Thailand is exploring significant amendments to its real estate laws to stimulate foreign investment, according to Finance Minister Pichai Chunhavajira. The proposed changes aim to enhance the “rights over leasehold assets” laws, potentially offering longer and more appealing lease agreements to bolster economic growth.
The initiative comes as the government, led by Prime Minister Paetongtarn Shinawatra, seeks solutions to a sluggish economy hindered by rising household debt. The real estate sector, a cornerstone of Thailand’s economy, has faced challenges due to declining domestic purchasing power. The administration is drawing inspiration from previous policies to allow foreigners greater access to the real estate market.
One key proposal involves extending lease terms from the current maximum of 30 years to up to 99 years. Under this framework, land ownership would remain with the state, managed by the Treasury Department, with leases reverting to state control upon expiration. These measures would require amendments to existing state land laws and align leasehold policies with international standards.
Thailand’s 2019 Rights Over Leasehold Assets Act already permits leases ranging from 3 to 30 years, allowing for property transfer and collateral use. However, the law has yet to achieve its intended market impact. A cabinet directive in April 2023 urged ministries to examine longer lease terms, and by June, the Interior Ministry was tasked with advancing the proposals.
Countries such as England, Wales, France, and Cambodia provide models for long-term lease agreements that grant tenants greater rights. These examples could serve as a guide for Thailand as it modernises its approach to real estate, potentially making it a more competitive market for foreign investors.