50-year leases likely for foreigners

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Nereus
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50-year leases likely for foreigners

Post by Nereus » Fri Mar 24, 2017 3:58 pm

50-year leases likely for foreigners

http://www.bangkokpost.com/business/new ... foreigners

The Finance Ministry is considering amending laws to allow foreigners to buy properties through leasehold, according to minister Apisak Tantivorawong.

Currently, foreigners cannot own land in the kingdom. They can only buy condominium units up to 49% of total sellable space in a project.

Foreign businesses with Board of Investment privileges or wealthy investors who agree to commit a certain sum can enter into 30-year leases, with the option for one 30-year renewal. (not sure where he got this from :? )

"If we can amend the leasing law to support leasehold, foreigners can lease Thai real estate for a long term, possibly up to 50 years, and sell the rights," Mr Apisak said on Friday.

Allowing them to lease properties for a long term and to sell the leasehold rights will give them a sense of ownership. Once the leasehold ends, the property remains in Thai hands, he added.

"We're studying the possibility and the chances are high that related laws can be amended to that effect. If we can do that, we can expect another property boom [a first after the pre-1997 period].

"Allowing leasehold will unleash demand from around the world. It will also change the structure of the property market in which foreigners will become customers alongside Thais," he said.

Real estate is a crucial sector in the Thai economy as it is closely linked to other sectors -- from construction materials, decorations and electrical appliances to banking.

"When the economy is about to hit a slump, the property sector always shows early-warning signs. When the economy picks up, the sector is always the first to show a sign of life. That's why this government pays attention to the sector."

The government has launched projects to stimulate the sector, ranging from housing for low-income earners, and senior complexes to the Eastern Economic Corridor (EEC), which will stimulate housing demand in Chachoengsao, Chon Buri and Rayong.

The former Krungthai Bank president also mentioned a "windfall tax" to be imposed on land and buildings benefiting from state projects such as mass transit lines because their value would increase.

"Fundamentally, the windfall tax will be based on the value increases before and after the state projects and only when the properties change hands," he said.

Cabinet ministers on Tuesday revised and approved for the second round the new land and buildings tax bill to be forwarded to lawmakers.
The cabinet version sets the ceilings at 0.2% for farmland, 0.5% for houses and residential land and 2% for land and buildings for other purposes.

Vacant land will be taxed at 2%, to be increased by 0.5 percentage points every three years to a maximum of 5%.
Exemptions are for houses and farmland worth not more than 50 million baht. The measurement unit to be used in the calculation is square metres to minimise the use of discretion by officials and reduce corruption.

"These rates are the ceilings so in practice they will be lower. For example, a house worth more than 50 million baht will be taxed at 0.05% only. But in the case of a person having more than one house, the second will be taxed from the first baht [without exemption for the first 50 million baht]."

The tax for a second house starts at 0.03% and if it is worth more than 50 million baht, the 0.05% rate will apply.
For other property types, the rates are 0.3% for value below 20 million, 0.9% for those valued at 100 million to 1 billion baht and 1.5% for more than 3 billion baht.

Certain businesses are also eligible for reduction such as schools (90% discount) or housing estates under construction (90%) for three years.

Once the law takes effect in January 2019, local governments will be able to collect 60  billion baht in taxes, compared to 20 billion baht under the current local land tax law and the building and land tax law.
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Re: 50-year leases likely for foreigners

Post by prcscct » Fri Mar 24, 2017 4:28 pm

It it comes to pass, they also need to amend visa and visa waiver policies to fit. If a person owns one of these properties and comes from a visa waiver country, he should be allowed unlimited entries via any mode/crossing and not be restricted by existing rules. In fact they should offer a special open ended "homeowner visa" expressly for these people that can be acquired here or from your home country Thai embassy. Pete :cheers:
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Re: 50-year leases likely for foreigners

Post by Bristolian » Fri Mar 24, 2017 6:25 pm

If ever this becomes law there will be so many strings attached it will look like the groom's wrist at a Thai wedding.
Wait until full details are published. The Thai reasons for not doing it outweigh the benifits. House prices would increase and price out the Thai buyer who of course wants to own the land and not lease it.
Last edited by Bristolian on Fri Mar 24, 2017 6:47 pm, edited 1 time in total.
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Re: 50-year leases likely for foreigners

Post by StevePIraq » Fri Mar 24, 2017 6:45 pm

prcscct wrote:
Fri Mar 24, 2017 4:28 pm
It it comes to pass, they also need to amend visa and visa waiver policies to fit. If a person owns one of these properties and comes from a visa waiver country, he should be allowed unlimited entries via any mode/crossing and not be restricted by existing rules. In fact they should offer a special open ended "homeowner visa" expressly for these people that can be acquired here or from your home country Thai embassy. Pete :cheers:
Exactly, why purchase a property and only have a 1 year visa. Most of us have fell for this and it only enriches the Thai female in the long term.
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Re: 50-year leases likely for foreigners

Post by HHTel » Sat Mar 25, 2017 12:06 am

Increases in the leasehold laws (30 years) was bandied about some years ago as 30 years is well under most countries in SE Asia. Nothing came of it. Let's see whether the latest idea gets anywhere.

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Re: 50-year leases likely for foreigners

Post by prcscct » Sat Mar 25, 2017 5:49 am

When you read reports like the below in conjunction with one another and realize the consequences, it makes good sense that someone needs to do some forward thinking and come up with innovative plans to continue to generate and grow revenue here from outside sources. We may see many more of these new ideas and incentives in the future. Pete :cheers:

http://www.bangkokpost.com/news/general ... -net-exams

http://www.bangkokpost.com/news/general ... r-next-era
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Re: 50-year leases likely for foreigners

Post by handdrummer » Sat Mar 25, 2017 7:58 am

is that a 50 year lease or a 50 year sentence?

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