A new leasehold bill has been approved by the Thai cabinet and could become law following further vetting and a public hearing that concludes this week.
The draft leasehold bill, which maintains maximum lease terms of 50 years for commercial purposes and 30 years for other purposes, will allow lease rights to be transferable and inheritable.
The intention with this move is to make leaseholds more attractive.
It would also allow lessees to sublet, inherit or renovate a property without consent from the lessors, according to an anonymous source who spoke to The Bangkok Post.
Lessees will also be able to use their lease rights as loan collateral without the lessors’ permission.
Under current law a lease is automatically terminated upon the death of the lessee.
Speaking exclusively to ThailandProperty.News, Bangkok-based lawyer Paul Bond of SBLAW ASIA, said: “This new leasehold bill would be a positive step forward for Thai business, which it is designed to enhance.”
“The provisions will certainly create opportunity for tenants to access money; not only does it enable leases to be mortgaged which, at the moment, is only available to leases granted out of Chanote or Nor Sor Sam Ghor land titles, but it will make leases saleable – thus turning them into an actual asset.”
Bond added: “It does not seek to liberate the market for foreigners. If that was the aim it would have to extend the term of residential leases to 50 years, which it does not.”
He concluded by predicting that Thailand’s residential property markets will largely be unaffected by the bill if and when it becomes law.
“It will not encourage foreigners to buy, unless the ubiquitous misrepresentation to foreigners that they can buy “renewable” leases, enduring for 90-years or more, continues unabated,” he said.