Foreign condo ownership policy 'conflict of interest'
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Foreign condo ownership policy 'conflict of interest'

Visitors examine building plans and models at a house and condominium fair in Bangkok in March. (Photo: Varuth Hirunyatheb)
Visitors examine building plans and models at a house and condominium fair in Bangkok in March. (Photo: Varuth Hirunyatheb)

A caretaker senator has warned that the government's plan to allow up to 75% foreign ownership of condominium building units, up from 49%, may involve conflict of interest and shake the seat of the prime minister.

Somchai Swangkarn wrote on Facebook on Tuesday that the government's policy to raise the proportion of foreign ownership of condominiums and extend the length of foreign leaseholds on a property from 50 years to 99 years involved a possible conflict of interest.

It would benefit property businesses connected to cabinet ministers, including Prime Minister Srettha Thavisin.

Mr Somchai claimed the listed property developer Sansiri, a major player in the business, was owned by Mr Srettha’s family.

Mr Srettha founded Sansiri in 1984 and the company was listed on the Stock Exchange of Thailand in 1996. When he agreed to stand as a prime ministerial candidate of the Pheu Thai Party in March last year, Mr Srettha transferred all his holdings, 661,002,734 shares, in Sansiri to his daughter Chananda Thavisin. She currently holds 553,002,734 shares, or 3.14% of the total in the company, according to SET records.

Any cabinet decision on foreign ownership of condominiums and on property leases could be considered a conflict of interest, which was prohibited by the constitution and violated the Organic Act on Anti-Corruption, the caretaker senator wrote.

Interior Minister Anutin Charnvirakul said that the cabinet last week ordered a study be made of the policy. It was not on the cabinet agenda for this week's meeting. The Land Department was considering the pros and cons of the policy.

He said that the government needed to stimulate the economy and the proposed changes would not favour capitalists. The rights of Thai people would be protected, along with the economic stimulation, Mr Anutin said.

Sopon Pornchokchai, president of the Agency for Real Estate Affairs, said property lease periods for foreigners were limited at 50 years in Cambodia, China, Myanmar and Vietnam, 30 years in Indonesia and 60 years in Singapore.

The proportion of foreigners' ownership of condominiums was capped at 30% in Vietnam, 49% in Indonesia and 50% in Malaysia, he said.

The policy of the government posed the risk of transnational crime, money-laundering, economic manipulation and to national security, he said.

Mr Sopon also suggested the government set minimum condominium purchasing prices for foreigners at 10 million baht, so that low and middle-income Thais could still afford them.

In addition, foreign buyers should be prohibited from selling purchased condominiums for three years, to deter speculation, he said.

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.

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