Foreign condo ownership quota being reviewed
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Foreign condo ownership quota being reviewed

Deputy PM Phumtham says 75% cap will be studied, along with longer lease periods

The government will study the feasibility of raising the level of foreign ownership allowed in condominiums from 49% of a building’s usable space to 75%, according to Deputy Prime Minister Phumtham Wechayachai.

The Ministry of Interior has also been asked to look into whether it is appropriate to increase the length of a leasehold on a property for foreigners from 50 years to 99 years, Mr Phumtham told reporters on Friday.

The proposal was first raised at a cabinet meeting in April, he said, as the government seeks measures to stimulate the economy and attract foreign investment.

Local property industry executives have been pressing for a change in the foreign ownership cap, saying demand from foreign buyers is on the rise.

At the same time, high levels of household debt and tighter lending conditions have been affecting property demand by local buyers. Developers have grown more cautious as a result.

The number of land allocation permits nationwide dropped by 19.7% in the first quarter of this year, the largest decline in nine quarters, as developers adjusted after seeing a consecutive dip in low-rise house transfers, said the Real Estate Information Center (REIC).

The REIC has pointed out that foreign ownership quotas for condos in many popular destinations for foreigners, such as Phuket and Pattaya, are fully occupied in several projects.

“Certain locations do not attract domestic buyers, so the government should increase foreign ownership quotas in those areas to stimulate the economy as the condo market in such locations depends on foreign demand,” Vichai Viratkapan, the acting director-general of the REIC, said recently.

Some projects have addressed the issue by reserving units in each condo project for leasehold contracts, with prices 10-15% lower than for freehold units, as the majority of buyers were foreigners.

According to the REIC, the number of condo transfers by foreigners in 2023 totalled 14,449 units, up 25% from the year before, with the value rising 23.5% to 73.1 billion baht, higher than pre-pandemic levels.

The Chinese were the largest nationality receiving condo transfers, accounting for 45.8% of the total units and 46.7% of the total value, followed by Russians, Americans and Myanmar nationals.

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