The First Precedent of D:CODE Sri Nakarin and the New Wave of Regulation
In spring 2026, Sopon Pornchokchai, President of the Agency for Real Estate Affairs Thailand (AREA), publicly called on authorities to review the conditions for foreigners purchasing condominiums. The statement came amid discussion of a possible increase in the foreign quota from 49% to 75%, which is being actively lobbied by the construction sector. The expert warned: expanding rights without tightening control will create risks of speculation, capital concentration, and unfair competition with local buyers. According to AREA data for 2025, approximately two-thirds of apartments purchased by foreigners in Bangkok and suburbs cost less than 5 million baht - a segment where Thai citizens directly compete with foreign investors.
A precedent has already been set. In the D:CODE Sri Nakarin project in eastern Bangkok, the 49% foreign quota was exhausted during the pre-sale stage, which blocked property registration for some buyers. The developer offered an alternative: transfer to a Thai company or conversion to leasehold mode. The case showed that formal compliance with the limit does not guarantee actual availability of a unit for a foreigner if the quota is reserved before the moment of registration at the Land Office.
What They Propose to Change: Five Key Requirements
Sopon Pornchokchai formulated specific measures that should accompany any expansion of the foreign quota. The first requirement concerns the period of residence in the country. In China, a foreigner must live in the country for one to two years before purchasing housing. Thailand has no such barrier: a tourist can buy an apartment a few days after arrival if money is transferred from abroad in foreign currency and the bank issues an FET (Foreign Exchange Transaction Form).
The second is the minimum property value. Malaysia has set a threshold of about 16 million baht, Indonesia - 10 million baht. Thailand does not limit the price, which allows foreigners to compete with locals in the affordable segment. AREA research showed: the average price of an apartment purchased by a foreigner in the capital region in 2025 was 4.2 million baht.
The third requirement is a limit on the number of properties owned by one person. Currently, a foreigner can own several units in different projects, as long as each fits within the 49% quota of a specific building. China allows only one residential property per person. The expert warns: the absence of restrictions encourages speculative purchases and resale rather than long-term residence.
The fourth is the purpose of purchase. In Thailand, a foreigner can purchase an apartment for residence, investment, or short-term rental. Control over the use of the property is minimal. Many owners rent housing on a daily basis through platforms, bypassing restrictions on the hotel business and creating unfair competition for licensed hotels.
The fifth requirement is tax reform. The tax burden on foreign property owners in Thailand remains one of the lowest in the region. Property tax, rental income, and capital gains on resale are significantly lower than in China and European countries. Sopon believes that the tax system should be the main regulatory instrument if the government decides to increase the quota.
How the 49% Quota Works and Why It Doesn't Protect the Buyer
The foreign quota is regulated by the Condominium Act B.E. 2522 (1979) with 2008 amendments. The law stipulates: foreigners can own units in a registered condominium if the total area of foreign units does not exceed 49% of the total area of all units in the building. The quota is calculated by area, not by number of apartments. Two projects with the same number of sold units may have different foreign quota balances.
Quota verification occurs at the time of property registration at the Land Office. If at that moment the limit is exhausted, the buyer will not be able to register freehold in their name, even if the deposit is paid and the contract is signed. Lawyers recommend requesting official confirmation from the Condominium Juristic Person before making a deposit. The document should indicate whether a specific unit can be registered to a foreigner within the quota.
Practice shows: in popular projects, the quota is reserved at the pre-sale stage. The developer may allocate most of the foreign units for early bookings, leaving minimal reserve for late buyers. A verbal promise from a seller or agent does not eliminate the risk. Written confirmation from the project's legal entity is the only way to verify actual quota availability.
Money Transfer Requirements: FET, Credit Advice, and Payment Purpose
To register foreign freehold, the buyer must confirm that the money for the purchase came to Thailand from abroad in foreign currency. The bank issues an FET form (historically known as Tor Thor 3) for large transfers from 50,000 US dollars or equivalent. If the amount is lower, the bank may use Credit Advice or a bank letter about receipt of funds. The Land Office accepts both formats, but requirements vary by province.
The payment purpose must link the transfer to a specific property and specific buyer. Working wording: "For the purchase of Condominium Unit No. [unit number] in [project name] Condominium on behalf of [buyer's name as in passport]". Errors in unit number, buyer's name, or project name may lead to registration delays. In some cases, the bank or Land Office will request corrected documents, an additional bank letter, or a new transfer.
"Cash in hand" schemes, internal transfer in baht between Thai accounts, or cryptocurrency transactions do not provide documents for freehold registration. The buyer will receive leasehold or be forced to register the property to a Thai company. The company must be created with a real business and Thai shareholders with a stake of 51% or more. The structure of nominee shareholders (dummy shareholders without real capital participation) violates the Foreign Business Act B.E. 2542 (1999) and may be declared invalid.
Risks of Foreign Capital Concentration in Specific Areas
Sopon Pornchokchai warns of long-term risks of foreign capital concentration in specific residential complexes and districts. In some projects in Bangkok, Pattaya, and Hua Hin, foreign owners already play a significant role in building management through the Condominium Juristic Person. In the long term, this may lead to the formation of residential quarters where the majority of owners will be representatives of one country.
Such concentration creates social and economic risks. First, building management decisions (budget, repairs, usage rules) may be made without considering the interests of Thai residents. Second, a high proportion of foreigners reduces the property's liquidity for local buyers. Third, concentration of short-term rentals in one building creates problems with security, noise, and common property wear.
Example: in the Wongamat area (Pattaya), several projects on the first beachfront have a foreign quota above 40%. Owners actively rent apartments through Airbnb and Booking.com, turning the residential complex into a de facto unlicensed hotel. Thai authorities periodically conduct inspections, but the control mechanism remains weak.
Taxes and Fees on Purchase: Calculation from Appraised Value
When registering property rights, the buyer pays several mandatory fees. Transfer Fee is 2% and is calculated from Appraised Value - the assessed value of the property used at the Land Office. Appraised Value is often lower than market price, especially in new projects. If the actual transaction price is higher than Appraised Value, fees are still calculated from the assessed value.
Withholding Tax for an individual is calculated on a progressive scale based on Appraised Value and the seller's ownership period. If the seller owned the property for less than five years, the rate can reach 5%. If more than five years, the rate decreases. The buyer and seller usually split this tax in half, but the proportion is negotiable.
Specific Business Tax (SBT) or Stamp Duty of 0.5% is calculated from the greater amount: the actual transaction price or Appraised Value. If the seller owned the property for more than five years, SBT does not apply, and stamp duty is charged instead. If less than five years, SBT is paid.
The total tax burden on purchase is 3.5-6% of the property value. For comparison: in China, the tax on housing purchase by a foreigner can reach 10%, and in several European countries - 15%. The low tax burden in Thailand makes the market attractive for speculative investments, which is what causes expert concern.
Alternatives to Freehold: Leasehold and Usufruct
If the foreign quota is exhausted or the buyer cannot confirm the transfer of funds from abroad, two legal alternatives are available. The first is leasehold (rental). The maximum term of one contract is 30 years with the right to extend for two more periods of 30 years. The contract is registered at the Land Office on the Chanote title (Nor Sor 4) and is protected by law.
Leasehold gives the right to use the property, but not ownership. The owner cannot sell the apartment, only transfer the remaining lease term. When renewing the contract, the landlord may revise the terms or refuse renewal. Banks are reluctant to issue mortgages for leasehold, which reduces the property's liquidity.
The second alternative is usufruct. This is a lifetime right to use the property, which is registered on Chanote. Usufruct is not limited by term, but terminates with the owner's death and is not transferred by inheritance. The owner can rent out the property and receive income, but cannot sell or mortgage the apartment.
Both schemes are legal but require careful contract verification. Lawyers recommend including in the leasehold contract a condition on the right to renewal, compensation for improvements, and a dispute resolution mechanism. In usufruct, it is important to specify the rights to rental income and obligations for property maintenance.
What This Means for Buyers in Wongamat and Na Jomtien
For Russian buyers in Pattaya, tightening of condominium ownership rules creates three practical risks. The first is the exhaustion of the foreign quota in popular projects. In the Wongamat and Na Jomtien areas, demand from foreigners is traditionally high. Projects on the first beachfront often reserve most of the quota for early sales. A buyer who makes a deposit during the construction stage may discover that the quota is exhausted by the time of registration at the Land Office.
The second risk is money transfer requirements. If a buyer transfers funds through cryptocurrency exchanges, P2P platforms, or intra-Thai accounts, they will not receive FET or Credit Advice. Banks in Pattaya accept only direct international transfers in foreign currency. The buyer must agree in advance with the bank on the format of confirmation and check whether the Land Office in Chonburi province will accept it.
The third risk is the possible introduction of a minimum property value for foreigners. If Thailand follows Malaysia's example and sets a threshold of 10-15 million baht, the segment of studios and one-bedroom apartments costing 2-5 million baht will become unavailable for direct freehold. The buyer will have to choose between leasehold, usufruct, or purchasing a more expensive property.
Practical advice: before making a deposit, request written confirmation from the developer of the availability of the foreign quota for a specific unit. Check the wording of the payment purpose with a lawyer and bank. Consider purchasing in projects where the foreign quota is less than 30% at the time of pre-sales - this reduces the risk of quota exhaustion. If the quota is close to 49%, discuss with the developer the possibility of reserving a unit in the Thai quota with subsequent transfer to the foreign quota when space becomes available.
For investors planning to rent out an apartment, it is important to consider possible tightening of control over short-term rentals. Pattaya authorities already conduct inspections of properties rented daily without a license. Fines reach 20,000 baht for the first violation and 40,000 baht for repeat violations. Long-term rental (from 30 days) remains legal and does not require a license, but profitability is 30-40% lower compared to short-term.
Construction Sector Position and Reform Prospects
Representatives of Thailand's construction sector support the idea of expanding the foreign quota from 49% to 75%. The argument: this will help sell accumulated stocks of unsold apartments and improve real estate market liquidity, which continues to recover after a slowdown period. According to the Government Housing Bank, at the end of 2025, the volume of unsold condominiums in Bangkok and suburbs was 87,000 units with a total value of 142 billion baht.
However, experts warn: increasing the quota without tightening regulation will intensify speculation and create market imbalance. Sopon Pornchokchai insists that any rule changes must be accompanied by stricter control, transparent verification mechanisms, and a thoughtful balance between attracting foreign investment and protecting the interests of the national housing market.
The government has not yet made a final decision. Discussion continues in committees of the Ministry of Interior and Ministry of Finance. A likely scenario: partial quota increase to 60% with simultaneous introduction of minimum property value, limit on the number of units owned by one person, and increased taxes on rental income.
For buyers in Pattaya, this means a window of opportunity: while new rules have not come into force, current purchase conditions can be locked in. Projects launched in 2026 will be sold under current rules until property registration. If reform occurs in 2027, buyers who made deposits in 2026 will retain the right to register under old conditions.
