I think we should wait and see the outcome of all this before jumping to any conclusions.
If you read the statement by the government (I've printed it below) it is aimed at the foreign run companies who trade as property developers.
The government are obviously not happy that foreigners are coming over here and making large sums of money from property but are not paying their due taxes, gotta say I agree with them there.
The statement says that land departments should question the legality of any companies where foreign run companies "apply to own land for the objective of doing business in real estate". They detail in the statement that the companies they consider doing business in real estate as "the Ministry of Interior was reported that there have been foreigners working with Thais or had commissioned the Thais to set up corporation to do property trading by initially buying land and house for the purpose of making it a home or office and subsequently apply to change the usage to for sale or sub-divide and sale to foreigners"
Apparently the land office here is seeking clarification from the government on how to interprete this direction.
We shall see soon enough,
Burger
Translation of the statement:
Referring to the guidelines of land ownership set up jointly by the Land Bureau and the Ministry of Interior for legal entity which has foreign ownership:
There upon, the Ministry of Interior was reported that there have been foreigners working with Thais or had commissioned the Thais to set up corporation to do property trading by initially buying land and house for the purpose of making it a home or office and subsequently apply to change the usage to for sale or sub-divide and sale to foreigners which constitutes a breach of law.
For the purpose of preempting any actions which may circumvent the laws or as to prevent the purchase of land which may benefit foreigners under the Land Act 74, second paragraph, the Ministry foresees that an additional practice should be applied in the event that a company limited, limited partnership or partnership which has already been set up and apply to own land for the objective of doing business in real estate (except public company limited or other legal entities which were permitted to own land under other applicable laws such section 27 of Board of Investment Act B.E 2527 or property fund, commercial bank, banks set up under special law, finance company, security firms, life and non-life insurance companies).
If it is appears that the company is having foreigner as shareholder or Director or if there is a reason to believe that it is nominating the Thais to hold shares for the foreigners, the officer is to investigate income of every Thai shareholders in the legal entity by looking into their work history of what kind of work they have done and what monthly salary they earned, all of these proved by evidence. If the purchased is funded by loan, then loan evidence must be provided. If after the investigation, it is led to believe that the application for land ownership is circumventing the law or any individual is purchasing land to the benefit of foreigners under the Land Act 74, paragraph 2, the officer is to investigate the case in detail and report to the Land Bureau to be waiting for further advise from the Minister.
Foreigners can no longer buy houses in Thailand via company.
This thing may be moving along faster than thought? I have a neighbor here who has two single family houses. The main dwelling he bought under an LTD company. The second is a rental property in his Thai wife's name. They have been honest people as they pay regular taxes on the income they receive as rental income, in fact, the local tax person visits them quarterly, as it's a big house and rents for 75K Baht per month so the revenue is significant.
He told me this morning that when the tax woman showed up last week, she had all the facts that their primary dwelling was purchased under an LTD company. She has given them two weeks to supply her with: 1) The names, addresses, and phone numbers of all the Thai directors. 2) The salary records showing what these directors have been paid. 3) Proof of what the "core" business purpose of the LTD company is. 4) Tax payment receipts that the LTD company has paid on the revenue the "core" business has generated.
He and she are about ready to S&*t bricks as there is no way they can come up with this stuff unless they forge everything and, do it within 2 weeks. He said he doesn't think he has any alternative but to transfer ownership of house #1 to his wife immediately and disolve the LTD company. Then, be honest with the tax person and see where the chips fall. He's also thinking he could lose his visa and get blacklisted? Stay tuned for updates if he tells me. Pete
He told me this morning that when the tax woman showed up last week, she had all the facts that their primary dwelling was purchased under an LTD company. She has given them two weeks to supply her with: 1) The names, addresses, and phone numbers of all the Thai directors. 2) The salary records showing what these directors have been paid. 3) Proof of what the "core" business purpose of the LTD company is. 4) Tax payment receipts that the LTD company has paid on the revenue the "core" business has generated.
He and she are about ready to S&*t bricks as there is no way they can come up with this stuff unless they forge everything and, do it within 2 weeks. He said he doesn't think he has any alternative but to transfer ownership of house #1 to his wife immediately and disolve the LTD company. Then, be honest with the tax person and see where the chips fall. He's also thinking he could lose his visa and get blacklisted? Stay tuned for updates if he tells me. Pete
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tuktukmike
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Well I have just returned from the meeting at the Majestic.
The whole situation is as posted, If you want to buy land (1 rai) you must invest 40million baht into goverment bonds.
Anyone who has bought a house through the company route could now be in serious trouble, You cant allow the 51% thais to sign off their company rights.
Last night someone told me who works in real estate there would be no problem due to the Thai shareholders having to show where their funds came from to become directors.
Easy he said, we just show that we loaned the money to the Thai directors and all is ok. Sorry wrong again.
Interesting times lie ahead out here,
Mike.
The whole situation is as posted, If you want to buy land (1 rai) you must invest 40million baht into goverment bonds.
Anyone who has bought a house through the company route could now be in serious trouble, You cant allow the 51% thais to sign off their company rights.
Last night someone told me who works in real estate there would be no problem due to the Thai shareholders having to show where their funds came from to become directors.
Easy he said, we just show that we loaned the money to the Thai directors and all is ok. Sorry wrong again.
Interesting times lie ahead out here,
Mike.
Just one or two points, if I may.
First, please can those who do not own property through a ltd company please refrain from all the "I told you so's". Even if you are right, the less of these you post, the less likely it is that someone who has bought property this way will come looking for you to discuss your gloating in person. The "you've lost lots of money, I haven't" attitude is not very nice.
Second, as usual in Thailand what is going on is as clear as mud. I know we shouldn't advertise other sites, but there is altogether less hysterical coverage on the Phuket Gazette website. And please don't say that there is bound to be as they have even more to lose...
Third, having read everything that I can, it seems to be that the application of the law (as this is all this is) is not aimed at stopping foreign ownership, but at untaxed profits/salaries/loans. But I know this is total conjecture as none of us knows.
Jim
First, please can those who do not own property through a ltd company please refrain from all the "I told you so's". Even if you are right, the less of these you post, the less likely it is that someone who has bought property this way will come looking for you to discuss your gloating in person. The "you've lost lots of money, I haven't" attitude is not very nice.
Second, as usual in Thailand what is going on is as clear as mud. I know we shouldn't advertise other sites, but there is altogether less hysterical coverage on the Phuket Gazette website. And please don't say that there is bound to be as they have even more to lose...
Third, having read everything that I can, it seems to be that the application of the law (as this is all this is) is not aimed at stopping foreign ownership, but at untaxed profits/salaries/loans. But I know this is total conjecture as none of us knows.
Jim
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tuktukmike
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Jim
You are of course right, all that is happening is that they are now going to implement the existing laws.
If you had been at the meeting today this would have been made clear to you and the rest of us.
The gentleman from the land office made it clear that Thailand wants farangs here and of course he went to great lenghs to explain the condo route.
As for the company route this has nothing to do with profits/salarys/or loans.
It was an axplaination of the fact that a farang can not own land and that the company route will be looked into. if it is found that a company was formed only for the purpose of buying land then they can seize the property pending a court case. It will then be for the courts to decide if and how much you may recieve from the sale of your land.
Someone at the meeting asked if they could sue their lawyer through the law society for giving bad advice, I will let others tell of the response that got.
As for the Told you so, well please understand that many people have been rubbished about our comments on the company route.
For me, I worry about the older people who may lose their life savings due to these changes.
But for the moment lets all just wait and see what the results will be, just maybe it will quieten down but i am not holding my breath.
Mike.
You are of course right, all that is happening is that they are now going to implement the existing laws.
If you had been at the meeting today this would have been made clear to you and the rest of us.
The gentleman from the land office made it clear that Thailand wants farangs here and of course he went to great lenghs to explain the condo route.
As for the company route this has nothing to do with profits/salarys/or loans.
It was an axplaination of the fact that a farang can not own land and that the company route will be looked into. if it is found that a company was formed only for the purpose of buying land then they can seize the property pending a court case. It will then be for the courts to decide if and how much you may recieve from the sale of your land.
Someone at the meeting asked if they could sue their lawyer through the law society for giving bad advice, I will let others tell of the response that got.
As for the Told you so, well please understand that many people have been rubbished about our comments on the company route.
For me, I worry about the older people who may lose their life savings due to these changes.
But for the moment lets all just wait and see what the results will be, just maybe it will quieten down but i am not holding my breath.
Mike.
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tuktukmike
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- Joined: Mon Apr 18, 2005 1:02 am
Jim
I dont honestly know of anyone out here who really wants to see anyone lose their homes.
It does no one any good whatsoever, most people have worked hard for what they have bought.
As i have stated many times we found a house when we first arrived but withdrew from buying after a long talk with a good friend.
Should the law change then of course we would then reconsider.
If you think i am gloating then you should have been at the meeting and seen the worried faces there,
This is not the time for remarks to forum members but what is needed is a local group of people to try and lobby the local officials for more clarification.
They have this in Pattaya and seems to work very well.
I am sure Hogus will post the e mail address or the guy from the land registry, he did ask that anyone with questions should e mail him and that he would do his best to give a full reply.
Mike.
I dont honestly know of anyone out here who really wants to see anyone lose their homes.
It does no one any good whatsoever, most people have worked hard for what they have bought.
As i have stated many times we found a house when we first arrived but withdrew from buying after a long talk with a good friend.
Should the law change then of course we would then reconsider.
If you think i am gloating then you should have been at the meeting and seen the worried faces there,
This is not the time for remarks to forum members but what is needed is a local group of people to try and lobby the local officials for more clarification.
They have this in Pattaya and seems to work very well.
I am sure Hogus will post the e mail address or the guy from the land registry, he did ask that anyone with questions should e mail him and that he would do his best to give a full reply.
Mike.
Now that is a much more constructive way forward. From reading responses, websites and other forums from other places around Thailand, it seems no-one - be they land officials or foreign "investors" - knows exactly how this is going to work. Or even inexactly.
We all need clarification and help here, which will hopefully happen over time.
We all need clarification and help here, which will hopefully happen over time.
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Well, it was a really an interesting meeting!tuktukmike wrote: I am sure Hogus will post the e mail address or the guy from the land registry, he did ask that anyone with questions should e mail him and that he would do his best to give a full reply.
First of all, nobody needs to be scare to come into trouble, if he just bought land & house in his Thai-gf's or Thai-wife's name.
He isn't an owner of anything and haven't absolutely no rights on the property of his Thai spouse or gf.
Second, it's allowed for foreigners to own land & house for residential purpose and not more than 1 rai in area, if he brings not less than 40 million Baht into Thailand and invest this money as prescribed in Ministerial Regulations.
Third, those who bought land & houses as a juristic person (Limited Company, Public Company Ltd. Limited partnerships etc.) could come into trouble, because land trading is not permitted for foreigners, or foreigners that operate as juristic persons!
More details can be found under the following official government-link:
http://www.dol.go.th/eng_version/menu.php
For further information you also can contact the Land Legal Official:
Khun Suwat Kerdphon
Tel. 01-323 2311, 02- 225 5758, 02-225 5734
e-mail: suwat59@hotmail.com
For juristic persons details can be requested under:
Bureau of Business Registration
44/100 Nonthaburi 1 Rd.
Nonthaburi 1100
Tel. 02-547-4423-4
Fax.02-547-4441
If there are any questions about taxes etc. you should click through the website:
http://www.rd.go.th/publish/5998.0.html
Hope these informations are helpful for everybody who's interested about the real laws and investment-possibilities in Thailand.
Indeed!timego wrote:So to keep your home just invest 40 million into the country.
easy.
"Safe as houses"
Why would anyone in their right mind invest 40 million baht (that's over half a million pounds sterling folks!) for the right to own 1 rai of land? 1 rai is only 1600 sq.m or 0.16 hectares and you'd still need to pay for the land on top of the 40 million!
This is along the lines of the Elite card scheme - designed to secure Thailand as a destination for the seriously wealthy only. But I just don't get it and judging by the lack of success of the Elite card, neither do the Thai government because surely anyone who can wave goodbye to that sort of money can afford to buy and actually OWN a property in far more developed and 'investment friendly' locations elsewhere in the world.
Sounds bad man, he could try claiming the records were destroyed by a computer virus??? But the real culprits are all these property seller companys who dupe the poor mugs into buying! And I don't mean just thai either! A lot of estate agent falang knew this was coming yet kept up the pretence as they raked in the cash! They should hang their heads in shame if they have any at all that is!prcscct wrote:This thing may be moving along faster than thought? I have a neighbor here who has two single family houses. The main dwelling he bought under an LTD company. The second is a rental property in his Thai wife's name. They have been honest people as they pay regular taxes on the income they receive as rental income, in fact, the local tax person visits them quarterly, as it's a big house and rents for 75K Baht per month so the revenue is significant.
He told me this morning that when the tax woman showed up last week, she had all the facts that their primary dwelling was purchased under an LTD company. She has given them two weeks to supply her with: 1) The names, addresses, and phone numbers of all the Thai directors. 2) The salary records showing what these directors have been paid. 3) Proof of what the "core" business purpose of the LTD company is. 4) Tax payment receipts that the LTD company has paid on the revenue the "core" business has generated.
He and she are about ready to S&*t bricks as there is no way they can come up with this stuff unless they forge everything and, do it within 2 weeks. He said he doesn't think he has any alternative but to transfer ownership of house #1 to his wife immediately and disolve the LTD company. Then, be honest with the tax person and see where the chips fall. He's also thinking he could lose his visa and get blacklisted? Stay tuned for updates if he tells me. Pete
OT slightly -
This 40 million baht 'investment' in thai bonds.... They must be seeking some seriously daft people on that on!
Lets play calculations
40,000,000 / 71 = £577,464
So over half a million sterling for the land restriction to be lifted and one poxy rai of land allowed! And after this ungodly sum is wrapped in the thai financial tendrils you still have to buy the land and the build materials and get it constructed! By the end of the year when its finally complete your orginal investment could be worth a lot less that the 40 million (which may now be 'locked in' the thai banking system!).
Alternatively....
£577,464 invested in a high interest account in the UK at 5 % interest Tax free over one year = £28,873 in the interest alone!
Which do you think a foreign invester would choose to do? I know which one my money would be in!
After a lot of reading on this topic, and after careful consideration, I have come to the following conclusions:
Nothing has changed. The Thai laws regarding foreign ownership remains the same this week as it was last week. It seems to me that the Thai government are currently taking exception to foreign speculators /developers who are buying land on the pretext it is for the company reasons but really was bought for house building project purposes, (large or small). They see some of the developers earning dollar millions and want to ensure that this practice is done legally. By doing so they have awakened the sleeping nightmare that for years we Ferangs have chose to ignore.
When I bought my house through a company I was never comfortable with creating a company that doesn't trade. I did so however under no illusions, possibly against my better judgement, but I decided I could not ignore the rapid rise in house prices in the area. It was my decision and I take full responsibility. I can not blame estate agents or developers for telling me lies. The laws were and still are very clear and I was clearly aware of them.
I predict this 'awakening' will only be temporary. We will all soon be back burying our ostrich heads in the sand so to speak, as we return to our dozy make-believe dream worlds, believing that we actually own our houses through our bogus companies we have created. People believe what they want to believe and no one wants to believe they have squandered their lives savings by creating an illusion of owning property in Thailand. They will therefore choose to believe there is nothing to worry about.
I predict house sales over the next month or two will be slow. Prices will remain static, and developers will think twice before pumping the prices of their houses up further.
If I had bought large amounts of land, and was sitting on it on pure speculation that I could just sell it on for a substantial profit in the future, I would now be very worried. Not too many people will want to pay inflated prices for land at the moment. New projects might be hard to start unless the developer is a Thai national, and I don't see too many of them in Hua Hin.
Will house prices plummit? I doubt it, unless there is mass panic as Ferangs want to quickly sell out. There may be a slow, steady decline in prices as home owners realise its difficult to resell. Condo prices may well escalate.
To summarise, I think this will be a nine-day wonder. The topic will blow over as we draw our attention to football matters and the world cup. It will simmer in the background like a sleeping volcano, no one quite sure if it will erupt in the future or not. Some of the most expensive real estate in the world sits on the San Francisco fault line. People enjoy taking risks, some risks come off and some become absolute disasters. My hunch is house prices will decline in line with the perceived risks. Less companies will be set up. Many Ferangs will hand the houses over to their wives, more divorces / splits will happen. 30 year lease options will become popular as will rents. Just think of all these young Thai female owners of houses with swimming pools looking to obtain monthly salaries as they decide to rent them out! Is that good or bad
Nothing has changed. The Thai laws regarding foreign ownership remains the same this week as it was last week. It seems to me that the Thai government are currently taking exception to foreign speculators /developers who are buying land on the pretext it is for the company reasons but really was bought for house building project purposes, (large or small). They see some of the developers earning dollar millions and want to ensure that this practice is done legally. By doing so they have awakened the sleeping nightmare that for years we Ferangs have chose to ignore.
When I bought my house through a company I was never comfortable with creating a company that doesn't trade. I did so however under no illusions, possibly against my better judgement, but I decided I could not ignore the rapid rise in house prices in the area. It was my decision and I take full responsibility. I can not blame estate agents or developers for telling me lies. The laws were and still are very clear and I was clearly aware of them.
I predict this 'awakening' will only be temporary. We will all soon be back burying our ostrich heads in the sand so to speak, as we return to our dozy make-believe dream worlds, believing that we actually own our houses through our bogus companies we have created. People believe what they want to believe and no one wants to believe they have squandered their lives savings by creating an illusion of owning property in Thailand. They will therefore choose to believe there is nothing to worry about.
I predict house sales over the next month or two will be slow. Prices will remain static, and developers will think twice before pumping the prices of their houses up further.
If I had bought large amounts of land, and was sitting on it on pure speculation that I could just sell it on for a substantial profit in the future, I would now be very worried. Not too many people will want to pay inflated prices for land at the moment. New projects might be hard to start unless the developer is a Thai national, and I don't see too many of them in Hua Hin.
Will house prices plummit? I doubt it, unless there is mass panic as Ferangs want to quickly sell out. There may be a slow, steady decline in prices as home owners realise its difficult to resell. Condo prices may well escalate.
To summarise, I think this will be a nine-day wonder. The topic will blow over as we draw our attention to football matters and the world cup. It will simmer in the background like a sleeping volcano, no one quite sure if it will erupt in the future or not. Some of the most expensive real estate in the world sits on the San Francisco fault line. People enjoy taking risks, some risks come off and some become absolute disasters. My hunch is house prices will decline in line with the perceived risks. Less companies will be set up. Many Ferangs will hand the houses over to their wives, more divorces / splits will happen. 30 year lease options will become popular as will rents. Just think of all these young Thai female owners of houses with swimming pools looking to obtain monthly salaries as they decide to rent them out! Is that good or bad