Thinking of buying a house?

[davethailand 91]

Aquired earlier today.

 

Edited May 29, 2006 by davethailand

[Rex7777 0]

So, lease the land for 30 years, then build the house. Or, just lease an existing house. I don't know about you guys, but I'll probably be dead in 30 years.

 

Or, better still, rent.

 

Rex

[wacmedia 277]

Hi,

 

Shows how dodgy things can become in LOS, but the law is the law. Wonder is a clampdown on the way ?

[Florida Guy 0]

There are a LOT of falangs out there who formed a Thai corporation to buy property. I wonder if this law will be retroactive?

[Rex7777 0]

Florida Guy,

 

I think this has always been the law. Just never enforced. Personally, I wouldn't trust my hard-earned money to the whim of some Thai officials.

 

Rex

[Florida Guy 0]

I was looking at real estate once and was filled in on the "loophole". Supposedly I could hire a Thai attorney and form a Thai corporation. Then I could buy property but it had to have at least 51% Thai ownership. What this attorney would do is form the corporation, set me up with 49% ownership then spread the balance of the ownership out amongst his office workers. Then he would have them sign a Power of Attorney releasing any control they had over the corporation although they showed 51% "ownership" on paper.

 

That may not be the exact scenario, but pretty close I think. From what I was told, this is very common but it sounded a little too shakey for my liking.

 

I assume this is the type thing this article is addressing. (?)

[Rex7777 0]

Yep. No matter how you slice it and dice it, if they find that the corporation was formed for the purpose of a foreigner holding land, then that's not kosher. A 30 year leasehold, on the other hand, is legal.

 

Rex

[Florida Guy 0]

Can you explain the leasehold option? Is that what applies in the case of buying a condo or is it any property?

[pattysteve 34]

Can you explain the leasehold option? Is that what applies in the case of buying a condo or is it any property?

Leasehold option only refers to land,it has nothing to do with condo ownership.

[redwood13 56]

The article Dave has referenced is a blank for me using Firefox. Readable with Avant.

 

-redwood

[Gary 4,119]

Many have always correctly said that the companies set up for a farang to buy a house are illegal. This is NOT a new law but one that has always existed. Some forget that Thai lawyers will set up any kind of company you want but they have no obligation to make sure it is legal. I have always said that I like to sleep nights not having to worry if some politician will get a hard on and decide to enforce the existing law.

 

I have suffered some abuse from guys who have these companies. They accuse me of being a fear monger and being jealous. Actually I am a simple whore-monger and only tried to warn people about the danger of breaking the law. It appears that the Thai government is still NOT enforcing the law but they are refusing to recognise new Thai companies designed to allow a farang to own a house. This is certainly going to be interesting for guys trying to sell their Thai company owned houses. It is only a matter of time before they start investigating the existing companies.

 

If you want a house you will need to lease the land. You can legally lease the property for 30 years. Many will also tell you that these leases are renewable. Whether they will be renewed is up to the land owner. The land office will NOT record a lease longer than 30 years so the renewal clause is worthless.

 

Buy a condo legally and sleep well at night.

[spacebass 0]

Leasehold option only refers to land,it has nothing to do with condo ownership.

Patty Steve,

 

If the farang allocation in a condo has been taken up, then one of the options of buying into that condo is the 30 year lease, ( along with the questionable company route).

 

So the 30 year lease can be utilised in condo 'purchase'.

 

Space

[pattysteve 34]

Patty Steve,

 

If the farang allocation in a condo has been taken up, then one of the options of buying into that condo is the 30 year lease, ( along with the questionable company route).

 

So the 30 year lease can be utilised in condo 'purchase'.

 

Space

Ahhhhhhh yes Seabass,very true.I was just trying to give as simple an answer as i could.

[Shit_Happens 31]

For some reason this did not download to clearly so I might be missing something but it appears that this is only applying to property bought as a residence and then changed to a business use, eg office or subsequently divided up for sale to non thais. I suppose it could also apply to a house bought in a Thai company purely for resale.

Am I correct in thinking property bought in a thai company name purely for a domestic residence is ok?

Geniune question this so if I am completely off the mark your responses would be appreciated.

[Rex7777 0]

I think the point is that if a farang owns land by way of a dummy corporation, then that's illegal.

 

Rex

[Shit_Happens 31]

From Bangkok Post

New property law stuns foreigners

Bangkok (dpa) - Thailand’s booming property sector has been thrown into confusion by a new regulation issued this month that requires all partly foreign-owned companies to prove the source of their funding before purchasing land, industry sources said Tuesday.

The new Interior Ministry regulation that went into effect on May 25 has already started to slow sales of housing estates in Thailand’s popular seaside resorts, such as Pattaya, Phuket, Hua Hin and Samui Island, which have been specifically targeting well-to-do foreigners as vacation getaways or retirement homes.

“The property boom ended on May 25,” said Ronachai Krisadaolarn, managing director of Bangkok International Associates, a Bangkok-based legal consultancy firm that caters to foreign clients.

Thailand has strict laws prohibiting foreigners from directly purchasing property themselves although loopholes in the law allow them to own land and their houses through long leases or a ‘Tnominee company,T’ providing the company is majority Thai-owned.

It is common practice for such “shell companies’ to include Thai nationals who have been paid to act as nominees to facilitate the deal and who have invested nothing in the purchase.

The new regulation, signed by Suraart Thoingniramol, deputy permanent secretary of the Interior Ministry, is designed to halt the use of such companies for property purchases in the future.

“If it appears that an alien holds shares or is a director or it is reasonable to believe that a Thai holds shares as a representative of an alien, the officers shall investigate the income of Thais holding shares, delving into the number of years [they have spent] in the current profession and monthly salary/’ reads a translation of the law. “The provision of necessary evidence is required.

The new regulation is actually an enforcement ofThailands existing laws, legal experts said.

111t’s not a radical change. It’s a radical implementation,’T Ronachai said. The regulation has already started to stall home sales to foreigners, sources said.

“There’s a lot of confusion/’ said Simon Landy, managing director of the Primo Co, a property-development firm. Some land offices don’t know what to do with it, and many have simply stopped transferring land.”

..PNTThS

 

This answers my own question.

Won't this cause a boom in Condo sales?

[spacebass 0]

Sentiments move markets and whichever way you cut this one it is very sentimental

[elef 0]

Another thread.

[aqua4 2]

I was looking at real estate once and was filled in on the "loophole". Supposedly I could hire a Thai attorney and form a Thai corporation. Then I could buy property but it had to have at least 51% Thai ownership. What this attorney would do is form the corporation, set me up with 49% ownership then spread the balance of the ownership out amongst his office workers. Then he would have them sign a Power of Attorney releasing any control they had over the corporation although they showed 51% "ownership" on paper.

 

That may not be the exact scenario, but pretty close I think. From what I was told, this is very common but it sounded a little too shakey for my liking.

 

I assume this is the type thing this article is addressing. (?)

 

I had this debate with a well known falang property broker in Bangkok 3 years ago. The exact thing that the Thai's are now implementing is what I asked him about. In some point in time it WILL bring up the issue of tax avoidance I told him. His words were, TIT they will never do it. Go figure!

 

This would in time hold out for normal businesses too not just the property market. Mr Somchai is the major shareholder in your noodle shop, yet Mr Somchai pays no income tax on his profits, income or dividends.

 

They are starting to tighten many things in Thailand. Tourist visas got tightened 2 months ago, the property market has been tightened now.

[short 215]

Do us southerners have to teach you guys everything. Just lease the land and put a mobile home on it. Geez...

[Sammy 30]

Do us southerners have to teach you guys everything. Just lease the land and put a mobile home on it. Geez...

But then through the wrath of some diety, Thailand would be susceptiple to tornados.

[papillon 695]

Anybody actually got a 30 year lease on some land and built on it?

 

Or bought a lease with only a few years left on it?

 

Does it work out cheaper than renting something comparative?

 

I would imagine that has some strict rules as to what you can actually do on the land and the condition it's given back to the Freeholder when the lease is finished.