Thailand Looks to Revamp Real Estate Laws with Cambodia’s Leasehold Model in Focus

• 20 November 2024
• Property Focus
• 2523 Views

Thailand is revising its real estate laws to attract foreign investment, proposing significant amendments to extend lease terms from the current maximum of 30 years to up to 99 years. This initiative, championed by Finance Minister Pichai Chunhavajira, is aimed at revitalizing the country’s sluggish economic growth and addressing rising household debt. The proposed changes, announced on Aseannow.com on 16 November 2024, focus on enhancing “rights over leasehold assets”.

Currently, Thai laws restrict foreign ownership of land, presenting a major hurdle for international investors. In comparison, countries like England, Wales, France, and Cambodia have successfully implemented special lease laws that allow long-term leases and grant tenants greater rights. Notably, Cambodia’s 2001 Land Law​ and Cambodian Civil Code 2007 permits lease agreements of up to 99 years, providing long-term security and rights for foreign investors. This framework has positioned Cambodia as a model for leveraging leasehold arrangements to attract global real estate players.

Current Thai laws restrict foreign ownership of land, creating a significant political challenge. Thaksin Shinawatra, a prominent figure in the governing party, previously proposed that any land sold to foreigners should first be transferred to state management under the Treasury Department.

In April 2023, the cabinet instructed various ministries to explore longer lease terms, and by June, the Interior Ministry was tasked with advancing these proposals. This initiative aims to address the limitations of foreign investment in Thailand’s real estate market.

Thailand’s government, led by Paetongtarn Shinawatra, is exploring strategies to align with international standards by adopting elements of these successful leasehold models. The 2019 Rights Over Leasehold Assets Act in Thailand currently permits leases ranging from 3 to 30 years, but its limited scope has curtailed broader adoption. Expanding these terms to 99 years could stimulate significant economic activity, offering enhanced investment appeal and aligning with global practices.

Cambodia’s success, along with examples from other countries like England, Wales, and France, offers Thailand valuable insights as it seeks to modernize its real estate regulations. By better defining and expanding leasehold rights, Thailand aims to position itself as a more attractive destination for international property investment, boosting its economy and related industries.

• Policy and Strategy