Buying your dream home, or nightmare.

Ask here about the pleasures and pitfalls of buying, selling or renting property and real estate in Hua Hin. Building, design and construction topics welcome. Commercial or promotional posts for real estate companies or private properties are forbidden.
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tuktukmike
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Buying your dream home, or nightmare.

Post by tuktukmike »

Having read various threads on this forum i am surprised that no one seems to deal with the reality of buying your dream home in Thailand.

Firstly we do of course have many selling agents who all tell you how you can buy your dream home, i see mentioned how some are very trustworthy and others not so.

While they all may seem friendly remember they want your money, also unless i am very mistaken Farangs can Not own land in Thailand by law.

So you are promised the dream and told no problem just register a 1million bht company and its yours, this is just an illusion.

How much longer do people really think the Thais are going to let this continue, already questions have been asked in the Thai parliment about this abuse of the system and this is exactly what it is.

Next time anyone out there thinks of owning house and land just ask the selling agents one thing.

Can a Farang legally own land in Thailand, and the answer is No No No.

We met a Swedish couple only a week ago and their Swedish Lawyer based in Bkk warned them about the possable pitfalls that are in the pipeline so they decided to leave well alone.

Your thoughts please,

Mike.
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Post by buksida »

Exactamundo.

Why do you think I'm still renting after six years in Hua Hin!



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Post by Stormy »

Dont realy understand the problem? If you set up a company which own the property, but you own the company, what is the issue??? This is something that happens in many places around the world. If i, living in the UK want to move to Jersey - another part of the UK, buying via a company is the only real way i could
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Post by tuktukmike »

Hi Stormy,

I am not sure you fully understand the regulations regarding companys in Thailand.

Sure you can like all the others register a company, but you can only own 49% of said company.

Of course all looks ok as they use dummies to control the 51%, but the time is sure to come when the goverment takes a firm line with these inactive companys.

There was an article in the Bangkok Post about people with these companys and how the authorities are starting to show some interest.

The differance between here and jersey are stark, you can own 100% of the company you start up there but not here.

As i said in the first post like it or not it is illegal for a farang to own land in Thailand.

Mike.
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Post by Jim »

TTM, you seem to have started at a conclusion that property in Thailand is a rip off and very risky. You may be right, but you are missing several important points. The government is very keen to have farangs build and buy property, which is why property investment is exluded from exchange controls if you do the paperwork right. Second, the companies used to buy land are not inactive - you have to file returns whether you've traded or not, and pay to do so. Oh, and you get fined if you dont. If anything, the laws are becoming more lax - its not that long ago that condo investment was the only way to buy, hence the huge premium price for condos that still exists, and condo investment was the only way of getting your TT3 (now TT 40) to get your money out. Now it is the general category of "property investment" that qualifies.

Yes it is tricky, but keep an open mind. This is Thailand, things dont work the way they do in the west.
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Post by PeteC »

I have read that there is indeed a way for a farang to own up to 1 rai of land for residential purposes only. One of the stipulations was an investment of a minimum of 40 million Baht into "something". Not sure if a BOI investment, government bonds to be held ?? years or something similar. Pete
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Post by Randy Cornhole »

Dear god I don't know what to do now :(
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Post by tuktukmike »

Hi Jim.

Of course your right the goverment certainly do want foreign capital and i would not disagree with that comment.

You are also right that trading or not you have to pay tax, but we all know as i stated that this system is nothing more than a loophole that will eventually be closed.
As you say trading or not, just paying a minimum tax for your company that is not trading was the point i was making, these companys are nothing more than shelf companys used to get around the law in Thailand.

I know this for a fact and i feel that everyone on this forum also knows this, i have not stated at any time that property is a rip off in Thailand only that i wonder if people who are sold the dream realise that in law their house does not belong to them.

The prices out here are very cheap compared to England but i would never want only 49% of any house.

If as you say Thailand really is serious about our investments then why have they not gone down the same road as Malasia,?? where you can buy 100% of your house and legally own 100% of your business.

I really from a personal point of view would not say things have got any easier for us living out here, we still have to jump through hoops, pay tea money for exporting, and yes i do have all the right credentials but you still have to pay.

I just felt with all the property companys springing up everywhere maybe the facts should be told to potential buyers,

There are other reasons for posting this that relates to what officials are now considering doing in Pattaya but i will keep my powder dry until it becomes official.

Mike.
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Post by larry70dj »

After reading this thread, I've decided, I'm gonna buy a tuk- tuk off Mike and live in that. Both my sleeping and transport problems solved at a stroke.
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Post by hogus »

tuktukmike wrote:why have they not gone down the same road as Malasia,?? where you can buy 100% of your house and legally own 100% of your business.
Hey Mike,

it's great that you publish the information I gave to you about Malaysia 8) .

Of course, it's true that you can own a maximum of 2 houses incl. Land in Malaysia, without any Company or participation of locals.
The minimum of the investment must be 150 000 ringgits (1.5 mio Baht) for a house.
Mortgage is possible till 60 %, and whenever you invest more about 150 000 ringgits (can be also a deposit on a bank-account), you get a 5-year-visa automatically, if you are older more than 50 years.
It's a new program from the Malaysian administration, named "Malaysia my second home".

About Thailand...well, I'm totally agreed with you, that everybody who bought, buys or is planning to buy a house in Thailand just run behind an expensive illusion.
Of course, it's a big market and this includes big money, especially for the landlords, building companies and real-estate offices.
On the other side a foreigner never ever can become the owner of "his" house.
He just might pay for it...that's all !!!
Many people found a company, mostly an inactive Company (what's forbidden, too, to own land !), and some other spends trust in the loyal character of their girlfriends, fiancées or whatever.
(A Thai-wife has the same problem as her Farang-husband, she can't buy land anymore!).

In my eyes, just buy a house; if you're sure to be rich enough to give it to your Thai-girlfriend as "special gift", because she's soooooo nice and beautiful :roll: , or better keep your hands off from this kind of business.

You’ll just buy problems, nothing else !!!
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Post by Jaime »

hogus wrote:A Thai-wife has the same problem as her Farang-husband, she can't buy land anymore!
This is no longer correct Hogus. Thai women married to foreigners have been able to own freehold land for a few years now, although many Thai people remain ignorant of this fact. I estimate that at least a third of the houses on the development on which we have our house are owned freehold by Thai women who are married to foreigners...including my wife and sister in law!
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Post by hogus »

Well, Jamie, I must correct me lightly!

Until recently, Thai nationals who married foreigners became ineligible to own land in Thailand . The understanding was that once the foreigner and the Thai national were married the land became community property; officials believed this was perhaps a too convenient way for foreigners to circumvent existing land law.
At present, however, policy has changed; a Thai spouse is now legally allowed to own land in Thailand .

The foreign spouse may be required to sign a letter declaring the property to be the separate property of the Thai spouse, consequently waiving any claim on the land.

In other words, the foreign investor is not again undependent on the goodwill of a local...even if it is his wife.

Who proceeds in danger, can die in it mostly, or? :(
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Post by Jaime »

Hogus, the house in Thailand is in my wife's name. The house in the UK is in my own name. The house in the UK is worth approximately 10 times that of the house in Thailand. If you can't trust your own wife with 10 per cent of your real estate assets then you really have to question whether you have married the right woman - whether she is Thai or Farang! Bearing in mind that most couples (in the UK at least) mortgage their house in joint names I think there is far too much cynicism about putting a small part of your assets in the name of your Thai spouse. It's all about trust - if you don't trust your wife then don't buy her a house.... and then ask yourself why you are still married! If you still want to go ahead but are not sure about the integrity of your wife/girlfriend then don't invest what you can't afford to lose. It's that simple! At a time when foreign investors in Spain (a country of which I have some knowledge - check out my name) lose their houses because of a change in zoning laws or in Cyprus, Croatia and others because of displaced persons reclaiming the land I still think Thailand offers a good investment opportunity. Also, don't forget that for those of us with 'Look Kreung' our children can easily obtain Thai citizenship (a right for all children born anywhere in the world to a Thai mother) and ultimately gain ownership of the property, so there is a long term investment for our kids as well.

For those without Thai wife or kids, there is (according to Hua Hin Today) a company format that allows minority control of the company directly by the farang 49% shareholder without the need for dummy representatives. All investment decisions and company assets are therefore safe from the spectre of the Thai proxies. This is apparently the most appropriate form of company for foreign ownership of land but is rarely established due to higher set up costs and longer processing time.
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Post by buksida »

This thread has got quite interesting as I suspected it might, hopefully it will become quite informative too.

Having read the pros and cons above, call me paranoid but theres no way I would invest my life savings (I'm not fortunate enough to own a mansion in the UK and have loose change in the jar to buy a house here) in something that I cant legally own.

I have lived and worked in Thailand since I was 23, I have a Thai wife and a "luuk kreung" but I'm still seen as just a bloody tourist in the eyes of the government. All this bullshit with companies, 49% to the lowly farang, ghost signatures etc etc just to buy a house to me is absolutely rediculous. Correct me if I'm wrong but I also read somewhere that you can only lease the land if purchased through a Thai company .... so what happens when the lease runs out ??

For the moral crusaders here I hear you asking why I don't put it in my wife or sons name. Simple, my son cannot legally own anything until he is 16 (he's only 6 months old now) and putting everything you "own" in a foreign country into someone else's name is just foolhardy, nobody know what will happen 5 years down the road. Who would jump out of a plane without a parachute? There are no parachutes for foreigners in this country ... read recent posts on this board.

I am a cynical bastard yes, but in a country where you have less rights that a cockroach you have to be. There are reasons the government make these rules and regulations and they can just as easily move the goalposts if they feel like it.

Flame away sportsfans ....... :guns:
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Post by tuktukmike »

Good post Jamie,

But if i recall our conversation you had just remortgaged your house in the valleys to pay for your new home in Hua Hin. you also stated that you wanted to buy in total 4 houses.

This would seem to be a rather large investment here and in your wifes name.

I fully understand your point about trusting your wife but as we all know even the best of marriges can and do break down, so i think you have look at risk assesment.

Example, I did not want to post this yet but here goes.

In Pattaya there is already moves underway to check on Farang owned homes, this will involve officials paying a visit to check on ownership.

Sounds fine as you bought your home in a company name and leased it back to yourself at a peppercorn rent for 30years.

Now they want to see your accounts and ask why a 4million baht house is being rented at below market value to you a 49% shareholder.

This is considered unearned income for the company and as such as an inactive company tax must be paid at the highest rate, so they decide that your so called peppercorn rent is too low and demand that you pay the current market value and tax is assessed on this.

I too saw the article about this new style of company and i believe is whats called a public company, but can you imagine the paperwork involved in this and not to mention the tax.

You must understand that Lawyers and property developers are always coming up with new ways to bulk the system and this should answer the question first put about legality.

I know that in your situation all seems fine as you have a Thai wife and ok you bought in her name, but the post was really about the dangers of the many couples buying out here with their life savings and no thai partner.

It was never about trust for your wife or girlfriend, maybe someone else could start a thread on this subject, would be interesting.

Lastly jamie, your house in the valleys is ten times that of the value of your one in thailand. I never realised you could get a house in Hua Hin for less than 500,000bht :thumb:

Mike.

On a happier note,

Breaking news, Breaking news,

It is reported today that a Sri Lankan will today be awarded with a medal by the World Surfing Assosiation,

He achived the longest ride of a wave in history, on a cupboard, when questioned he reportedly said, we surfers are a dedicated bunch and sometimes you have to wait a lifetime for the right wave.

Asked what his plans for the future were he replied, maybe i will rollerskate down Mount Etna. :twisted:
Last edited by tuktukmike on Sat May 14, 2005 12:43 pm, edited 1 time in total.
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