Thailand: Landlords jittery over seizure risk
Landlords in the hotel sector have raised concerns about the government’s policy to confiscate vacant land which has not been utilised for 10 years as there are no proper schemes or environment-related laws from state authorities to help develop the land for public benefit.
Marisa Sukosol Nunbhakdi, president of the Thai Hotels Association (THA), said even though there have been no land seizures in such cases in over 40 years, the hotel sector disagreed if there is enforcement without a proper solution to help both owners and public communities mutually benefit from land development.
The deputy government spokeswoman on Sunday insisted that under Section 6 of the Land Code, the government can enforce the seizure of privately-owned vacant land left unexploited for 10 consecutive years.
Mrs Marisa said hotel owners who have vacant land mostly suspended new hotel investment during the past two years due to the downturn in the tourism market.
However, while some owners agree that their plots could be used for public purposes, there are no initiatives from the government to offer a rental scheme for landlords.
“Not every landlord has the financial ability to develop their vacant land. If the government really wants to maximise land utilisation, it should come up with a proper solution to entice landlords who also want to rent out their land for meaningful purposes,” said Mrs Marisa.
She said one of the solutions that landlords previously explored was to join the carbon credit market, which is a scheme to help offset greenhouse emissions.
However, Thailand still does not have laws directly related to climate change that could regulate the carbon credit market properly.
Meanwhile, the voluntary scheme for operators who would like to sell carbon credits under the programme initiated by the Thailand Greenhouse Gas Management Organizaton have to bear the high costs of inspection and auditing, which many landlords see as not worth the investment.
Surapong Techaruvichit, honorary adviser of the THA, said the idea from the Bangkok Metropolitan Administration to increase public recreational areas from undeveloped land is promising but might be difficult in practical terms.
“Land owners who agree to this scheme might have only small plots, while large land owners might be reluctant to offer their land for public use,” said Mr Surapong.
Suksit Suvunditkul, president of the southern chapter of the THA, said since the Land and Building Tax was introduced in 2019, hotel owners in the South who have undeveloped land have started to turn their plots into farms to avoid hefty taxes.
However, these projects are mostly a waste of money as they do not generate much returns from these farms.
“I believe most landlords would agree their plots could be temporarily used for public benefit as long as they don’t have a solid plan for commerical development. The rental price for land for public use could be lower than the commercial rate, but it could be hard to find owners who agree to give it totally for free,” said Mr Suksit.
Thienprasit Chaiyapatranun, vice-president of the THA, said it would take at least five years for local owners who are not large operators or foreign investors to restart hotel investment.
Without a scheme to persuade landlords to join the public development initiative, they have to turn to agriculture to avoid leaving their plot unexploited.