Spurred by a series if investigations on land encroachment, arrest of some individuals for misconduct, bribery of land officials, etc, the booming real estate industry on Samui got a serious blow.
Recently, three foreigners and a Thai land official were arrested in a police raid against a syndicate allegedly issuing land titles illegally. Sources said that there are at least seven cases of land encroachment being investigated at the moment. ‘Now is the best time to buy land on the island' a legal consultant told us shortly before the all-out investigation on forest encroachment. The panic and confusion that followed the May 25 Interior Ministry circulation instructing land officials to investigate the status of Thai shareholders in a company with foreign partners acting as directors really snapped the real property market on the island – and the whole country – to a stalemate.
The price of land has drastically dropped. Local people engaged in small time buying and selling of plots for vacation houses are reported to be selling out. Indeed, real estate speculation, at least for the moment has gone.
Thailand has stern laws prohibiting foreigners from directly purchasing property themselves although suggested loopholes in the law allow them to own through setting up a nominee company that is majority Thai-owned.
Are the policymakers trying to start patching the loopholes now? A few years ago there were talks about contacting Thai shareholders in Phuket to find out if they were real partnes – or the screening of those Thai names that appeared in a lot of companies with foreign shareholding. We just hope things will start to change from now? Remember a village official was quoted as saying that more than half of the ownership papers on Samui were unlawfully issued. And this is worrisome – to say the least.
If they are going to close those loopholes (read enforce the law), then foreigner vacation homes are better of with long leases. It is a straightforward, legal, no questions asked way of using a piece of land to build a retirement home – especially if they come up with longer than 30 years.
Oh, maybe this new regulation will cause enough of a blip in foreign land ownership issue that they intend to come up with a new set of laws for foreigners seeking to own property. I am sure many would like to see in the future , say, a 90 year transferable lease. Such arrangement would definitely help the resale value, and of course, less risk involved.