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Legal Reform Proposal
What is a Proposal in Thailand?
Fact-checked by a REMAX Thailand Real Estate Expert
The Definition
In the Thailand property market, "Proposal" refers to the government's draft legislative initiative for a 99-year leasehold scheme on non-agricultural land, aimed at attracting long-term foreign investment by extending beyond the current 30-year lease limit. As of late 2025, it remains in the draft stage, allowing leases that can be mortgaged, transferred, or inherited, with land reverting to the state after 99 years. This proposal signals potential reform without altering freehold ownership restrictions for foreigners seeking Thailand properties.
Global Expectations vs. Thai Reality
Western buyers often expect firm, long-term property security like 99-year leases common in the UK or US, viewing them as near-permanent ownership equivalents. In Thailand, the proposal addresses past uncertainties where 30-year leases with renewal options were ruled non-binding by the Supreme Court in early 2025, leaving foreigners exposed to non-renewal risks. Thai reality emphasizes regulated structures to protect national land ownership, making the proposal a cautious step rather than full ownership reform, with implementation still pending Cabinet approval.
The Problem It Presents
Buyers relying on informal long-term arrangements risk Supreme Court invalidation of renewal clauses beyond 30 years, leading to eviction threats after initial terms. Uncertainty around the proposal's enactment delays investments, as it's not yet law by early 2026, causing hesitation in markets like Phuket and Bangkok. Furthermore, foreigners face higher due diligence costs verifying land status and developer compliance amid less regulated markets compared to the West.
Foreigner vs. Thai Citizen Rules
The 99-year lease proposal would apply equally to foreigners and Thai citizens on eligible non-agricultural land, unlike condos where foreigners are limited to a 49% freehold quota. Foreigners gain enhanced security for lifestyle investments without land ownership, while Thais retain full freehold options; however, foreigners must still comply with stricter fund repatriation rules via AMLO.
The Thai Legal Context
The proposal falls under the Land Code, administered by the Department of Lands (DOL), which currently caps leases at 30 years under Section 540 of the Civil and Commercial Code. It requires amendments potentially involving the Finance Ministry and Cabinet, with formal registration at the DOL for enforceability; related oversight includes AMLO for foreign fund flows and the Revenue Department for taxes on transfers.
Benefits & Risks
Advantages
- Provides long-term security (up to 99 years) for foreigners, enabling mortgages, inheritance, and transfers not reliably possible under 30-year leases.
- Boosts investor confidence in high-demand areas like Phuket, supporting rental yields and renovations.
- Balances foreign investment attraction with Thai land ownership preservation.
Risks & Disadvantages
- Remains in draft (as of Oct 2025), with no guaranteed enactment, risking policy reversals.
- Land reverts to the state after 99 years, offering no perpetual ownership unlike freehold.
- Potential for complex registration and higher taxes on transfers, increasing transaction friction.
Showcase: How It Works
Let’s look at a real-world scenario to understand how a Proposal is applied during a property transaction.
The Scenario
- A foreign expat eyes a 5 Rai plot in Phuket for a villa development priced at THB 50 million.
- Under the proposed 99-year lease (if enacted), they negotiate a lease at THB 200,000/year initial rent and register it at the DOL.
- They secure a THB 30 million mortgage from a Thai bank using the lease as collateral; over 5 years, they transfer the lease to a family trust for inheritance.
The Result
The lessee gains 94 years remaining security (99 minus 5), with annual rent escalating 5% (total paid THB 1.1 million).
Outcome:THB 4M annual rental income at 8% yield on a secure, mortgageable 94-year remaining lease term.
99-Year Lease Proposal vs. Current 30-Year Lease
A quick breakdown of how this term compares to its closest alternative.
| Feature | 99-Year Proposal | Current 30-Year Lease |
|---|---|---|
| Duration | 99 years (guaranteed if enacted) | 30 years (renewals non-binding) |
| Flexibility | Mortgageable, transferable, and inheritable | Limited inheritance and no reliable extensions |
| Investor Appeal | High security for foreigners | Short-term uncertainty |
Frequently Asked Questions
Is the 99-year lease proposal law yet?
No, as of early 2026, it's in draft awaiting Cabinet approval, targeted for late 2025 implementation but subject to changes.
Can foreigners mortgage under this proposal?
Yes, the framework allows mortgaging the lease with Thai banks, enhancing financing options over current 30-year limits.
Does it apply to condos or just land?
Primarily non-agricultural land (residential/commercial), but condo leases may benefit indirectly; freehold quota stays at 49%.
What happens after 99 years?
Land reverts to the state/lessor automatically, with no automatic renewal unlike some global models.
How does it affect inheritance?
Leases can be inherited if registered properly at the DOL, providing multi-generational security for expats.
Related Terms
R
REMAX Thailand Editorial Team
Our team of local real estate experts provides trusted, fact-checked insights to help you navigate the Thai property market safely.
Why It Matters
This proposal could unlock THB billions in foreign investment by offering lease security rivaling Western norms, protecting expat retirement plans from renewal risks. Ignoring it leaves buyers vulnerable to court rulings and market volatility in tourist hotspots.
💡 REMAX Pro Tip
Always verify project eligibility for the 99-year scheme via DOL searches and pair with RE/MAX's six-step qualification—including legal land checks—to avoid pre-enactment pitfalls. Consider opting for condominiums with foreign quota if delays persist.
Common Misconceptions
Myth: The 99-year proposal grants foreigners freehold-like ownership.
Reality: It creates a long-term leasehold only, with land reverting to the state and no ownership transfer.
Myth: It's already law and immediately available for new purchases.
Reality: As of early 2026, it's still a draft under Cabinet review, not enacted.
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