Land ownership? Is it possible ?

[LoveDaBlues]

Noting the difficulties and uncertainties in buying (leasing) property in Thailand, I tried running a few calculations through, in terms of buying or renting.

If you consider a scenario where you either buy at 2.25M THB (approx £36K sterling, or US$70K), compared with say renting at 10K THB per month.

After 10 years you would have paid out about 1.2M THB in rent, or after 20 years (assuming rent did not increase) 2.4M THB.

This ignores the value(?) of your property and whether you could indeed sell it later. I tend to work on worst case scenarios, - e.g if you had to walk away or be carried away!

Also bare in mind that if you didn't buy and instead invested your £36K sterling (2.25M THB, US$70K) and were able to achieve a return of 3.5% pa, that would generate about £100pm pm income or about 6500THB of your rent each month (without giving up the capital). Similarly, you could argue by buying you would be giving up not only the capital (and use of it) but also that future income on it.

The above ignores of course the fact that where one is in a stable long term relationship with a Thai wife, then they may well want to pass the property onto their wife upon their ultimate demise, along with any capital appreciation that has taken place, in that situation there is a stronger case for purchasing.

This is a good post and why I cringe when someone says, "renting is the only way to go; buying is stupid". Or, "buy, buy, buy, you're throwing away money each month renting".

This is a complex issue for expats and each case is different. Renting is best for some while buying is best for others. I'm renting now for nearly 3 years but may buy in the future.

[arjay]

Apologies if I am highjacking this thread! My partner is not Thai, but Lao. I have concluded that I don't think I would want to live in Laos on an on-going basis, though could spend periods of time there.

I realise she is looking for some long term security for her future, and I feel her honesty and integrity are beyond question. I want to help her with that, so have said I would help her buy something modest in Laos. Because I don't see myself living there, I have said (and she understands and agrees) that I want to limit my outlay to a modest amount, as I would have no direct benefit. It would be for her and her daughter's future. That said, she is struggling to find anything at the moment!

I have then been considering moving to Nong Khai to stay with her there (rather than in Phuket as at present), as it makes it easier for her visa runs and visiting family etc, and I like smaller quieter places. That was then when I ran into difficulties finding something suitable in Nong Khai and started thinking about buying there, because I saw a very suitable house on a very suitable development.

That's when it started to get difficult/complicated. Do I really want to commit that sort of money to buying in Thailand with all the uncertainties:-

Immigration policies and vagaries.
The continuing strength of the baht/weakness of the pound.
What if my relationship did fail in the future.
My partner, not being Thai could not inherit the property.
I would lose the access to and income from the capital outlay.
It would restrict/reduce my future mobility.
Low demand for rental properties (and rent obtainable) in NK.
etc etc.

So, I must admit I am now wavering in my earlier decision to buy, feeling that renting may well be the better choice as far as LOS is concerned, if I can only find something suitable.

[Aardvark]

Arjay, what exactly are the rules for foriegn ownership of land in Laos ?? is it the same as Thailand ?? A home in Vientiane might not be such a bad thing when you consider it's only an hour or more to Udon, with the added benifit of being able to bring a few things over the border for resale at a good profit. Just fishing cause I have no idea

[arjay]

I believe for normal domestic residential purposes it's the same as Thailand, in that foreigners cannot own land, but I wasn't wanting to be involved in the ownership. It would be in her name any way.

[laphanphon]

obviously rent, until you are sure of what/who/when, unless of course you are looking for a great quiet house out in rice paddyville, did i mention i was selling one shameful, i know. .........................where were we, oh yea, rent until you know what you are doing, then, if knowing you want to be in the area, say for about 5 years or more, then i would buy (like in nice quiet area around renound Wat Pa BanTad) or build. after 5 years it would be hard to take a loss, especially the way inflation has been going. continue to live and stay in udon area or sell, at worst get all your money back, lived in decent house and for free.

[arjay]

I've just been re-reading this thread, particularly the earlier part, and some points occur to me:-

Whichever way you present it, i.e. whichever way you think you purchase/lease, the ultimate ownership of the property still lays with the Thai owner/landlord/lessor. With a usufruct (or is it user fuct) when you die all rights pass to the owner who granted you those rights, so you have nothing to pass to your heirs. I don't know the situation if you want to sell the property along the way, but it would seem to me that if the owner was your Thai wife or ex Thai wife she would not be too cooperative.

Similarly with the granting of a 30 year lease, there are question marks/issues that will arise if either you die or the Thai owner granting the lease dies before the lease expires, and indeed when the first 30 years of the lease expires. I would strongly suspect you would be at the mercy of the Thai owner's hiers if he/she were to die before the lease had expired.

And if you died first, I wonder how cooperative the Thai owner/lessor (if not your TW) would be in transferring the lease to your heirs.

And surely you would need the cooperation of the Thai owner/lessor if you wanted to sell the property along the way.

Also what if, as in my case, your wife/partner is not Thai? Then do you just donate some money to a Thai to buy in their name (maybe the builder/developer) and then lease from them? Though I suppose that's pretty much the same as what those with TG's and TW's are doing anyway??!!

It certainly is far from an ideal situation!

[BobHelm]

And if you died first, I wonder how cooperative the Thai owner/lessor (if not your TW) would be in transferring the lease to your heirs.

RJ my understanding of this was that transfer was not possible on the death of the lessee. Once you die the lease has expired & there is nothing to transfer.

As you say only useful solutions if you do not worry what happens after your death!!!

[BKKSTAN]

An article from the Bangkok Post:

British 'land developer' arrested on Samui

THANIDA TANSUBHAPOL


Another member of the Bandidos motorcycle gang, suspected of involvement in the drug trade and money laundering, has been arrested in Koh Samui by the Department of Special Investigation.


Pol Col Pravuth Wongsinil, chief of the consumer and environment protection unit, said Lauren Daniel James Fray, 32, is a British national and owner of Sabai Thani Property Co.




''Mr Fray entered Thailand as a tourist and used loopholes in Thai laws to buy and sell public land and real estate with the assistance of Thai lawyers,'' he said.


A source said Mr Fray held 49% of the company and used the names of employees to hold another 51% stake. He did not put his own money into the company.




Mr Fray bought property in Laem Mai Kaen. The DSI found the property belonged to the Treasury Department.




Mr Fray divided the land into nine plots. Thais who conspired with him pretended to buy them.


Mr Fray sold the sections for 22 million baht each to Sabai Thani in order to allow foreigners to occupy the land and houses as juristic persons.




''This caused the state to lose more than 70 million baht in taxes,'' DSI spokesman Pol Col Narat Sawettanant said. Mr Fray is charged with illegal buying and selling of land.


In July 2006, the DSI arrested Kim Lingegaard Neilsen, a member of the Bandidos, on Koh Samui.

[isaanlawyers]

Topic is LAND OWNERSHIP, IS IT POSSIBLE?

Everyone is probably thinking NO but the answer is YES.
But it's VERY VERY rare and limited for foreigners.

First, if you invest 40,000,000 baht in Thailand, investors can get one rai for residential purposes.

http://www.isaanlawyers.com/images/Acqu ... 0Alien.pdf

Second, if you have a BOI approval you can also get some land for you foreign company.

http://www.boi.go.th/english/about/basic_incentive.asp

Third, some special permissions can be given by some

Fourth, there are other few exceptions but normally, the LAND CODE forbids foreigners to own LAND. However, foreigners can own structures, building on land but the building must be detached from the land by a law fiction.

One other exception is the delay of one year in the land code if you inherit some land...you have a delay to sell it. So, technically, during this time, you own it.

Now, there are other ways NOT TO OWN LAND but to be able to "manage", "possess", "use" or "rent" the land.

The most popular in Phuket, Pattaya and Hua Hin is probably setting up a Thai limited company where the foreigner is the director and owns and 49% of the preffered shares. The building is separated from the land, so, he fully owns the building. The problem with that most of these companies use nominees, people that are Thai but not really in the company. It's a company to own land and doesn't really operate. Which is illegal in that case (owning land for a foreigner, using nominees as the laws forbid nominees) Also, it could cost you a lot of money for accounting over the years. Companies are not so complicated but must do accounting every year, annual meetings, etc.

Another way is to LEASE the land. You pay your girlfriend/wife in advance for the land, and she lease it to you for 30 years. The renewal is not guaranteed... The lease can survive you. You pay taxes at the land department and must register all lease of more than 3 years.

Another way that I like is a USUFRUCT contract. That's a contract is civil law, which most people from commonwealth countries do not know. It allows you to stay on the land/house for the rest of your life, to enjoy it, even to sublease if you want, but you are not the owner and can't sell it unless the owner agrees with you. Same as a lease on that. But the usufruct is FOR LIFE and you can AVOID TO PAY ANY TAXES (in most cases). Usufruct are getting popular in Isaan because many foreigners are living with their wife, are quite old, just want peace of mind and agree to let the land/huose to their wife/girlfriend at their death. A usufruct also protects you if you wife predecease you. You will be able to stay on the land/house FOR THE REST OF YOUR LIFE, NO MATTER WHO WILL OWN THE PLACE.

A very safe (but more rough way) is to make a LOAN AGREEMENT on the land AND PUT A MORTGAGE on it. If the Thai owner can NOT reimburse you, you can seize the land by a Court order and sell it to get back your money. I was told by a friend that in Udon Thani, the land department has stopped this practice there. I can't confirm. They thought it was protecting too much the foreigners as they were not owners but could act like owners... What they should know is that a usufruct, you can't sell but ACT as the owner. But you can't get back your money unless you agree with the owner...

The right of habitation can be FOR LIFE. But if it is, some lawyers think that one party can stop it ANYTIME with a notice according to section 1403.

Some people are afraid that Married couples making leases or usufructs could use section 1469 of the Thai civil Code to void these contracts in case of divorce. I doubt it, never seen a case, but i understand that people disagree on that article. However, if the lease or usufruct is done BEFORE marriage, or in between NON-LEGAL SPOUSE, there is no problem and it is really safe.

Look at 1403 about right of habitation in no limit of time is mentionned...

http://www.isaanlawyers.com/images/Comm ... operty.pdf

So, many people believe it's better to make it for 30 years. In that case, the usufruct will cover a longuer time, and will also cover the land more than the right of habitation.

Other ways to control the land, not own it, but "enjoy"... would be superficies, servitudes, etc.

I would say that each situation is different and you should know the options available.

Sebastian.

[laphanphon]

First, if you invest 40,000,000 baht in Thailand, investors can get one rai for residential purposes

if I had 40 mill baht, i wouldn't be reading this, because i wouldn't be in thailand as and expat, and if smart enough to have 40 mill baht, is sure as hell wouldn't invest it in thailand.

1 rai for 40 mill, now that's a bargain.

usufruct is done BEFORE marriage, or in between NON-LEGAL SPOUSE, there is no problem and it is really safe.

that's me, damn i'm smart. OK, I took the doctorate course at WBU, but graduated. expensive little course

[isaanlawyers]

I'm not trying to say what is smart or not, to invest 40m baht or not in Thailand...but what is the Law of Thailand.

There are 2 comments that can easily be made are are very true. Too many people are complaining about Property in Thailand. But we live here...

a) If you don't trust your wife/girlfriend and don't want to put a property on their name, just buy a condo or rent a place.

b) When you buy a car, you take insurance? No? So, when you buy a house that has a bigger value than a car, just don't take any chance and do the same. Make some contracts to protect yourself if case of. Think before, not after. Go around, verify, ask information, compare prices, it's probably a major investment in your life...

[aznyron]

I'm not trying to say what is smart or not, to invest 40m baht or not in Thailand...but what is the Law of Thailand.

There are 2 comments that can easily be made are are very true. Too many people are complaining about Property in Thailand. But we live here...

a) If you don't trust your wife/girlfriend and don't want to put a property on their name, just buy a condo or rent a place.

b) When you buy a car, you take insurance? No? So, when you buy a house that has a bigger value than a car, just don't take any chance and do the same. Make some contracts to protect yourself if case of. Think before, not after. Go around, verify, ask information, compare prices, it's probably a major investment in your life...

Here is Attorney giving you free advice if you are insecure with your wife or g/f DON"T buy rent or buy a condo in YOUR NAME as they say in AA keep it simple stupid

[arjay]

What conclusions or recommendations would you make if as a foreigner you did not have a Thai wife or partner, but wanted to buy a house in LOS?

Assume that the developer is prepared to grant a 30 year lease, a usufuct, or a right of occupation, or indeed agree to anything else which was legal.

Which route do members see as the best of the less than perfect bunch?

[laphanphon]

my apologies to all for any misunderstanding, looking of my papers yesterday, i realized i have a 'userfuct', not 'gift of habitation', but all else is same, all of 75 baht to register by self at office, simply answer the questions asked by the man with the fill in the blanks computer screen. for life - free - use and or modifiy at will.

sorry for any confusion.