thai 'quota' (sorry very poor choice of words - this is about concepts)? Is this what you are referring to in your first sentence?

On your second sentence, The Thai market differs between home ownership vs condo ownership vs target market. Perhaps I should narrow the field a bit and say 49% foreign ownership in apartments (flats ) above 10m?

[pkrv]

Donx, Abrack, FYI I am seeing reports that

The Address Chitlom, 24+21 Storey : Chidlom

http://www.skyscrapercity.com/showthread.php?t=373643

Has already 'virtually sold out' and has actually yet to get started. Does anyone know how the % ownership quote was managed in this project and the relative sales achieved?

[HAL9000]

Same with the illegality of farang owning land - the law protects us farang living here far more than it hurts us.

I hadn't heard this side of the story before. In what ways does the law protect us?

[cjwong]

Malaysia

Foreigner can own any type of property as long as it is worth more than RM 250,000. It includes the landed property too.

There is a program called Malaysia as 2nd Home.

As long as a foreigner can deposit RM 300,000 into a bank as FD, he can apply for 10 years VISA to stay in Malaysia along with his wife, kids below 21 yo and a maid too.

The deposit can be withdrawn to pay for property after 1 year.

Edited October 19, 2007 by cjwong

[pkrv]

Malaysia

Foreigner can own any type of property as long as it is worth more than RM 250,000. It includes the landed property too.

There is a program called Malaysia as 2nd Home.

As long as a foreigner can deposit RM 300,000 into a bank as FD, he can apply for 10 years VISA to stay in Malaysia along with his wife, kids below 21 yo and a maid too.

The deposit can be withdrawn to pay for property after 1 year.

cjwong - Many thanks for the clarification on Malaysia, deeply appreciated. They do seem to have a more cohesive approach to property ownership , although the Thai 49% rule on Condo ownership is quite straight forward too.

If only Malaysia's laws were not based on Religion they may be a good bet - always worth watching.

Purely as information the Thai law on the 49% rule is enshired in

'The Condominium Act B.E 2522 (1979)' with obviously ammendments.

http://www.dol.go.th/low_ministry/commandm...do_no3_2542.htm

Googling 'Condominium Act B.E 2522' brings up more details

[Naam]

Malaysia

Foreigner can own any type of property as long as it is worth more than RM 250,000. It includes the landed property too.

incorrect information. quite a percentage of properties is reserved for "bumiputeras" (ethnic malays). these properties can't even be bought by malaysian citizens of chinese or indian ethnic descent.

[cjwong]

Malaysia

Foreigner can own any type of property as long as it is worth more than RM 250,000. It includes the landed property too.

incorrect information. quite a percentage of properties is reserved for "bumiputeras" (ethnic malays). these properties can't even be bought by malaysian citizens of chinese or indian ethnic descent.

Let me do some clarification.

When there is a new housing project, there are an allocation (about 30% I thinks) in terms of unit must be allocated for Bumiputeras (ethnic malays). We called these unit - Bumi Lot. These lots can be sold to non-bumi after 5 years (or lesser, I need to check.). Majority of the projects can be owned by Malaysian Chinese/Indian.

As a Malaysian Chinese, we are not too concern with Bumi Lot. There are ample of properties in Malaysia available for us to purchase. The limitation is the $$$$ we have in hand. Property Developer are the smart lots. They know how to play with the allocation numbers.

For foreigners, the cap is RM 250,000. It can be landed property too.

Due to over supply of property in Malaysia, government has loosen the regulation. Owning a property in Malaysia has become easier.

There are quite a number of applicants who were granted visa via Malaysia as Second Home program.

News Link

http://biz.thestar.com.my/news/story.asp?f...mp;sec=business

If you want to know, type MM2H and search via google. There will be a tonne of Malaysian Real Estate Agent welcoming you to Malaysia.

Don't worry about Bumi Lot. You will not face such much problem for High End Market.

If you need a comparison between Malaysia vs Thailand lifestyle, do let me know.

[cjwong]

If only Malaysia's laws were not based on Religion they may be a good bet - always worth watching.

Malaysian Law is based on Commonwealth (UK) Law. We have our high courts similar to most commonwealth countries such as Singapore/Australia and etc.

There is another court called Syariah Court. The function of this court is to govern the Muslims. Generally, it is not applicable to non-muslims.

I don't think Religion should be considered a main concern. 40% of Malaysian population is non muslim. Most of them residing in the Major Cities.

Generally, properties in Malaysia is much cheaper than Thailand.

[pkrv]

Sorry to disagree but a country whose laws are governed by religion is an important part of any decision, and it doesn't matter which one! For example I would never invest in America either.

I believe in spiritual consent - not spiritual rape - and I am really against spiritual paedophilia.

Laws and stability are a product of secular ideals, not doctrine, and it is dead easy to spot when secular ideals are overridden – sections of the community are kept down discriminated against or outlawed.

Given my views I see more stability in Thailand, though it is not perfect by any stretch of the imagination. So I see the 49% rule on condos as a better option than the more structured Malaysian offering, even if Malaysia is cheaper.

This is just a personal perspective on one of the reasons for my choices.

Edited October 20, 2007 by pkrv

[donx]

Sorry to disagree but a country whose laws are governed by religion is an important part of any decision, and it doesn't matter which one! For example I would never invest in America either.

I can't agree with you on this pkrv. I don't know where you get the idea that America's laws are governed by religion because IMHO they aren't. If they are then why do we have legal abortions? What religion is responsible for that law?

[pkrv]

Hi donx. Try this link

http://www.coolnurse.com/consent.htm

If secular laws and human rights were enforced all sections of the community would be treated equally. I think the US is also in difficulty with civil partnership as well. It would appear that spiritual rape is at work (some belive that they have the right to force their religious views on people who reject these concepts utterly) and there is no legal mechanism to protect against this type of utter violation. I don't think children have the capacity to consent by the way.

Sorry we are bit off topic but I do actually consider how minorities are treated, I believe it's a good indication of the level of maturity of the secular process and every ones rights are treated equally.

Secular concepts do also protect Religions but not to the exclusion of others rights.

I think Human Rights/secular principles preclude voting to create a subclass of citizans - Good god you could lose your home on real or trumped up charges

Edited October 21, 2007 by pkrv

[donx]

Hi donx. Try this link

<a href="http://"http://www.coolnurse.com/consent.htm"" target="_blank"><a href="http://www.coolnurse.com/consent.htm" target="_blank">http://www.coolnurse.com/consent.htm</a></a>

If secular laws and human rights were enforced all sections of the community would be treated equally. I think the US is also in difficulty with civil partnership as well. It would appear that spiritual rape is at work (some belive that they have the right to force their religious views on people who reject these concepts utterly) and there is no legal mechanism to protect against this type of utter violation. I don't think children have the capacity to consent by the way.

Sorry we are bit off topic but I do actually consider how minorities are treated, I believe it's a good indication of the level of maturity of the secular process and every ones rights are treated equally.

Secular concepts do also protect Religions but not to the exclusion of others rights.

I think Human Rights/secular principles preclude voting to create a subclass of citizans - Good god you could lose your home on real or trumped up charges

This is way off topic now. All I can say is it's obvious you don't live in America and if you believe laws referred to in that website you posted are actually enforced to any meaningful extent then you probably haven't been here either.