Condo quotas

[bradiston]

First time buyer of a condo, though I own a house. I've never given much thought to the 49/51 split of foreign/Thai condo ownership rules, and would have been unable to buy the place I've set my sights on were it not for the fact that my daughter has Thai nationality and hence is able to own it. But it really made me wonder how much of a hindrance this rule is for developers who, having offloaded 49% to eager foreigners, find themselves left with up to 51% impossible or hard to get rid of properties. Doesn't this rule make life extremely difficult for developers, not to mention cash rich foreigners, as it would seem to work against the entire property market?

[OneMoreFarang]

There are only very few places where this rule is relevant.

 

[bradiston]

Just now, OneMoreFarang said:

There are only very few places where this rule is relevant.

 

How come? I thought it was across the board.

[Peterw42]

Thais buys condos as well., its not exclusively foreigners who buy. 

Depending on the area, the foreign quota may never fill up and most sales are to Thais. There are plenty of condo blocks, even in the expat areas, where the majority is Thai owned

Foreigners still buy in the Thai quota doing company ownership, when the foreign quota is full

[bradiston]

I have to correct myself, in that it is 49% of the total floor space in the condo, not 49% of the units, that can be foreign owned. The law seems to have been amended, repealed then passed again over the years. And there seem to be exceptions for eg Bangkok and Pattaya.

 

https://www.samuiforsale.com/law-texts/condominium-act-no3-1999.html

 

I can't make head or tail of it. I shall put the whole thing in my daughter's name. 50/50 satisfactory outcome. I really would have preferred title in my name.

[Henryford]

Why you never see a condo development fully sold. The 49% might go and a few thais as well so 70% is probably the max for most places. No doubt the developers make enought on the 49% sold to farangs so can leave the rest empty.

[bradiston]

1 hour ago, Henryford said:

Why you never see a condo development fully sold. The 49% might go and a few thais as well so 70% is probably the max for most places. No doubt the developers make enought on the 49% sold to farangs so can leave the rest empty.

That figure of 70% suggests the law is completely counterproductive. 30% unoccupation rate is outrageous. The developers have to allow for 30% vacancy (aka NPD) so must increase prices for the 70% they predict they can sell. Why not allow 30% more foreign ownership? It completely distorts the market and benefits nobody. Maybe there's money to be made down at the land offices?

 

 

[tomazbodner]

1 hour ago, bradiston said:

I have to correct myself, in that it is 49% of the total floor space in the condo, not 49% of the units, that can be foreign owned. The law seems to have been amended, repealed then passed again over the years. And there seem to be exceptions for eg Bangkok and Pattaya.

 

https://www.samuiforsale.com/law-texts/condominium-act-no3-1999.html

 

I can't make head or tail of it. I shall put the whole thing in my daughter's name. 50/50 satisfactory outcome. I really would have preferred title in my name.

When I was buying mine, there was a letter from Juristic office listing all non-Thai owners with associated floor area. That was then summarized (including me), for the new total after sale to me, compared to total inhabitable space, and percentage added. In my case it was in single digit.

 

So yes, it is 49% of the living floor space, not 49% of units.

[tomazbodner]

10 minutes ago, bradiston said:

That figure of 70% suggests the law is completely counterproductive. 30% unoccupation rate is outrageous. The developers have to allow for 30% vacancy (aka NPD) so must increase prices for the 70% they predict they can sell. Why not allow 30% more foreign ownership? It completely distorts the market and benefits nobody. Maybe there's money to be made down at the land offices?

 

 

Protecting locals from being priced out of the market like many other countries.

[Henryford]

18 minutes ago, tomazbodner said:

Protecting locals from being priced out of the market like many other countries.

I assumed it was to keep the ownership of any building under Thai control, 51%.

[bradiston]

33 minutes ago, tomazbodner said:

Protecting locals from being priced out of the market like many other countries.

But it obviously doesn't do that as I point out. The fewer they sell, the more they have to increase prices of the ones they can. Are condos really 30% unsold? What is a standard actual ratio Thai to foreigner? Does their system work in preventing prices becoming unaffordable for Thais? Only a small percentage of Thais can afford to buy in any case. Well to do middle classes and up. This has nothing to do with keeping housing affordable for average Thais.

[tomazbodner]

24 minutes ago, bradiston said:

But it obviously doesn't do that as I point out. The fewer they sell, the more they have to increase prices of the ones they can. Are condos really 30% unsold? What is a standard actual ratio Thai to foreigner? Does their system work in preventing prices becoming unaffordable for Thais? Only a small percentage of Thais can afford to buy in any case. Well to do middle classes and up. This has nothing to do with keeping housing affordable for average Thais.

Ours is fully sold out, so are 2 others around it, and they're just building another. Guess it depends on the location, quality of property, price range, finance options and reputation of developer. Like with most other things.

[Delight]

The 51/49  split ensures that foreigners cannot have more land than Thai persons.

The biggest drawback to an apartment in Thai name is that they are more difficult to sell.

Apartments in company names or foreign names sell easier

 

[bradiston]

41 minutes ago, Delight said:

The 51/49  split ensures that foreigners cannot have more land than Thai persons.

The biggest drawback to an apartment in Thai name is that they are more difficult to sell.

Apartments in company names or foreign names sell easier

 

Why is that?

[OneZero]

On 8/22/2023 at 12:44 PM, bradiston said:

Why is that?

A Thai unit will lose foreigner interest if the foreign quota is taken up.   So the seller loses potential buyers.    I would not want to put a condo in a company name (some foreigners will but I don't want the potential negatives associated with that - others can explain).

 

[bradiston]

1 hour ago, OneZero said:

A Thai unit will lose foreigner interest if the foreign quota is taken up.   So the seller loses potential buyers.    I would not want to put a condo in a company name (some foreigners will but I don't want the potential negatives associated with that - others can explain).

 

Ah, I get it. Seems generally speaking a real problem for both developers and potential foreign investors. They can't buy into the Thai 51% even though there are flats available, and sellers willing to sell. Completely mad.

 

I bought 4 small flats in London in a fairly decent development where Chinese buyers were buying whole floors, 10 flats at a time. You could argue the London housing market was a complete shut out for most first time buyers because of the soaring prices. But does this 49%/51% policy actually help lower income Thais could get on the ladder? Or is that not the point of it?

[Liverpool Lou]

On 8/22/2023 at 8:50 AM, bradiston said:

But it really made me wonder how much of a hindrance this rule is for developers who, having offloaded 49% to eager foreigners, find themselves left with up to 51% impossible or hard to get rid of properties.

"...up to 51% impossible or hard to get rid of properties".

Where have you heard of that happening,  when they've been able to sell the full quota to foreigners?     You do know that 99% of the population is Thai, yes?

[Liverpool Lou]

On 8/22/2023 at 10:44 AM, bradiston said:

On 8/22/2023 at 9:26 AM, Henryford said:

Why you never see a condo development fully sold. The 49% might go and a few thais as well so 70% is probably the max for most places. No doubt the developers make enought on the 49% sold to farangs so can leave the rest empty.

Expand  

That figure of 70% suggests the law is completely counterproductive.

Don't pay any attention to that figure, he just pulled it out of his 'donkey'.

[bradiston]

5 hours ago, Liverpool Lou said:

"...up to 51% impossible or hard to get rid of properties".

Where have you heard of that happening,  when they've been able to sell the full quota to foreigners?     You do know that 99% of the population is Thai, yes?

The full foreign quota of 49% gets sold. Any more foreigners are then automatically shut out. Makes sense to you?

[bradiston]

On 8/22/2023 at 10:44 AM, bradiston said:

That figure of 70% suggests the law is completely counterproductive. 30% unoccupation rate is outrageous. The developers have to allow for 30% vacancy (aka NPD) so must increase prices for the 70% they predict they can sell. Why not allow 30% more foreign ownership? It completely distorts the market and benefits nobody. Maybe there's money to be made down at the land offices?

 

 

What's the point of anonymous sad and confused icons except to reveal there are a lot of sad and confused commentators on this forum?

[Dan O]

7 hours ago, bradiston said:

But does this 49%/51% policy actually help lower income Thais could get on the ladder? Or is that not the point of it?

Lots of speculation with many comments here thats slightly off base. It has nothing to do with helping Thais up the ladder. Its about eliminating foreign control of property same as in business ownership. 

[Dan O]

47 minutes ago, bradiston said:

What's the point of anonymous sad and confused icons except to reveal there are a lot of sad and confused commentators on this forum?

I think its because many of the comments are speculation about the ownership drivers and regulations and they are incorrect in the assumptions posted. 

[bradiston]

33 minutes ago, Dan O said:

Lots of speculation with many comments here thats slightly off base. It has nothing to do with helping Thais up the ladder. Its about eliminating foreign control of property same as in business ownership. 

But what would "foreign control of property" amount to? What would owning more than 49% of floor space in a condo really mean? It just seems entirely misguided. What's the reasoning really based on? Foreigners are taking over? The actual land a condo takes up is really insignificant. Maybe 5 rai at most.

 

If I didn't have an immediate relative who has Thai nationality, I wouldn't be able to buy where I want. And the Thai seller really wants to sell. I've seen the ratios. 55.5 foreign. 44.5 Thai. So down at the land office, it's backhanders all round. Just the same at immigration. Make nonsensical laws (800k in the bank etc), and it's a licence for dodgy practices. Maybe that's the point!

[Dan O]

4 minutes ago, bradiston said:

But what would "foreign control of property" amount to? What would owning more than 49% of floor space in a condo really mean? It just seems entirely misguided. What's the reasoning really based on? Foreigners are taking over? The actual land a condo takes up is really insignificant. Maybe 5 rai at most.

 

If I didn't have an immediate relative who has Thai nationality, I wouldn't be able to buy where I want. And the Thai seller really wants to sell. I've seen the ratios. 55.5 foreign. 44.5 Thai. So down at the land office, it's backhanders all round. Just the same at immigration. Make nonsensical laws (800k in the bank etc), and it's a licence for dodgy practices. Maybe that's the point!

You need to broaden your view some. Its not about 1 condo building or 1 city its about all of Thailand.  Thats why they set the laws the way they did, to stop Foreign' s\countries from taking control of the country and having undue influence. Now I know people will say what about all the Chinese investors and their influence on the country, etc. Mostly those are illegal and a blind eye is turned as there is money floated around to look the other way. But legally its not allowed. Unlike many other countries that sell off industries and land and business to the point that a foreign entity can control monetary flows, intellectual property, physical properties. 

 

The laws dont create dodgy dealing and actions its the cultural mindset that allows it to continue at the hiso level and the greed they have.  Its slowly migrated down to the next mid level people and they take the opportunity to try to improve their position.  The average Thai is so poor that they dont bother looking at those issues as they are too busy trying to figure out how to eat this week and enough money in the short term to live. Now that there is an upward movement in lifestyles in the younger generation your finally seeing push back on those abusing power and taking advantage of the general populations. 

[Etaoin Shrdlu]

2 hours ago, Dan O said:

Lots of speculation with many comments here thats slightly off base. It has nothing to do with helping Thais up the ladder. Its about eliminating foreign control of property same as in business ownership. 

This.

[Henryford]

On 8/22/2023 at 12:02 PM, Delight said:

The 51/49  split ensures that foreigners cannot have more land than Thai persons.

The biggest drawback to an apartment in Thai name is that they are more difficult to sell.

Apartments in company names or foreign names sell easier

 

I can't see why people buy in company name. The whole point of buying a condo in Thailand is that it is the one thing a foreigner can own in his name. There are thousands of foreign name condos available.

[bradiston]

3 hours ago, Dan O said:

You need to broaden your view some. Its not about 1 condo building or 1 city its about all of Thailand.  Thats why they set the laws the way they did, to stop Foreign' s\countries from taking control of the country and having undue influence. Now I know people will say what about all the Chinese investors and their influence on the country, etc. Mostly those are illegal and a blind eye is turned as there is money floated around to look the other way. But legally its not allowed. Unlike many other countries that sell off industries and land and business to the point that a foreign entity can control monetary flows, intellectual property, physical properties. 

 

The laws dont create dodgy dealing and actions its the cultural mindset that allows it to continue at the hiso level and the greed they have.  Its slowly migrated down to the next mid level people and they take the opportunity to try to improve their position.  The average Thai is so poor that they dont bother looking at those issues as they are too busy trying to figure out how to eat this week and enough money in the short term to live. Now that there is an upward movement in lifestyles in the younger generation your finally seeing push back on those abusing power and taking advantage of the general populations. 

I'm only interested in the condo thing, not land ownership, business ownership or whatever. How come a Thai doesn't own 51% of my scooter then? Mad.

[Dan O]

7 hours ago, bradiston said:

I'm only interested in the condo thing, not land ownership, business ownership or whatever. How come a Thai doesn't own 51% of my scooter then? Mad.

Unfortunately you cant separate the laws for only 1 aspect to benefit from it and not affect all the other associated areas as they are all connected. I can understand your thinking as the condo issue may only be the area you deal with but you asked the question.

[bradiston]

14 minutes ago, Dan O said:

Unfortunately you cant separate the laws for only 1 aspect to benefit from it and not affect all the other associated areas as they are all connected. I can understand your thinking as the condo issue may only be the area you deal with but you asked the question.

Somebody else dragged in the labour laws. It's not relevant. Nor even connected. Likewise land ownership. I simply don't get the reasoning behind the condo ratios. Maybe it's something Mr Taweesin might look at. After all, it's his line of business.

[Dan O]

9 minutes ago, bradiston said:

Somebody else dragged in the labour laws. It's not relevant. Nor even connected. Likewise land ownership. I simply don't get the reasoning behind the condo ratios. Maybe it's something Mr Taweesin might look at. After all, it's his line of business.

Its all connected that's why its relevant. I'm not saying I agree with it but you can't pull one issue out of the mix without affecting all the other areas. If you could it would be easier to change if Thailand wanted to.