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  1. #1
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    Dougal's Avatar
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    Proposed changes to land leases for foreigners

    From today's Bangkok Post.

    Government considers longer leasehold terms

    PARISTA YUTHAMANOP & KANANA KATHARANGSIPORN
    The government is considering allowing greater foreign ownership in property firms and extending leasehold periods beyond 30 years to stimulate the business, according to Finance Minister Surapong Suebwonglee.
    The amendment would stimulate market segments that have been hit by sluggish demand, he said yesterday.
    ''This has been discussed quite seriously over the past two to three months. We need to think about the percentage of shareholding and leasing access compared with the number of years. The crisis that we have had in the past two years led us to think and look at a new paradigm,'' he said at an investor forum held by Euromoney.
    Dr Surapong said the government would consider new rules on leasing more on par with the region. The government has also abandoned a controversial proposed change to the Foreign Business Act, which tightened the definition of foreign ownership to promote foreign direct investment, he added.
    Longlom Bunnag, the chairman of the real estate agency Jones Lang LaSalle (Thailand), said property related to tourism and recreation was expected to benefit the most from any changes because of high demand.
    ''Existing laws allow foreigners to secure 50-year leaseholds in Bangkok's red zone, which is the commercial area such as on Sathon Road. ... I think Phuket, Samui and Pattaya may be in the government's sights for changes in regulations to benefit villas, resorts and long-stay travellers,'' he said.
    Mr Longlom said the idea could improve Thailand's competitiveness, since many countries now offered longer leaseholds _ for instance, 50 years in China and Hong Kong and 99 years in Singapore. ''Thailand has the shortest eligible period for lease contracts.''
    Issara Boonyoung, vice-president of Housing Business Association, disagreed with the idea of allowing foreigners to freely conduct transactions related to exchange of properties because it could restrict housing access for Thais.
    ''Thai people have lower purchasing power than foreigners. If the government allows foreigners to sell or buy freely, there will be no land left for Thais,'' he said.
    Foreign ownership should have conditions and limitations, he said. For example, the government should continue protecting land for agricultural purposes due to its low prices, otherwise the country may lose most of its land to foreigners.
    Regarding the increase in the foreign quota in condominiums from 49%, the government should limit the size of land plots to prevent developers from using legal loopholes to register townhouses as condo units, Mr Issara said.
    However, Assoc Prof Manop Bhongsadadt of Chulalongkorn University said the issue was ''very sensitive'' and unlikely to survive the three readings required in Parliament to change the law.
    It would be easier to extend leasehold periods from the current 30 years to 90 years as in the UK, he said. ''It will turn illegal transactions as in Phuket and Samui into legal transactions. The government is likely to collect more taxes.'' Mr Issara also agreed that extended leaseholds would create transparency and prevent the use of nominees. However, he said longer leaseholds and higher foreign quotas in condominiums should be allowed only in specific areas.
    ........................

    Having now publicly suggested that it might happen I would expect that prospective buyers will sit on their hands till the change is implemented.

    Supposing that the increased lease time does go through, I suspect that there are going to be a lot of disgruntled existing lease holders who find that the nice developer who promised them a rolling 30 year lease has now decided that they don't feel in the mood to be charitable anymore.
    Lord, deliver us from e-mail.

  2. #2
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    good2bhappy's Avatar
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    ta dee tee laow as they say

  3. #3
    I am in Jail
    DaveRobin's Avatar
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    and then they would change the rules again in 5 minutes.

    A piece of land near us is up for sale at 20 million baht or you can rent the land for 7 k Baht per month!!!!! So, if I could buy over 20 years, I would pay 1 million per year in just capital or rent for 84 K per year!

  4. #4
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    ^ Looks like a bargain. But I don't suppose you would be the first person to rent property, set up a nice little business and then find that the rent increases disproportionately.

  5. #5
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    Quote Originally Posted by Vizzle View Post
    The government change there mind more times than a chamelion changes its colour
    I guess your not the only one who knows this, and they must be hurting pretty bad in order to keep coming up with these various schemes to get foreigner to buy property here.

  6. #6
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    blackgang's Avatar
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    Samak, says,, Bend over and spread em.

  7. #7
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    Quote Originally Posted by DaveRobin
    A piece of land near us is up for sale at 20 million baht or you can rent the land for 7 k Baht per month!!!!! So, if I could buy over 20 years, I would pay 1 million per year in just capital or rent for 84 K per year!
    Are you sure that it isn't 70k baht per month?

    Otherwise the sell price is ridiculously high or the rent is ridiculously cheap.

  8. #8
    ding ding ding
    Spin's Avatar
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    ^ I know a similar tale, a friend rents a rai for 2500 baht per month or he can buy it for 8 million.

  9. #9
    The Cat
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    Quote Originally Posted by NickA View Post
    Otherwise the sell price is ridiculously high or the rent is ridiculously cheap.
    It is.
    Nobody ever said that Thais, in their vast majority, were good at managing their assets...

  10. #10
    ding ding ding
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    Quote Originally Posted by Bluecat
    managing their assets...
    I think they got a better handle on it that we think, for example the guy in the scenario i mentioned has the chanote with the bank and he has already if effect "sold" his land because of the big loan secured against it has bought him a nice car and house. He rents out cheap for a little beer money and is a winner on every front

  11. #11
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    good2bhappy's Avatar
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    ^ but surely he has to pay interest on the loan?

  12. #12
    ding ding ding
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    ^ yeah, but thats just a minor technicality

    Back onto topic....

    If they changed the lease term from 30 years to 50 years I would do something, until that happens I'm not spending.

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