Clamp-down on foreign owned land

[Central Scrutinizer]

Flash,

 

It is a 'bit' different when married to a Thai woman. I built a house in the village, for my wife, not for me. We don't live in the village now and we rent in Surin. But, I have no claim or rights on the house I built in the village, nor if things went awry with my wife do I expect anything in return for this house. The problem lies with all the farangs that want to 'own' in 'their' name. It can't be done legally here, except for certain business reasons. All these people/farangs trying to get around the Thai laws are just setting themselves up for a financial loss any time the Thais want to do something about it. I say 'rent' as you really have no real option for buying other than buying a condo, which, as I say, has its own problems as well. And, as I said, if you take the money you would have spent here on a property, invest it in something else in farangland that makes some money (easy enough to do, and you are legally allowed to do so and covered by laws that protect you) you can easily have the income from your property or whatever cover your rent here, and if you have bought rental/income property you also gain on the appreciation value of the farang based property.

 

But, if you or anyone have a Thai wife then any property can be bought in her name. The problem is, many farang husbands do not seem to trust their Thai wives (or, more specifically her family I think). Why marry her if you can't trust her? (Not you specifically Flash.) Also, I do believe you need to sign something if your wife buys property here that states you have no legal claim on the land.

 

The main point in this argument is the fact that one can not 'legally' own land and property as a farang in Thailand without all sorts of dubious machinations to get around Thai laws. If these laws and restrictions were not there I would also buy land or property in Thailand. But until then, anyone buying real property in the LOS is setting themselves up for a fall at the whim of the Thais. Wives excluded, as we all know they'd get the house whether we lived in Thailand or the states. ::

 

My own credo here is: don't spend money that you cannot afford to lose when here in Thailand. Keep your assets in the states or west, where they are much better protected.

 

Rent it, until the laws change in our favor. Or, buy land and build a house for your wife, and live there until she kicks your ass out.

 

Cent

[Flashermac]

My Mrs has told me to buy a condo. But right now you almost can't give condos away. Plus many places charge you a monthly fee which is about equal to what I pay for rent! Hence, I still rent ...

[elef]

Mac,

 

buy a land in the name of your mrs, register a lease contract of 30 years for you and build a house which you can register as your property! Forget about companies and get a real good thai lawyer to fix the papers!

[Bangkoktraveler]

Good point Cent

 

[color:"red"]"Why marry her if you can't trust her?"[color:"black"]

 

You summed it up very wisely.

[Flashermac]

Elef,

 

My Mrs already owns two houses and other land of her own. I can always move into one of them -- if I feel like retiring and going up north.

 

I got lucky. When I married her, she was the typical Thai air head and spent money as if it had an expiry date on it. Then one day she just grew up! Cost me a helluva lot of money before she did though.

[Guest]

Now here is the strange part.

 

In an effort to promote investment in Thailand (according to the BOI, investment is down 50% through April of this year) , the Thai government has sponsored programs promoting the sale of property in resort locales such as Koh Samui and Phuket to foreigners. I was out of town for the long weekend, and saw such a promotion. They even mentioned the use of companies to acquire property.

 

I asked a Thai consular official about the new regulation in front of some prospective investors, and he looked very baffled. He also asked for my business card so that he could send me an email to clarify matters; I just couldn't seem to find any. Really weird, and for obvious reasons I am not going to give any more details (just is case suadum is right and the government actually does monitor this website.)

 

Further, in the departure area of the international airport there is - or at least was - a large booth promoting resort property sales to foreigners. Anyone know if it is still there? If so, do they still push the use of companies to buy land?

 

I haven't been to Pattaya, Phuket or Koh Samui since this new regulation was issued, but I wonder if property companies are still pushing property sales like they were. There was a place in Pattaya that had a big billboard size signing saying something along the lines of "Yes, Foreigners can own property in Thailand!" Anyone know if it is still business as usual for these folks?

 

About a week after the new regulations hit the press, I got a mass circulation email from CBRE promoting sales of luxury properties in Phuket. Not a hint anywhere in that promo of any restriction on foreign ownership of land.

 

Although I know it is the law here, I can understand why foreigners are honestly confused. Reputable property brokers and the government itself (or at least parts of it) are pushing foreign investment in the form of property acquisitions. It's almost as surreal as the ban on foreign property ownership itself.

[BuffHello]

Samui cases spark land law crackdown

 

Collins: Officials may lack resources for full checks

Money laundering alleged in some cases

 

NINA SUEBSUKCHAROEN

 

Recent government action to more strictly enforce laws related to property acquisition by foreigners stems from some blatant abuses reported on Koh Samui, according to Marcus Collins, a partner with the Bangkok law firm McEvily & Collins.

 

Officials have already begun probes into certain practices on the southern resort island, including a criminal investigation of money laundering, he said.

 

Buying property is one of the easiest ways to launder money, says Mr Collins. While checks exist requiring foreigners to declare the amount of money they bring in and its source, he is not sure about the extent of co-ordination among the Bank of Thailand the Justice Ministry and the police in investigating large transactions.

 

"Obviously they have the ability to do that and probably through Interpol they have the ability to check people who could bring a lot of money into Thailand, whether it's money obtained from criminals or criminal enterprises."

 

As for money that has been made in Thailand, Mr Collins said it is much harder to investigate because there is really no reporting requirement. "So if somebody has earned a lot of money or somehow been able to bring in a lot of money into Thailand then it's easy to buy property and whitewash the money that way."

 

Despite this, there have been occasional investigations into the "grey economy", which some studies say could be half of Thailand's GDP. This is money obtained from businesses on which no taxes are paid or businesses that are illegal, such as gambling and prostitution.

 

"Now, I'm not saying that is the main focus of the crackdown [on foreigners' property transactions]. I still think the main focus of the crackdown is basically a reinforcement of the legal provisions in the land code."

 

The Thai land code of 1954 states quite clearly that if you are a foreigner and use a Thai company to purchase land, you are violating the law if you hold more than 49% of the shares in that company. In practice, though, nominee structures using Thai individuals who have no financial interest in those companies is widespread, says Mr Collins, who has practised law in Thailand for 16 years.

 

"The flip side is, of course, that the officials themselves have known very well that this has been going on for a very long time. So I think you can't only blame the foreigners. You must also blame the officials for not enforcing the law as they should have.

 

"The reasons are many, and probably one is there is so much money at stake. So much money is being invested and there is also so money to be made in transfer taxes, specific taxes and money that the Land Office will generate for all those transactions that are going on."

 

The key issue as Mr Collins sees it is to what extent the officials are able to investigate these transactions, which can number in the thousands. "I'm not sure that they have the means or manpower to do that. I'm also not sure they really want to because obviously if they really do, it's going to affect the property market."

 

For the time being Mr Collins expects authorities to focus on new registrations and on making sure they follow the law. Some dubious cases such as those alleged on Samui will come under scrutiny but it would be difficult for the authorities to dig up all transactions across the board.

 

The Interior Ministry announcement issued on May 15 clearly states that the focus is on people who are using Thai companies to buy property for business purposes. "The circular clearly refers to people, foreigners, who do it for a business venture, to develop property as a business," Mr Collins explains.

 

While developers building fewer than nine villas have to apply for a building permit, they do not have to obtain a development permit. This means officials may not actually check the legality of the underlying transaction until the actual transfer takes place.

 

The Lands Department, in an announcement that predates the Interior Ministry's May 15 circular, requires all land offices in conjunction with the Commerce Ministry to check every six months the shareholding ratio and shareholders in companies that have obtained land ownership. The main focus is those with foreign directors and/or shareholders.

 

"So what they want to do is check that after they have transferred, they don't start changing the shareholding whereby the foreigners are given more shares than permitted by the land code," says Mr Collins. "They have the mechanism whereby they do an annual or semi-annual check to see whether the ratios that are required under the land code to legally be able to own land are still maintained."

 

This means foreigners can continue developing property on resort islands such as Samui and Phuket but they have to acquire true Thai investors and not nominees. The reason is that the Lands Department will investigate whether the Thai shareholders of these companies draw a salary and they will look at the financial accounts of the company.

 

Mr Collins says this changes the game because foreigners who want to develop property cannot always find suitable Thai partners. Also, Thai developers do not necessarily need to link up with foreigners because they can undertake such projects on their own.

 

"And what I always tell people _ I have practised law for nearly 25 years now _ is that a joint venture is like a marriage, more than 50% end in a divorce."

 

Mr Collins foresees that this move will lead to a significant slowdown in property development by foreigners who do not have Thai partners. However, projects that have already been launched will probably proceed because it is unlikely that the government will look at retroactive enforcement.

 

Individual foreign buyers, meanwhile, are on a safe footing if they acquire a leasehold for landed property, or a freehold condominium within the foreign quota of up to 49% of any development.

 

However, Mr Collins points out a common misconception that a 30-year leasehold can be extended twice, meaning 90 years in total. In fact, the civil and commercial code allows a foreigner only one extension of 30 years.

 

bangkokpost.com

[jitagawn]

Word has it from a friend that just put 5 million down on a house in Pattaya that the Thai government or local officals (in Pattaya)have frozen all sales and are not issuing new title papers.(for how long who knows-maybe just a short period until it sorts out)

Please correct me if someone else knows otherwise*-this is word of mouth)

There are several secretaries that work in real estate offices that have signed on as nominees for several hundred prperties all while making 12,000 baht amonth-

::Obviously the potential for extortion and wholesale seizure is enormous.

Could the Thais be that stupid as to shoot themselves in the foot ---once again?

Maybe... :: ::

[Bangkoktraveler]

If you can't buy land now (sales are frozen), then I assume you probably can not sell land now unless you sell to a Thai. What a shitty predictament.

[Guest]

Foreign investment is down 50%. These changes - call them laws or implimentation of existing law, but they are still changes in a very real and practical sense - go beyond property laws. The policy makers here are playing a very dangerous game.