Thai property market cools as foreign buyers pause amid loophole crackdown

Thailand's real estate sector is experiencing a slowdown in luxury villa sales as authorities intensify their crackdown on a loophole that allowed foreigners to circumvent land ownership restrictions. The Department of Business Development (DBD) has identified a significant number of companies, particularly in resort areas like Phuket, Koh Samui, and Koh Phangan, suspected of using Thai nationals as dummy shareholders to comply with the 49% foreign ownership limit.

These arrangements often lack the necessary tax history to support the claimed property ownership. The DBD has flagged over 11,426 companies in Koh Phangan and Koh Samui, representing nearly 68% of registered firms on the islands, for foreign stakes. Furthermore, more than 7,000 businesses across real estate, tourism, and hospitality sectors are under scrutiny for suspected illegal nominee structures.

To date, Thai authorities have prosecuted over 850 companies, resulting in financial damages estimated at more than 15 billion baht (US$458 million). Property tech group Juwai IQI estimates that in Phuket, three in five villa transactions involve foreign buyers, while in Koh Samui and Koh Phangan, this figure rises to nine in 10. The increased regulatory scrutiny is prompting prospective foreign buyers to delay their purchase decisions.