Move to extend lease period expected to stir interest of foreigners
March 27, 2017 01:00 By Somluck Srimalee The Nation 53,873 Viewed
The move to revise the leasehold act and extend the lease period from 30 years to 50 years will be good for developers who offer residential homes to foreigners, both in Bangkok and at tourist destinations, property experts said.
“This act will support developers who develop property to serve the demand only from foreigners,” Issara Boonyong, chief executive officer of Kanda Group, said.
Finance Minister Apisak Tantivorawong said last week that the ministry has been studying ways to amend the law to extend the length of time foreigners can hold land and property in Thailand to 50 years from the present 30 years in order to boost the realestate sector.
The managing director of property agency firm Jones Lang Lasalle (Thailand), Suphin Mechuchep, said recently the move would boost foreign investors’ confidence to expand their investment in the property market when the leasehold is extended from 30 years to 50 years.
When foreign investors have a leasehold contract for only 30 years, they have concerns about the future even though the land owner may promise them that they can renew for another 30 years, as there is always the possibility of the land owner changing his mind during the interim period.
Longterm contracts will create more confidence among forฌeign investors to expand their investment in Thailand’s real estate market, she said.
“When the revised act comes into effect, it will open up the opportunity for foreign buyers to hold residential leases as in Singapore and Malaysia. It would boost residential demand when the country is becoming the gateway to the Asean Economic Community,” said Thai Condominium Association president Prasert Taedullayasatit, who is also president for premium marฌket at Pruksa Real Estate.
If the government approves extending leasehold for residentials from 30 years to 50 years, it will become one of the countries in Asean offering longer leasehold tenure. Vietnam also revised its law last year allowing foreigners to extend their property ownerฌship after their 50year ownership period expires under the Housing Law, for an additional 50 years, according to Viet Nam News. Singapore and Malaysia lead the way in Asean in terms of opening up opportunities for foreign investors, with maximum 99year leases, which are far longer than any offered by other member states.
Cambodia, Myanmar and the Philippines are also offering 50year leases to foreign investors, while Laos and Indonesia allow a 30year lease on land to foreigners, according to a report by property agency CB Richard Ellis (Thailand).