Thursday, May 15, 2008

Liberalizing Thailand's Land Laws



Bangkok Post

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.


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.

I am all for a country protecting its sovereignty, but at least make a credible argument instead of spouting right-wing nationalist rubbish.

The notion that the evil foreigners will come in and buy up all the land is pure hysterics. Foreigners don't care about setting up millions of homes in the middle of Nakhon Nowhere just to have the pleasure of displacing Thais from their farms.

Most of the Thai interior is underdeveloped. It might actually be a good idea to have some foreign capital develop some areas of the country that need it, especially when you consider how all the tourist centers are over-developed and Bangkok is a hell hole.

Foreigners can't take the land back home. They can't take their leases on the plane.

And I seriously doubt that there are enough foreigners on this planet who will gobble up all the land and make Thais landless in their own country.

However, I think if the land laws are over-liberalized, it may create a bubble, because the Thai land developers will over-estimate the demand and create a huge inventory of housing stock that foreigners won't buy and will be out of the price range of Thais to pick up the slack.

I think there is a real concern that Japanese and Chinese companies will come and pick off the choicest pieces of land, which they have done elsewhere, so I think there should be reasonable restrictions on the amount one can purchase.

But the notion that a Swedish tourist who wants a second home to spend his cold winters will be the destruction of Thai civilization borders on the insane.

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.''

I think the UK allows foreigners free-hold real property rights.

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.

Here is the more rational argument: Make the law transparent so people don't have to set up dodgy shell companies to own land.

1 comment:

Red and White said...

"I am all for a country protecting its sovereignty, but at least make a credible argument instead of spouting right-wing nationalist rubbish."

Did you expect anything else?