To attract foreign investment after the Asian crisis of 1997, certain condominium buildings were permitted to increase the amount of foreign ownership to 100%.
The rules were that 100% alien ownership was allowed in municipal jurisdictions for projects that were built on no more than five rai of land and had 40 or more units.
However, this was a five-year dispensation only. The five-year period lapsed in April this year, so the rules have reverted to the old situation, being a limit on foreign freehold ownership of 49% of the “strata value interest” for all new condo developments.
The strata value interest often gets interpreted by the lay person as meaning 49% of the units within a block. This is broadly correct in buildings where units are of equal size and were valued at the same price per square meter when they were registered with condominium status.
However, in a block where the units are of different sizes and there were differences in the original price per square meter (usually, the higher the floor, the higher the price per square meter), the foreign-owned share of the strata value interest could work out at more – or less – than 49% of the total number of units.
Units with existing foreign freehold may be transferred with this right to other foreigners, but if a non-Thai now buys a unit in such a condominium from a Thai or a Thai company, and 49% of the strata interest is already taken, he or she will not have the right to freehold ownership.
Bob Andrews, Managing Director of Phuket LandSearch Co Ltd.