Foriegners not being able to buy land.........

[gummigut]

lazyphil said:

Gummigut can you see the day a chinese/american as president?....curious

 

100 years maybe. But I doubt it.

 

Asian men have an emasculate stereotype. Even look at Jacky Chan. Tough guy, but he's goofy.

 

<<burp>>

[Guest]

It's VERY simple economics

Your ?VERY simple economics? is reminiscent of the PM?s trip this week to a small village in Roi Et to eliminate poverty in Thailand. I think most realize and agree that poverty in Thailand will not be eliminated because the PM visits one rural village and hands out wads of cash to a few selected villagers. This is a publicity stunt that doesn?t address the underlying problems. Similarly, claiming that allowing foreigner ownership of property in Thailand is bad for the economy because it will make housing unaffordable to the middle class is equally simplistic. There are more fundamental and complex issues at play. Let me explain why.

 

You are correct that increased demand on a finite asset should increase the price of that asset. This is your simple economic argument set out in a single sentence. But there are many problems with using this simple proposition to justify Thailand?s prohibitions on foreign ownership of property. I will focus on three.

 

First, you erroneously assume the property market is a single unified market.It is not. Foreigners want property in places such Phuket, Koh Samui and Phuket. Foreign demand therefore probably does increase prices in those places (more about that in a moment), but that is not where middle class Thais buy property.

 

The market for middle class Thais buying property is housing complexes in the suburbs of Bangkok. Housing complexes ring Bangkok advertising homes in the range of 2 to 5 million Baht. How many Farangs want to buy a 4.5 million Baht home in a small complex an hour outside of Bangkok? Precious few; and if you try to argue that increased demand for property in places such as Phuket must have ?some increase? on demand for property in these middle class housing complexes Bangkok, we get into the issue of materiality. At some level, demand for property anywhere in the world may have some theoretical increase on property prices elsewhere, but the burden must logically fall on those in favor of government intervention and restrictions to show that this increase matters. Otherwise, where do we draw the boundaries? Are restrictions on property prices in Thailand justified because price increases on condominiums in London and New York affect prices in Thailand, albeit the affect is infinitesimally and immeasurably small? Of course not.

 

So where is the evidence that Farang demand for property in places such as such Phuket, Koh Samui and Phuket have a material affect on pricing in the places where middle class Thais buy property? Since you are advocating a restriction on consensual behavior ? a willing seller and a willing buyer wanting to transfer property ? and if you believe, freedom to engage in consensual behaior is a good thing (unless it is outwieghed by a negative), than the burden must rest with you to supply the evidence to establish that negative. If you have credible research showing the link between Phuket home prices and the prices of small housing estates where the Thai middle class actually buy their properties, please provide it. If you cannot, your argument fails even before we get to the next points.

 

The second point will be a bit a counterintuitive for some, but a lower price is not necessarily a better price. Think about this way: the government could, by fiat or decree, artificially set property prices at half their current market prices or even at zero. A few governments have done this, and it always created serious problems. This is probably obvious to most by now. Owners are unfairly losing value. You bought the house for 100,000, and now the government, on a whim (like handing out wads of cash), decides to end poverty by requiring you sell your property to someone for 50,000.

 

In addition to the obvious unfairness, there is another problem when this happens. It causes distortions in the market because assets are being sold and bought at values artificially lower than their fair market values. These sorts of distortions ruin economies by sending the wrong sorts of signals in terms of investments.

 

This is why the experiments in the command economies of the 20th century (e.g., Soviet Union, Mao's China, etc.) failed and produced such misery. This is why there has been a dramatic move over the last several decades toward market oriented economies.

 

And this leads us back to a point made earlier in this thread: if Thai legal restrictions on foreign ownership really do affect the market and cause property prices to be artificially lower than they would otherwise be this is not a good thing. It will lead to a misallocation of resources. We know this already.

 

Someone suggested that I might be a ?neoliberal libertarian? (whatever that is). Hardly. My views, and the ideas set forth in this second point are in the dead center of economic thought. Among the economically literate, there are very few who would disagree with the reasoning here.

 

Third, and much less abstract, let?s take a look at what really happens in the Thai property market. I have gone into much greater detail about this issue above, but the reality is that there are, and never will be, effective restrictions on foreign control of property in Thailand in places that foreigners find desirable, such as Koh Samui, Phuket and Pattaya. In the real world, Thailand has a system that doesn?t prevent foreign ?ownership of property, but instead not only adds to the transaction costs of owning property, but also fuels corruption and fraud in the property market. No one benefits from this system ? except the crooks.

[Old Hippie]

I will only say, that plenty of Farangs already live up country, in Chaing Mai, Udorn, Kon Kean and other places. No doubt, they buying land in the thier wife's names, and building homes has had an effect on the land costs in that area, especially when another Thai farang couple comes to buy land.

 

As I stated earlier, a girl I know told me her father has to pay more for everything in their village because everyone knows he has 2 daughters married to Farangs supplying him with money, and she is a big earner in BKK, and has a husband in Europe...she said when he wanted to buy land, his wife had to bring relatives in from another province to do the deal, and then sell to the father, so as to get a better price. Same with cows etc...

 

Another girl I know bought land for a house in Nakhon Nayok. During the transaction, the realtor kept asking her if she had a farang husband or Boy friend, and was inquireing how she would get the money. Satisfied that she was buying on her own, with a decent job, savings and a bak loan, the guy lowered the price sufficiently...the minute these whore realtors sense farang money, the price goes up!

 

As far as who wants land where, plenty of guys I know would prefer to be in a rural area, including me. All it takes is a few in a village to start the prices going up...

 

wait, I said I was staying out of this thread...God damn it! :banghead:

[Guest]

Non-thai citizens can own land :

 

1) invest 40 million baht in a BOI approved manner and you can buy 1 rai

 

2) own a company which allows majority shareholding and use that to own the land.(US Amity company, NZL/THAI free trade company etc..)

 

Further more you can have "land control" :

 

1) trusted thai family member owns in their name

2) you have back to back 30 year leases

 

 

Each to their own, but in my personal situation, I have no gripes with the current laws.

[Old Hippie]

I was told, after marrage for 5 years (?) a farang can own 1 rai in his name, and keep it if the marrage fails...but, no one really seems to know the particulars of this, IF true...

[Guest]

who told you that ? someone in a bar with a still wet visa on arrival stamp or a reputed thai conveyancy lawyer ?

[Old Hippie]

Been the rumor around ex pat circles, and also the subject comes up here now and then...many "...have heard of it, but don't know first hand..." Also, my old boss was married to a Thai woamn 30+ years, he said he had land in his name, under "an old law" but said there was some exception for married people...no ideas...my question is, if a couple is married, owns the land in her name, and she dies, who actually owns the land if he isn't allowed to hold the title...?

[dean]

I'm in C.M. now and my business partner, who live here and is Thai, has offered to sell me 1.5 rai and help build a house. I need to check on the legal proceedures on setting up a corporation and protecting my rights before any decision is made. It makes sense, if I do plan on importing Thai furniture to U.S. The house is big enough to live on the second floor and use the first to store items before shipping. To anyone that knows, is 1,500,000B too much for 1.5 rai in bosang? If I decide to go on, I'll post on progress.

[Guest]

1) invest 40 million baht in a BOI approved manner and you can buy 1 rai

 

2) own a company which allows majority shareholding and use that to own the land.(US Amity company, NZL/THAI free trade company etc..)

 

Further more you can have "land control" :

 

1) trusted thai family member owns in their name

2) you have back to back 30 year leases

This is an excellent example of how much misinformation there is on the subject. I will turn to OH's post next as another example of misinformation. Let's go through a few of the examples that are blantantly wrong:

 

1. Invest 40 million in a BOI approved manner.... That is about one million dollars. And BOI is for businesses; yes, you can own land if you want to build a BOI approved factory, but I don't think that is what anyone else here has in mind.

 

2. US Amity company, NZL/THAI free trade company. Simply wrong. The US Amity Treaty does not allow Americans to own land. It only provides an exception to the Alien Business Law, which restricts foreign ownership of certain types of businesses. It has nothing to do with land. New Zelanders also can't own land; this is complete nonsense.

 

3. "trusted thai family member owns in their name" This is a joke, right?

 

The only thing right here is the part about 30 year leases, which raises an interesting question. If you think they are the economic equivalent of owning land, what is the purpose of prohibiting foriegn ownership in the first place. The policy arguments behind this prohibition make no sense.

 

All of this, particularly the part about having a "trusted Thai family member own the land", gets back to a point I made earlier about how these restrictions can't and don't accomplish their stated objectives (market forces are too powerful to allow that to happen), but instead make it more difficult for foreingers to run business and live here, and create tremendous incentives for fraud and corruption.

[Ckrisg]

Although its difficult to always get the right answer in LOS, I recently married my Thai G/F and prior to this I did some research.

 

Seems only right it gives me is that I can apply for a 12 month visa.

 

Was informed that it confers no other rights what so ever.

 

No land, no residency, and no short cut for work permit etc.

 

I might be wrong but this came from reputable sources.