This letter is penned in response to the new interior ministry regulation that went into effect on may 25. The new regulation is designed to halt "shell property companies" attempting to circumvent section 74 of the land act by allowing foreigner land ownership.
I would like to say that I agree with the deputy permanent director of the ministry in that it should be government policy that foreigner ownership of land not be allowed. That being said it is common knowledge that foreign ownership of land through these illegal shell companies is a huge business here in Thailand creating many thousands of jobs and opportunities here in the kingdom.
The benefits of this illegal trade are enormous as there are whole industries and businesses that cater to these foreigner enclaves, businesses from furniture to appliances to automotive to medical are all thriving and growing in these foreigner second home resort areas such as Phuket, Pattaya etc. The list of services, products, jobs and economy that this illegal trade produces would be hard to quantify in full.
This all ended on May 25th. In a tourist oriented economy there is nothing like having permanent high income tourists. At the present time the only way a foreigner can "buy" property in Thailand is through a sham shell company. This takes a
special type of foreigner in that he must have all cash for such an illegal transaction in that no bank would finance such an endeavour. Also he knows that at any moment the government can simply seize his illegal investment. I believe there must
and should be a middle ground here. One solution would be creating housing estates only in certain locations in Thailand such as Phuket, Pattaya etc. In the estate only 49% of the estate could be sold to foreigners in this manner, the majority
or 51% would be Thai owned. The property would be in the foreigner's name and be transferable to another foreigner. The foreigner would also pay a special non-immigrant land tax yearly for this privilege. This plan would create a new class
of foreign buyer who would have total confidence in his investment and easier financing. The foreigner housing industry is non polluting and creates a real good economy, just ask Dubai which is doing everything it can to attract these type of
foreigner buyers that Thailand is about to lose.
In addition since there is only a caretaker government in Thailand at the moment this matter may drag on until an elected government takes office. I hope the new government will consider this matter at the earliest possible time but in the event that it is finally decided that there should simply be no foreigner ownership of land period. Full stop. This is certainly a likely outcome depending on who will be the new government. I wish the new government if it decides to ban foreigner ownership would also curtail these overseas property expos selling Thai land. It has always been a mystery to me how there can be these huge property expos in Hong Kong etc when the people there are not allowed to own Thai land.
In my opinion I think this crisis is the best thing that could happen to the property market. A lot of people may think that this is just a tempest in a teapot in that a foreigner can just simply put the property in the name of his Thai wife girlfriend etc this also is against the law, even though there has never been a crackdown and enforcement is lax at best. I wonder why this provision of the law has no teeth. I guess you only need the Stickman articles to get your answer but what is taking place is that there is a new type of foreign buyer arriving on Thai shores. This buyer already has a spouse and this buyer is only interested in Thailand, not in a Thai spouse, so putting the property in a Thai name is not an option for these high end buyers.
If the government implements a plan similar to the one I have described above it would have many benefits in that only certain so called resort locations would be involved that the land would be in housing estates that under no circumstances would aliens be allowed to be involved with agricultural land. Of course this is what it is really all about. Once these parameters are set the government would have more control over growth in Thailand in that if there were simply too many foreigners in a resort area and their number became bothersome the government could simply stop certifying land for developments in that area.
If some enterprising tambon in the middle of nowhere Isaan decided it wanted the benefit of foreigner buyers it could petition the government to allow it to have alien developments build it and the will come should be the slogan for Thailand.
Some Thais may tell you that they do not want to compete with foreign buyers for land but the land the foreigners want in these resort areas is basically worthless to the Thais since it is not agriculturally viable. Also much of the land that
is being sold to aliens today is government land that has been encroached upon. The so called titles are of no value under my system. The foreigner buyer would have complete confidence in his title. The last government agent sent to Phuket to
check on land titles was assassinated so my plan really protects everybody and can be used for long range growth and planning. Hopefully the next government will decide once and for all about foreigner involvement in land ownership.
A lot of foreigners have been out off buying land in Thailand. That said, anyone who bought a condo in the last 5 years has made a lot of money, on paper at least.