The Office of the Ombudsman is seeking support for a law to prevent foreigners illegally owning land via nominees.
The legislation was discussed Monday at a seminar organised by the Office of the Ombudsman, which wants to push the bill for parliament's scrutiny.
The 40-section bill targets foreigners illegally holding land in Thailand, their legal consultants and their nominees.
Foreigners holding land plots in Thailand illegally would face five to 20 years in prison and/or a fine of 500,000 baht to 2 million baht, while the consultants would face two-thirds of whatever penalties are imposed on the wrongdoers.
Under the bill, a committee to investigate "hidden" transactions would be set up.
One provision in the draft allows those found to be holding Thai property illegally to transfer the plots to legitimate entities within one year to avoid being punished.
Ombudsman Siracha Charoenpanij said the proposed law aims to close loopholes being exploited by foreigners.
Currently, foreigners are allowed to own land through a number of channels such as setting up a registered limited company with 51:49 Thai:foreign ownership, or by marrying a Thai.
"We must bring to account the foreigners, Thai nominees and legal advisers," he said.
He said the Office of the Ombudsman would propose a regulation overseeing nominee ownership before the law takes effect. It would require the interior minister and the interior permanent secretary to investigate "hidden transactions" and take legal action against offenders.
Mr Siracha said that based on the office's study, much of the land in major tourist destinations such as Koh Samui, Phuket and Koh Chang is owned by foreigners.
He said another concern was that foreigners allegedly "seized" agricultural areas through either purchase or lease.
"If we don't do anything, they will take control of it all _ tourism, residential and farming," he said.
Prasop Butsarakham, a legal adviser to House speaker Somsak Kiatsuranont, backed the proposed changes.
He suggested Mr Siracha ask major political parties to submit their own versions to parliament to avoid conflicts.
Prasong Lertratwisut, a member of the law reform committee, however, pointed out that the problem lay with lax enforcement of the law.
Mr Prasong said land grabs were widespread among Thai investors and suggested a tax measure to address it.
He said information on land ownership should be made public as this would allow the state to collect taxes on unused land.
Mr Prasong believes such a measure would force many landowners to sell their plots to avoid paying taxes.
Pirapan Premputi, former secretary-general of the Anti-Money Laundering Office, also raised concerns about lax law enforcement.
He said existing laws, such as the anti-money laundering law, should be amended instead of drafting a new law.
Department of Business Development deputy chief Wichai Potchanakij said political will was needed if the problem was to be properly addressed.
Mr Siracha said he would submit the bill along with a study on nominee land ownership to the premier, parliament and the two biggest political parties before the end of the current session.