It is a good time to buy property
in Thailand. Banks are lending and houses are and land are now
realistically priced in 2006.A good time to buy.
LAND
AREAS: 1 rai = 4 ngarn = 400 wah2 = 1600 m2; 1 talang wah = wah2
= 4 m2; 1 acre = 2.53 rai & 1 ha = 6.25 rai
A 30-year lease can be a good idea to a freehold
purchase or usufract, or a Thai company (7
PARTNERS) can be established with Thai majority shareholders. Foreigners
only own 49% shares in a company with foreigner
ownership. We can assist you to make sure your
company is safeguarded. Remember if you need advice ask us.
NEW
LEASE LAWS IN THAILAND:
The
government is looking into changing the leasing laws to increase foreign
investment. This may mean leasing land held in Trust by the Land Dept
guaranteeing the foreigner right to tenancy. Leases would be 99 year.
The occupant would be able to sell the lease to another foreigner
before it expired but if sold to a Thai then they would get the title as
the Land Dept would give the title back to the original owners before
the transaction proceeded. Whether this is a good idea is yet to be
seen. Current requirements allow foreigners who bring in 40m baht to buy
1 Rai of land for residential purposes. They can lease 100 Rai for
approx 50 years. Longer lease requires permission from the Land Dept.
Foreign businesses can feel
relaxed now as the Act Governing the Lease of Immovable Property for
Commercial & Industrial Purposes has increased from 30-50 years
& allowed lease rights to be mortgaged as security. For investors
this means: a longer lease can accommodate long term business planning
& the right to mortgage the lease as security in order to receive
finance. Financial institutions can benefit because they can take a
lease right as security.
Regulations: 50 yrs now.
Only applies to immovable property for commercial & industrial
reasons. Only the owner can lease it. Lease must be in writing &
registered.
The Government Gazette Aug
2000: says the business must have one of the following.
1/. Commercial business with
at least 20m baht in investment
2/. Industrial businesses
qualify for promotion under the Investment Promotion Act.
3/.Other commercial or
industrial businesses beneficial to the economy. property leased must be
located in industrial are as set out in the City Planning Act or the
Industrial Estate Authority of Thailand. Land Dept must approve leases
over 100 rai. Foreign leases must comply as well with the Foreign
Business Act. Leases can be renewed after 50 years for another 50 years.
If the lessee dies the inheritor can take over. The lessee can sub lease
or transfer lease rights, either wholly or in part, to a third party.
MORTGAGE
OF LEASE RIGHT:
Since a lease right can be
mortgaged, if the debtor defaults on payments the lease may be seized
& sold at a public auction. Mortgagee may claim: 1/. The debtor has
failed to pay interest for 5 years; 2/. Mortgagor hasn't satisfied the
court that the value of the property is greater than the amount due
& 3/. There's no other registered mortgages or preferential rights
on the same property.
TO
LEASE A HOUSE & TO LEASE LAND
We firstly check the title
Deed & check any liens on the said property. Then we take the lease
to the Amphur together with the nor sor sam or Kanut and have it
registered. It is then stamped & the land cannot then be sold unless
the lease is cancelled. A lease without doing this is useless. The first
lease should be done properly by a reliable lawyer. (We charge 10,000
baht ). Our lawyer takes the title deed to the Amphur and gets it
legalized. The wife or owner should then sign another 30 year lease
dated from the end of the first one. Most wives would agree to these
procedures by explaining to them that if
they died, they would not want their husbands thrown out! At the end of
the thirty year lease, all you have to do is get a lawyer to take it to
the Amphur again. It is really simple. A virtual 60 year lease
should cover most peoples lifetime and the wife can leave the property
in her will to the children and if you die the lease could be terminated
and the property go to your children. You can also sell a lease.
DOING IT YOURSELF: You can
register a 30 years lease at the land department yourself and amend it
but most times you may be better to use a lawyer as the lease will be in
Thai. If you cannot read Thai then you do not know what you are signing.
Your name will appear in the title and no one can cancel your
lease.
LEASING
AS AGAINST USING A COMPANY:
It depends on ones
circumstances whether you should lease rather than form a Thai company
to secure ownership. In some cases when married to a Thai, leasing is
the better option or for pensioners or when in a relationship but if one
decides they may start a business later or during, then a Company may be
the way to go. Remember you can only own 49% land in Thailand
regardless. A US Amity Treaty company gives no more clout---its 49%
foreign ownership. But also remember if you start a company you must use
the company for business not just as a convenience to own the property.
Taxes will be levied and you will need audited yearly accounts. Condos
are the only allowance for 100% ownership. If you are using someone's
company then that is fine as normally you will have contracts to assist
both parties. Charges would be:
pay all taxes per year; maintenance payment; pay tax on profits if sold;
yearly audit contribution so expect to pay the company for this
service; in & out fees and payments.
LEASING
VIA A LOAN TO YOUR COMPANY:
This is an excellent way to
lease if you have a company. An owner takes a lease out on a particular
piece of land he wants to own with his own money? he loans his company
money to buy the land and the lease in effect is owned by the company
via the buyer. This then becomes an asset of the company and can be
depreciated from his or her share registration & paid back at the
buyer's pleasure. You must have audited books to access a loan from a
Bank.
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On
March 3rd 2000 the Thai Foreign Business Act of 1999 took
effect. (FBA). This replaced the old Act of 1972.
In a company you
need 7 partners but you can according to the investment control
100% via B.O.I. (Board of Investment). However a normal 2m baht
Thai Company foreigners can have 6 foreign shareholders & 1
Thai but the Thai holds 51% shares & now have access to the
company account. What one does not know until they decide to form one is
that certain businesses are closed to foreigners BUT THIS IS OF
NO CONCERN IF ONE JUST WANTS A COMPANY FOR THE PURPOSES OF
BUYING A HOUSE AND LAND but remember buying a house via a
company your Thai workers will be interviewed and you must carry
out business. We can help you form the company and
take care of all steps for you plus search the Title Deeds &
any other request like making sure their is no lien on the
property. We also check the Courts for you in case the seller
has a not so good record.
THAIS MARRIED TO
FOREIGNERS - the answer to your land buying
problems?
BOI allows foreign companies to own land, usually factories.
Don't forget the Treaty of Amity, which virtually gives
Americans the right to own 100% of a company doing business
in Thailand. The Japanese use nominees a lot. There are people
that buy in someone elses name and put a mortgage on the
property for the purchase price to protect their interest. There
are also concurrent land leases that can be set up, as there is
no restriction on foreigners owning buildings (40% of a condo
complex) and lastly theres those who trust their wife or friend
& use their name. Laws are worthless without enforcement,
& Thailand practices "selective" enforcement.
Foreigners can buy property in Thailand & please use a
lawyer as sometimes Title Deeds are false, or the building you
buy is not on the deed or the land has encroached on other land.
Most farangs use their Thai wife and give property rights to
them. But if not married to a Thai lady then you can have a 30
year rental. Rental total fee equals the purchasing price. At
expiry date, a second 30 year rental period is granted at
zero-cost to the rentee that being you. The rental-contract is
written in English and acknowledged by a lawyer. This deal is a
person-to-person basis. Problems may arise at expiry date
between heirs of both parties.
1/. Be careful. Check utilities
as sometimes theres no phone lines & never believe it until
you have written proof of phone lines are going in.
2/. Learn which areas flood and which don't. A developer will
not tell you. Don’t listen to pub talk. Rent before buying if
you have time or ask the neighbours.
3/. A land lease NOT filed with the land department (and 1%
fee paid) is only valid for 3 years regardless of the term of
the lease. All lease for a period over 3 years MUST be
registered at the Land Office and written in Thai. You have also
to pay fees calculated on the TOTAL amount of rent agreed upon
and for the full period (eg.: rent 1000 baht x 12 months x
30years = 360.000 baht)
Those who want to sign a lease-contract and don't want to
register it, should know that such a contract is automatically
void at the death of one of the signatory (this means that such
a contract is NOT transmissible without prior agreement of the
other party.)
While a contract registered at the land office is
transmissible & if one signatory dies, & the contract is
not cancelled, the heirs of the estate have to respect it. This
is Ok if the lease is transferable and every time a transfer is
made, the Land Office must be notified.
If no record of your lease with the developer, then any
private agreement between the 2 parties will not be legally
binding. If the developer wants to play you out, he can. The
Land Office uses only one language - Thai. Even your name in the
contract has to be in Thai. The "fee" is actually
government tax & you pay the Land Office equivalent to a
little under 5% purchase price. A developer may want a
"deposit" equivalent to 1 year's maintenance fees.
They say you recover this amount from the person who buys the
property from me. But ask your Thai neighbours if they pay it as
you will find they don’t- its rubbish. Confusing-------- thats
why you need our law office.
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WHAT WE ARRANGE:
Our company can setup
your company using our Thai lawyer or formulate leases, agreements etc
that suit your situation. If wanting to purchase or lease land do
not sign any forms until you talk to us, but please obtain a Title Deed
and have it searched. We initiate an investigation of your Title Deed
for you and we give you a full Court/lien & ownership report for
your situation, in English.
. If you want a company
or work permit we give you a step by step English translation guide
on all the steps we take for you, ensuring full confidence in our
services. There are no hidden costs. Remember you do not need a work
permit if you are not going to work or are only coming to Thailand to
retire in your house otherwise you need a 2 million baht company min.
Total costs for this is 35,000 baht including VAT for a standard 2m baht
company. However you will need an "O" non immigrant visa or
"B" non immigrant visa if working in Thailand which you can
obtain after your company is formed. After one year in business we can
then assist you to obtain a 1 year visa in Thailand.
We arrange a 30 year
lease & assist with renewal and prenuptial agreements to cover you
while you are alive. This is sometimes preferable then buying a house
and condo using a company. Again we arrange with our Thai lawyer all the
work for you.
WHY USE OUR SERVICES:
TEL 0899527387 or