The cabinet approved on Tuesday the Interior Ministry's proposal to allow foreigners to hold land ownership of up to one rai (roughly 0.16 hectares) for residential purposes, though critics warned the move may trigger land speculation by foreign investors.
According to government spokesman Anucha Burapachaisri, the weekly cabinet meeting approved in principle a draft regulation of the Interior Ministry regarding land ownership by foreigners, allowing four groups of rich foreign nationals -- wealthy global citizens, wealthy pensioners, people who want to work from Thailand, and highly skilled professionals or specialists -- to buy and own land for residences.
The proposal marks a departure from long-standing laws limiting land and property purchases, except condominiums, to Thais or people married to Thais.
Over a period of five years -- from now through 2026 -- the government hopes to attract more than a million wealthy expats to Thailand.
The government estimates the scheme will inject more than 1 trillion baht into the economy, with an uptick of 800 billion baht in investment and 270 billion through revenue collection.
According to Mr Anucha, the land slated for foreign ownership should be located in Bangkok, the Pattaya area, the municipalities of all provinces nationwide, and areas stipulated as residential zones according to the Town and Country Planning Act.
Qualified foreign nationals must invest 40 million baht in Thai property, securities or funds to participate in the scheme. They are required to invest in real estate or infrastructure funds, real estate investment trusts, securities, or enterprises promoted by the Board of Investment.
If participants withdraw their investment before the designated period, their land ownership rights must be revoked, he said. The proposed scheme becomes effective after publication in the Royal Gazette.
The scheme would be reviewed after five years, said Mr Anucha.
"The proposed scheme aligns with the government's economic and investment stimulus plans to attract wealthy foreigners and professionals to Thailand. This is expected to help draw foreign investment and stimulate the Thai economy," he said.
Land grab unwelcome
Tanit Sorat, vice-chairman of the Employers' Confederation of Thai Trade and Industry, disagrees with the cabinet's decision, citing the possible impact on future land purchases made by locals as well as land ownership issues.
"Thailand may be headed for trouble involving land speculation, meaning locals may be unable to afford to purchase land because of higher prices," he said. "We are worried about Chinese investors. They already bought and own plots of land in Cambodia and Laos."
Mr Tanit said he understands the government wants to stimulate the economy by offering land ownership to foreigners to draw investment, but he said there are other ways to ramp up the economy.
"Why didn't the government consider granting Thai nationality to foreigners who can apply their technological expertise to help the nation develop high technology at the Eastern Economic Corridor (EEC)?" said Mr Tanit.
The EEC is a government scheme to develop a high-tech industrial hub with the potential to draw foreign direct investment, spanning parts of Chon Buri, Rayong and Chachoengsao provinces.
In contrast, the Federation of Thai Industries (FTI) said earlier the land ownership policy could be a positive economic stimulus. FTI chairman Kriengkrai Thiennukul said many wealthy foreigners, notably those in business, would enjoy a long stay here for retirement.
Domestic tourism operators will benefit if this policy can attract more foreigners, he said.
Sanan Angobulkul, chairman of the Thai Chamber of Commerce, said the scheme is not new as it was used following the Tom Yum Kung crisis to stimulate foreign investment and revive the economy.
"The scheme was successful back then in resuscitating the economy. We hope it can revitalise the property market and the Thai economy," he said.
The chamber projects the scheme to draw investment of at least 100 billion baht a year.
The cabinet also approved the Oil Fuel Fund securing loans worth a combined 150 billion baht to boost its liquidity. Mr Anucha said the loans will be divided into two phases, with the first worth 30 billion baht via two batches between December and February, and the second worth 120 billion divided into six batches ending in July 2023.