Government may raise foreign condo ownership limit to 75%

The government considers increasing the foreign ownership limit in condominiums from 49% to 75% of a building’s usable space, as disclosed by Deputy Prime Minister Phumtham Wechayachai.

The Interior Ministry is evaluating the feasibility of extending the maximum leasehold period for foreigners from 50 years to 99 years.

Phumtham stated that this proposal was first discussed at a Cabinet meeting in April. The aim is to introduce measures that will stimulate the economy and attract foreign investment.

Executives in the local property industry have been advocating for an increase in the foreign ownership cap due to the growing interest from foreign buyers. Simultaneously, high levels of household debt and stricter lending conditions have been impacting the demand for property among local buyers, leading developers to adopt a more cautious approach.

The Real Estate Information Center (REIC) reported a 19.7% decline in the number of land allocation permits nationwide during the first quarter of this year, marking the largest drop in nine quarters. This decrease is attributed to developers adjusting to a consecutive dip in low-rise house transfers.

The REIC noted that foreign ownership quotas for condos in popular destinations such as Phuket and Pattaya are fully occupied in several projects.

Vichai Viratkapan, the acting director-general of the REIC commented that certain locations do not attract domestic buyers.

“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.”

Some projects have responded to this issue by reserving units for leasehold contracts with prices 10 to 15% lower than freehold units, catering primarily to foreign buyers.

According to the REIC, the number of condo transfers to foreigners in 2023 reached 14,449 units, up 25% from the previous year. The value of these transfers increased by 23.5% to 73.1 billion baht, surpassing pre-pandemic levels, reported Bangkok Post.

The Chinese were the largest group of foreign buyers, accounting for 45.8% of the total units and 46.7% of the total value. They were followed by Russians, Americans, and Myanmar nationals.