30 year leases extended to 99 years

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AdrianK
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30 year leases extended to 99 years

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ANYONE ELSE HEARD ABOUT THIS?

Media reports citing an unnamed source have suggested that Thailand’s Finance Ministry has been told to focus on developing an amendment to existing property laws that would allow land to be leased for up to 99 years.

And according to Thailand property industry experts contacted by Dot Property Group, this will make the Kingdom more attractive for foreign investors.

An amendment to the 1999 Act on the lease of immoveable property for commercial and Industrial purposes is said to the key to a restructuring process for the debt-ridden State Railway of Thailand (SRT).

Under the reported plan the SRT will transfer some of its land to the Treasury Department who, in exchange, will help clear most debts and help rent its land to the private sector for up to 99 years.

Increasing the length of leasehold agreements would also make some projects more attracting to overseas property buyers and investors.

Media reports also suggested that the Interior Ministry was reported to be concerned about land price manipulation as a result of the amended law, and expressed concern it would give foreigners another incentive to live in Thailand.

That comment alone has sparked intense debate in online forums, with many expatriate netizens suggesting this gives indications that Thailand no longer wants to make living in the Kingdom an easy process. This comes at a time when several neighbouring countries are in the process of relaxing foreign property legislation in the wake of last month’s implementation of the ASEAN Economic Community (AEC).

Several local media reports yesterday that suggested foreigners can already lease land in their own name were not totally accurate.

According to the Department of Land website: “In general, an alien may hire land in Thailand as provided by the Civil and Commercial Code and the contract of hire cannot exceed thirty years thereof. Once the contract comes to an end, it can be renewed, but it must not exceed thirty years from the date of renewal.”

Foreigners are able to lease land in their own name when the purchase is Board of Investment (BOI) approved, or for industrial use only.

Desmond Hughes, Senior Partner at specialist property law firm Hughes Krupica, told Dot Property: “This will affect the nature and scope of investment in commercial and industrial projects in Thailand radically, and supports recent efforts to stimulate Thailand¹s economy.

“Foreign investors will see the pendulum of regulation swinging in their favour, and this will undoubtedly lead to more opportunities arising.”

Hughes added that if this could be applied to the residential property sector then it would give a boost to the economy, further benefitting Thailand.

He added: “Such a proposal would not lead to a takeover of land as the freehold will still be vested in Thais, but the security and length of tenure will be such that investors will be encouraged to invest more and make longer term projections.

“They will also take more risk expecting more reward, and all of that will stimulate the property market which has suffered due to the domestic purchasers having incurred too much household debt.”

Surachet Kongcheep, Associate Director of Research at Colliers International agreed the move is good for Thailand.

He told Dot Property: “This news is very interesting, and will be very attractive for all foreign investors while also increasing the country’s competitiveness.

“Additionally, some big land plots which are owned by organisations such as the State Railway of Thailand and the Crown Property Bureau, as well as other government departments, will likely find it easier to acquire investors to lease their land.”

Khun Suphin Mechuchep, Managing Director of JLL Thailand said that Thailand’s law generally allows owners to lease land for up to 30 years, and in certain sections of Bangkok’s commercial areas the law allows owners to offer land for lease for up to 50 years on a clause that the land is acquired for commercial use only.

She added: “However, mega property development projects on large leasehold land plots owned by state enterprises, such as STR, may require a longer term than 50 years as they need a longer period of time to recover initial investment outlays. For this reason, a 99-year lease term will help make real estate investment in STR’s large prime land plots in Bangkok more interesting.

“Longer lease terms will also make leasing of land more attractive to foreign investors. Participation of foreign investors would be beneficial to land owners, whether they be private individuals/companies or state organisations/quasi-state enterprises, as it would help create a more competitive environment when the land is put up for lease.”

Frank Khan, Executive Director, Head of Residential Department for Knight Frank Thailand said the amendment bill proposed to the cabinet to allow land leasing for up to 99 years – up from 50 years at present, if approved will have a tremendously good effect on the property sector.

He told Dot Property: “This would make Thailand more competitive compared with other regional countries such as Singapore and Malaysia, where leasing terms for foreigners last for 90 years, and Laos which offers 70 years.

Khan also pointed out that a 30-year lease period does affect foreign investors’ decision to renew their contracts due to cautions on possible changes in both price and leasing procedures.

“This will help ease foreign investment in the commercial and industrial markets, and if this extension is applied to the residential markets it will be good for Phuket, Pattaya and Hua Hin where foreigners are looking to invest in villas and resort homes,” he added.
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buksida
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Re: 3o year leases

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Source?
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Re: 3o year leases

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Source: email received by me from Dot Property Group
"Today's Property News | Thursday, January 14, 2016 | Issue 083/16"
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Re: 3o year leases

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http://www.bangkokpost.com/business/new ... n-pipeline
"Sharing its view, the Interior Ministry was concerned about land price manipulation and worried it would give foreigners another incentive to live in Thailand." :shock:

I really feel unwanted sometimes :D
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StevePIraq
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Re: 3o year leases

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Why would giving a 99 year lease make it more attractive to investors when one can only get a one year visa, If purchasing a property the foreigner should get permanent residency.
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Re: 3o year leases

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^^ it's Thai logic. We're after their land and don't want to give it back. Next there will be scans at the airport to check for land being smuggled out of the country :D
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Re: 3o year leases

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Bristolian wrote:^^ it's Thai logic. We're after their land and don't want to give it back. Next there will be scans at the airport to check for land being smuggled out of the country :D
One grain of sand in each pocket so will take longer than 99 years
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Re: 3o year leases

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Hi All

There was an article in the Bangkok Post but I was under the impression the 99 year lease would be for commercial property use only.

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StevePIraq
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Re: 3o year leases

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Going back to my statement "Why would giving a 99 year lease make it more attractive to investors when one can only get a one year visa, If purchasing a property the foreigner should get permanent residency."

Just what would happen if you purchased house and land by any means, Thai spouse, company, lease etc. and then Immigration declined to renew your retirement visa. I am sure you would only have a few weeks to leave Thailand then what about your investment? Has anyone known this happen?
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Re: 3o year leases

Post by Pleng »

That's just as much a potential issue with a 30 year lease as it is with a 99 year one, though
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Re: 3o year leases

Post by B6PTW »

Hi

The assumption was made that the current lease time did not allow enough time to recoup the lease outlay costs and make a profit, so therefore increasing the lease time may encourage companies to invest as they see an increased potential to recoup and profit over the greater time frame

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Re: 3o year leases

Post by Pleng »

I see, that makes sense. I was thinking more form a owning-personally kind of view.
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Re: 3o year leases

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If this only relates to commercial use I doubt it is of any interest to 99.99% of people.

I would still be interested to know of anyone who has had their visa application declined even if they have property here, maybe this is not the right thread for this.
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Re: 30 year leases extended to 99 years

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Finance Ministry adds detail on 99-year maximum lease
Deputy Finance Minister Wisudhi Srisuphan has clarified that the government's planned amendment to extend the maximum lease term for state land to 99 years will not include renting to the private sector as has been claimed.

The 99-year lease period will be offered only to state agencies, he said on Friday.

Mr Wisudhi said the amendment of the maximum lease term to 99 years from 50 was aimed at facilitating the debt-to-land swap deal by the State Railway of Thailand (SRT) and the Finance Ministry.

The SRT will lease its prime land plot in the Makkasan area of Bangkok in exchange for clearing its accumulated debt of 62 billion baht.

Mr Wisudhi brushed aside criticism that the government would allow the private sector to lease state land for up to 99 years and potentially open up agricultural land to foreign investors.

At present, two sets of regulations govern leased land in Thailand.

The Land Lease for Commercial and Industrial Purposes Act sets a maximum lease period for industrial and commercial use of 50 years with a 50-year renewal option.

The Civil and Commercial Code allows people to lease land for general purposes for up to 30 years.

Chakkrit Parapuntakul, director-general of the Treasury Department, said his department and the SRT would survey the Makkasan plot to clear any buildings in the area before the handover.

The SRT will conclude the survey and forward the results to the Treasury Department by the second week of February, he said.

The debt-to-land swap will seek approval from the State Enterprises Policy Commission or superboard chaired by Prime Minister Prayut Chan-o-cha and the cabinet before the lease contract signing.

The Finance Ministry will lease 497 rai of land in Makkasan for 99 years from the loss-ridden SRT in exchange for clearing 61.8 billion baht of the latter's debt.

The SRT is among seven financially troubled state enterprises required by the superboard to undertake business rehabilitation.

Some 150 rai is to be developed as a public park, with 30 rai for a museum and 317 rai for commercial purposes.

http://www.bangkokpost.com/business/new ... imum-lease
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