Finance Ministry Pushes 99-Year Leases for Foreigners

[webfact]

 

Deputy Prime Minister and Finance minister Pichai Chunhavajira confirms the government is moving forward with a project to allow foreigners to lease condominiums for 99 years, aiming to stimulate the real estate sector, which has over 200,000 unsold units.

Pichai on Wedensday gave a keynote speech and special discussion on the topic “Developing Sustainable Real Estate.”

 

He acknowledged that the real estate business is currently facing issues with over 200,000 unsold condominium units. People are unable to purchase due to increasing household debt, a matter the Ministry of Finance and the government must urgently address to prevent further impact on Thailand’s overall economy.

However, the Ministry of Finance sees that allowing foreigners to lease condominiums for 99 years is a suitable policy to reduce the backlog of unsold units. Yet, there must be clear zoning criteria determining where foreigners can lease, with each unit valued at more than 30-40 million baht.

 

Full story: TNA-MCOT 2024-07-12

 

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[Zack61]

Not sure this is going to put much of a dent in these numbers- if at all. 
I think the onus must be on the developers to reassess their business strategies and find a better way to invest. Seems they are following the Chinese example and hoping for a different outcome. 

[Mason45]

The simple solution is cut out the Thai/Foreigner ownership rule. Any foreigner should be allowed to own a property in their name. Maybe they could place a ceiling on the cost and/or land size as in houses. Maybe a one property per farang limit. Take my instance, I've been married for 22 years and I can't even be a joint property owner with my wife.

[ChasingTheSun]

This would destroy the home-ownership dreams of Thai people.

 

Pathetic shortsighted idea sponsored by land owners and builders.

[hotchilli]

2 hours ago, webfact said:

Deputy Prime Minister and Finance minister Pichai Chunhavajira confirms the government is moving forward with a project to allow foreigners to lease condominiums for 99 years, aiming to stimulate the real estate sector, which has over 200,000 unsold units

Drop the price and the locals can afford one.

[rwill]

The best solution is to stop overbuilding.  (Which you know they are going to blindly continue to build)

 

Why would you want to lease a unit when you can buy one?

 

Now if they were talking about 99 year leases for land that would be something else.

[ikke1959]

Maybe they should do something for the Thai people so that they are going to be able to buy and own a house.. Foreigners okay, but the biggest market are the Thai people, but with the current wages, labour laws, and greed of gthe rich it will impossible for the Thai ever to own or buy something and get some assets..

[Banana7]

Who financed the construction of all these unsold condos? Most prudent lenders would want to see at least 50% sold on plan units before lending anything to the developer.

[Banana7]

2 minutes ago, rwill said:

The best solution is to stop overbuilding.

 

Why would you want to lease a unit when you can buy one?

 

Now if they were talking about 99 year leases for land that would be something else.

If a condo price is 30-40M baht, not many have an adequate down payment to buy. So maybe they can afford an adequate monthly lease payment

[mokwit]

2 hours ago, webfact said:

Yet, there must be clear zoning criteria determining where foreigners can lease, with each unit valued at more than 30-40 million baht.

As always Thailand seeks to dictate inequitable terms and then wonders why nobody is interested.

[Scouse123]

1 hour ago, Mason45 said:

The simple solution is cut out the Thai/Foreigner ownership rule. Any foreigner should be allowed to own a property in their name. Maybe they could place a ceiling on the cost and/or land size as in houses. Maybe a one property per farang limit. Take my instance, I've been married for 22 years and I can't even be a joint property owner with my wife.

 

Agreed 27 years,here sir

 

Same story.

 

but they walk into to he UK and buy anything they want in their own name.

 

They are lot less vocal in the UK because they earn fabulous money and get the benefits of democracy.

 

No big mouth anti foreigners rhetoric when they are in our country.

 

Fairness is  a two way street

 

 

 

 

 

 

[renaissanc]

The government will attach so many strings to the idea that it will be useless. For example, why should the value of the condominium matter? How many foreigners want to buy let alone lease a condominium worth 30+ million Baht? Very few, I expect. You are better off renting a condominium or house. The politicians are crazy as usual. 

[Paul Henry]

Most condos will not be standing in 99 years.All the ones I have stayed in (New or near new) are already falling apart walls cracking,doors not fitting correctly,plumbing that is third rate and the list goes on. Don't know whether the tradesman are up to the job or the developer wants everything on the cheap.

[koolkarl]

Zero interest with their tinkering.

[Peterphuket]

Have asked the question before but is it true if you buy a condominium worth more than 4 million thb, you have to pay 35% tax?
If the answer is yes, then I cannot imagine anyone buying anything in LOS anymore.

[DonniePeverley]

The Thai economy is a very delicate system. 

 

This will push rents up for many local Thai's. If that happens, workers will demand more wages. More wages means prices pushed onto the consumer, and a reduction in workers. 

 

At the moment labour is plentiful in Thailand, as locals can by and large afford housing, even in central Bangkok. As a result you have a pretty content population. 

 

You mess with this eco system at your peril. 

[bob smith]

99 year lease today, visas cancelled for farangs tomorrow.

 

What foreigner in their right mind would invest in a country that has a proven track record of flip-flopping on almost every policy they have ever implemented?

 

are these clowns so utterly clueless as to how they look on the world stage?

surely they can't be that dumb?

 

right?

 

bob.

[Kerryd]

Quote

Yet, there must be clear zoning criteria determining where foreigners can lease, with each unit valued at more than 30-40 million baht.

There's more to this than is being told. I seriously doubt there is such a huge market for "30-40 million baht per unit" condos in "select zones" that the gov't feels the need to push for legislative changes.
And I seriously doubt there are over 200,000 empty condos in the "30-40 mil baht per condo" category. At an average of 35 mil each that would equal over 7 TRILLION baht in unsold units.)

And he's talking about "clear zoning criteria" - meaning only allowing those 99 year leases in select areas. Which makes you wonder as, again, I highly doubt there's 200,000 high end condos all clustered together in one small area that could be zoned for "foreigners" to acquire with 99 year leases.

Unless someone knows "something" and perhaps has already purchased some land in a soon-to-be-approved "foreigner zone" where those very high end, exclusive condos would be built ?

And the 99 year lease sort of gets around the annoying "49% foreign ownership" rules so that entire buildings can be effectively "owned" by those foreigners. Not to mention that it's highly unlikely that any condo building would even still be around in 99 years. Most will be lucky to still be standing 50 years from now.
(50 years or so from now, it will be a lot easier to get out of a lease in a soon to be condemned building than it will be to sell a condo in the same building.)
And pretty much any building built today would be deteriorated, decrepit, decayed and extremely outdated in 50+ years and likely a prime target for demolition to make way for a newer, fancier (whatever).

Gee, I wonder who the market would be for high end luxury condos in "exclusive for foreigners only" zones ?

Maybe businesses (that can write leases off as business expenses) from a certain country that want luxury accommodations for it's top executives and don't want to have "other" nationalities in close proximity ? 

I mean seriously, who do they think is going to buy those "30-40 million per unit" condos ? Certainly not all those "zero dollar" tourists they've been trying to attract for the last few years.

There is only one group that would benefit from this and that's the group that builds (and sells) those condos.
And realistically, there's only one group that would be "leasing" them as well. 

[Celsius]

200,000 unsold condos.

 

Can we pretty please pass this so we can have 350,000 unsold condos.

[ThaiFelix]

So they change the law to allow 99 year leases to help clear a lot of unsold units just like they changed the law making cannabis legal but now, people who invested in cannabis are going to be out of pocket because now they want to reverse that law??

 

Gives me great confidence in investing in condos or anything here for that matter.    

[Johno57]

With the tax laws changing it can only get worse for property, condos,cars , shopping centres etc. Because nobody wants to live or invest in a country with double taxation & laws that continue to change without notice..

[Kwaibill]

What use is a 99 year lease for foreigners  unless willing it to another farang? I can see it being of use to some commercial owners, but enough to clear a meaningful percentage of the estimated overstock?

The keyword is “overstock”. I was briefly tempted by an offer to purchase a unit I had been renting for 600,000, but the complex was already showing its age. 
Is it just me, or are Thai people averse to most types of maintenance? This from the perspective of one who has lived in 200+ year old buildings in the US.

[spidermike007]

Best solution is to lower prices. Greedy developers, who were too lazy to do any market research, before building. The numbers are likely far higher. The economy is sluggish, and the correction has not even come yet. If you are thinking of buying, just wait 

[David9]

1 hour ago, bob smith said:

99 year lease today, visas cancelled for farangs tomorrow.

 

What foreigner in their right mind would invest in a country that has a proven track record of flip-flopping on almost every policy they have ever implemented?

 

are these clowns so utterly clueless as to how they look on the world stage?

surely they can't be that dumb?

 

right?

 

bob.

They are even dumber. No, they are simply brainless, dumb is too clever for them. And aside of brainless, they have an unbelievable ego and pride of what they are. Which is very hard to understand by the outside world.

[Surasak]

1 hour ago, bob smith said:

99 year lease today, visas cancelled for farangs tomorrow.

 

What foreigner in their right mind would invest in a country that has a proven track record of flip-flopping on almost every policy they have ever implemented?

 

are these clowns so utterly clueless as to how they look on the world stage?

surely they can't be that dumb?

 

right?

 

bob.

TIT, Bob. Dumb is the operative word.

[bob smith]

5 minutes ago, David9 said:

They are even dumber. No, they are simply brainless, dumb is too clever for them. And aside of brainless, they have an unbelievable ego and pride of what they are. Which is very hard to understand by the outside world.

I know.

 

most thais never leave Thailand.

 

They are stuck inside an echo chamber in which Thailand is the center of the universe.

 

bob. 

[crazykopite]

I would never buy a condo if im

denied  voting rights plus if there going to do it for condos why not do it with land a straight lease of 99 years 

[Surasak]

If this is the best the finance minister can come up with, as a solution to filling empty condo's, I wonder how the country is not in very serious debt? Or is it a clever game of smoke and mirrors?

[Enzian]

1 hour ago, spidermike007 said:

Best solution is to lower prices.

A thing is only worth what others are willing to pay. If there are unsold units then it means the developers and owners have a break-even level that they are currently unwilling to go below. But as Pita mentioned the possibility of catastrophe in another thread, here we have the question of when the economy will reach the point of general capitulation, when the majority just gives up and takes what they can get, and hopes they will survive the effective margin calls. But as far as trust in the policy makers of this country, the damage has been done.

[MalcolmB]

4 hours ago, Scouse123 said:

 

Agreed 27 years,here sir

 

Same story.

 

but they walk into to he UK and buy anything they want in their own name.

 

They can not really walk in because it is hard to get a visa that they must apply for and pay for even if it gets rejected.

4 hours ago, Scouse123 said:

 

They are lot less vocal in the UK because they earn fabulous money and get the benefits of democracy.

 

most are struggling with the terrible economy especially the many who operate thai restaurants that are really feeling it with the cost of living crisis

4 hours ago, Scouse123 said:

 

No big mouth anti foreigners rhetoric when they are in our country.

 

Fairness is  a two way street

 

 

I think you will find us Brits complain about foreigners more than you will hear the Thais whining about foreigners.

It was what got Brexit over the line.