owning property/land sum up

[pattaya127]

From the Pattaya mail:

Your land rights

Last week’s comment on owning land has led to requests for a bit more info, so here we go. In Thailand, foreign nationals can own a unit(s) in a registered condominium or even a building as distinct from the land it is built on. It is also possible to hold a registered leasehold of up to thirty years for all types of titled land or buildings. Appropriate extension clauses can make this period even longer. Typically, farangs ‘buying’ a house for thirty years establish a Thai company with themselves as minority shareholders. There are taxes to pay at the point of buying and of selling as well as (in theory) levies on any rental income.

Amity treaty

But foreigners may not own in their own right freehold land, nor may they own more than 49% of the shares in a Thai company. The only partial exception are US nationals because, since the 1970s, they have benefited from the so called ‘amity treaty’ which allows for a Thai company under certain conditions to have special rights of company ownership which can extend to one hundred percent American ownership. However, the legal process is complicated and such companies as have been established do not own freehold land anyway.

40 million or bust

In 1999 there was indeed a change in the law to allow a foreigner in his own right to purchase one rai of land on which to build a house provided that he or she had invested 40 million baht and kept it in Thailand for three years. However, no such houses have yet been built as the detail has not been finalized by the Ministry of Finance. One unclear aspect is whether you could build a house out of the 40 million baht or whether the investment is separate. Also no one seems to know if the investment can be cash or bonds or equities or a combination, or even a large capital injection into an existing business venture.

The property future

For most farangs then, the situation remains basically as it has been for the past ten years. If you prefer not to be a renter, either buy a condo unit or establish a Thai company with the property or house leased back to you. Alternatively, you can put the ownership in the name of a Thai you can trust, or think you can anyway. In all cases, purchase only through a well established real estate agent with a proven track record you have checked out. And the golden rule is to put your money only into a dwelling which is the love of your life. It’s nice to think property prices in Pattaya will rise in real terms, but nobody knows for sure. Remember that houses in England fell in value for a hundred years after the battle of Waterloo (1815). Pattaya’s present success on the property front owes much to the government’s generous immigration policy which has spurred the numbers of retirees and farang investors on long stay visas. Who knows if the policy will be the same in five or ten years?

[ September 16, 2001: Message edited by: pattaya127 ]

[ September 17, 2001: Message edited by: pattaya127 ]