Thai ombudsmen is drafting a carrot-and-stick law to protect Thai lands from illegal foreign nominee ownership, while developers and consultants suggest more legal transparency, a longer leasehold period and higher foreigner property taxes to prevent nominees.
Siracha: Think of the children
Ombudsman Siracha Charoenpanij said the new law would comprise punishment for companies offering advice to foreigners on how to hold Thai property by disguising their legal transaction. This would include law firms and consultants.
The existing law enforced by the Lands Department requires foreigners found holding Thai property to transfer the plot to someone else or sell it within 180 days.
"The new law includes a reward to anyone providing information about foreigners owning land through nominees. They will get 20% of the market price of that piece of land as a reward after the plot is sold," he said at a seminar on foreign property ownership yesterday held by the Thai Appraisal Foundation.
The new law would also deport foreigners found guilty of holding land plots in Thailand illegally.
Ombudsmen will submit the draft to parliament this year, and Mr Siracha thinks there is backing for the bill.
"Anyone related to the property business may be unhappy with this bill as it will make the market rigid. But this law can help protect the land for the next generation of Thais," he said.
He pointed to a new scheme where foreigners disguise their ownership similar to multi-level marketing, where they are buying shares of an agricultural company that grows rice on large plots in the northeast.
"I've heard there was a broker buying land plots throughout a tambon in Surin to cultivate Hom Mali rice," he said. "If such an act is not prevented, will there be any land left for our children?"
Suphin Mechuchep, managing director of property consultant Jones Lang LaSalle (JLL) (Thailand), said any new law should not weaken Thailand's competitiveness. Yet too free a market would lead to a bubble, so balance is needed, she added.
"We should have transparency if we want foreigners to comply," she said.
She suggested clarity in regulations so foreigners could estimate their investment. Longer leasehold periods such as 50 or 90 years would lower their risk from the current 30 years, she added.
When laws are clarified, she accepted Thailand may charge higher taxes on foreigner property transactions than on those of Thais.
Atip Bijanonda, president of the construction and real estate business department of the Thai Chamber of Commerce, agreed there needs to be balance while still welcoming foreign investment.
He suggested the government set guidelines for foreigners, forbidding their purchase of land banks, farm land, property in border areas, and locations related to the country's security. Foreigners are permitted to buy land in industrial estates because they generate income and employment. Residential units near industrial estates are allowed for foreign investors or executives working there to bring their compatriots to visit Thailand.
About the author
- Writer: Kanana Katharangsiporn
Position: Business Reporter