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Airalee
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7 hours ago, LivinLOS said:
https://www.bdo.co.th/en-gb/insights/tax-updates/new-property-tax-law-in-thailand
After numerous attempts over the years to reshape the way property tax is imposed in Thailand, new property tax legislation has finally entered into law in Thailand.
The new law replaces the current House and Land Tax Act and the Local Development Tax Act and aims to encourage the productive use of land and improve tax collections. Taxes will commence to be collected under the new law from 1 January 2020.
Taxable properties
The tax will apply to land as well as condominiums, apartments and buildings, including houses, or any construction which can be used as a residence or for storage, industrial or commercial purposes.
People will now potentially be liable to tax on their homes, although a generous tax exemption threshold will apply.
The tax will be imposed on property held at 1 January of each tax year.
Tax base
Tax is currently imposed under the House and Land Tax Act on a property’s annual rental value at the rate of 12.5%.
Under the new law, the tax base shall be the appraised value of the property as determined for the purpose of collecting registration fees under the Land Code. In the case where there is no appraised value, the tax base will be calculated in accordance with the criteria, method and conditions as prescribed in Ministerial Regulations.
Tax rates
The following ceiling rates have been introduced for four categories of property:
(1) Properties used for agricultural purposes: 0.15%
(2) Properties used for residential purposes: 0.30%
(3) Properties used for purposes other than (1) and (2): 1.20%
(4) Vacant/non-utilised properties*: 1.20%
*If the land or building is left vacant or undeveloped for three consecutive years, the rate will increase by 0.3% every 3 years subject to a cap of 3%.
Tax rates have been announced for 2020 and 2021. For example, for a condominium unit owned by an individual that uses the unit as their place of residence and their name appears in the house registration book, the tax rates are:
Tax rates after 2021 shall be prescribed by Royal Decree. The local authority empowered to collect the tax has the power to impose a higher rate but in any case it shall not exceed the ceiling rates.
Tax exemptions
Tax exemptions are provided in the following cases:
- Land and buildings owned by individuals that are used for agricultural purposes shall be exempt from tax until 2022, after which a tax exempt threshold of Baht 50 million shall apply.
- A tax exempt threshold of Baht 50 million shall apply to land and buildings owned by individuals that are used as their place of residence, if their names appear in the house registration book on 1 January of the tax year
- A tax exempt threshold of Baht 10 million shall apply to buildings owned by individuals, where they are not the land owner, that are used as their place of residence, if their names appear in the house registration bookon 1 January of the tax year. By definition this would include a condominium unit.
Transitional relief
In the first three years that the new property tax is collected, if the tax assessed is higher than the tax previously payable under the House and Land Tax Act, the taxpayer shall be liable to pay the house and land tax amount plus a portion of the excess in each year, being 25% in the first year, 50% in the second and 75% in the third year.
The Fiscal Policy Office has issued a summary of the implications of the new law (in Thai language): Property-tax-guide-in-Thai-Fiscal-Policy-Office.pdf
Thanks for posting this. Somehow, I knew this was coming sooner or later.
So...just to make sure I understand what I’m reading...a landlord who is renting out multiple units (not including primary personal residence or second residence if also have family living there) is liable for a maximum of 1.2% of appraised value (sometime in the future as it appears there are already lower rates in place for the next couple years) and if the owner of the condo keeps it vacant for more than 3 years, the 1.2% cap actually increases every 3 years by 0.3% up to a max of 3% of appraised value.
So...a landlord renting a 5,000,000 baht condo would have (potential future) taxes of ฿60,000 per year in property tax based on the 1.2% rate. Will the landlord also be liable for the income tax that I hear about (the 12.5% of annual rent I read above)?
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I think the symbols mean that it also works great as a dessert topping or even a worthy substitute for various condiments. Let us know how it tastes!
In all seriousness though...I’ve always been a little confused when trying to choose a detergent.
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All depends on materials. Can’t see you doing much for 100k with your list of wants.
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20 minutes ago, Chazar said:
The govt have just driven a nail into the coffin for condos even farther with their taxes starting January , they sure know how to cripple an already ailing market.
1st condo free, second if family living in it 200 baht per million 3rd condos 3000 baht per million of value...........tossers
With falling rents its already getting difficult a 4 million baht condo will incur 12000 baht in tax or 1k a month off any rent income if you have 3 or more
Ouch. Do you have a link for that? Would love to send a copy to my LL.
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1 hour ago, EricTh said:
I do agree with you.
I think most native English teachers aren't really that keen to teach and their teaching skills are bad. Most just want to stay in Thailand on a long-term basis.
There are a few good native English speakers who can teach well but those are the exceptions rather than the rule.
It's a matter of who can teach clearly to second language learners rather than whether they are native speakers or not.
It’s not just that they can’t teach. Even those that can (and are good at it) know that Thailand offers a “package” that just can’t be beaten by other countries. Chiang Mai rides pretty high in that regard and the low(er) salaries seem to bear that out.
The people running the show here in Thailand aren’t stupid. People can rant and rave all they want about moving to (insert Asian country here) and how the salaries are so much better...but the truth is...if it was so much better, they (the teachers) wouldn’t have chosen Thailand in the first place.
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It’s gonna be tough for them to find teachers that are able to properly mispronounce English in the “Thai way”.
For example...if I write my name using the Thai alphabet using the letters that create the proper pronunciation of my name, they can pronounce it, but tell me that it isn’t correct because it’s not the Thai way of pronouncing it. They then go on to tell me how it is supposed to be spelled in Thai in order to have their misspelling match their mispronunciations.
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6 hours ago, richard_smith237 said:
Unless you place a value on the education of your child.
My Sons school costs:
Entrance Fee: 250,000 baht
Deposit: 50,000 baht (returnable)
Annual fee: 628,300 baht (3 terms)
Total outlay for first year: 928,300 baht (±US$30,700)
Next year: 628,300 baht (±US$20,780)
Its not cheap, but neither is it a rip off... Of course, if someone is unable to see the value in an excellent education then unless they have been lucky they are unlikely to be in a position to afford it for their children and will claim such things 'a bloody rip-off'...
From the best schools in Thailand the Best Universities in the world are within reach. It's all about providing our children with the best possible potential, unfortunately this comes with a premium.
Agreed...with caveats.
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Not sure if I’d call it a “rip off” when I see the prices quoted. Overpriced for what you get, but considering the next step (for high school) would be (to use the US as an example)...schools such as Andover, Exeter, St. Pauls, Groton, Hotchkiss, Deerfield and Choate, with tuition running $60k+ (not including travel) and some people actually want to raise their kids rather than ship them off to boarding school....what are the better options?
If I had the money (and kids) though, I’d probably prefer to send mine off to the government school, tell them to just daydream their way through classes, and put the money into investments for their future while diligently homeschooling them after hours. I sure wish my parents had done that for me. Haha. If you think the International Schools or even New England prep schools are expensive, you should see how much “alternative” education (secretive corrupt private “reform” schools) costs.
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40 minutes ago, xylophone said:
Here in Phuket, there are plenty of houses/condos for sale and they are not moving much at all
I was looking around (online) at condos in Phuket. Don’t like the idea of the long term leases that seem so prevalent down there.
41 minutes ago, xylophone said:have a couple of friends who tried to sell their houses here to no avail, although I would say that they were not keen on dropping their prices, but then again that seems to be a farang mindset and I do believe that many others will adopt this mindset to their detriment.
Well....you do know that they deserve that appreciation don’t you? They all seem to be counting their money before it even sells all the while patting themselves on the back for being such financial geniuses. Then...they want to double dip on the profit with the exchange rate difference now that their home currencies have fallen off a cliff. Sure hope they like their homes more than I like my cash.
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How about banning toxic neg-am mortgages where the “teaser” rate tricks people into signing up for a loan that they won’t be able to manage after the rate (and payment) skyrockets.
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17 hours ago, snoop1130 said:
3. The third package "Good House with down payment" aims to reduce home-purchase costs. The government will offer a cash-back of Bt50,000 per buyer on the down payment.
Pulling demand forward by saddling people with debt in order to purchase overpriced houses/condos. What could go wrong?
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7 minutes ago, ramrod711 said:
Ok, I got it, Thing is I don't expect insurance would cover it, that's why I say the policy is basically worthless. Diabetes is a main factor in heart attacks and strokes, they tell me up front that I won't be covered for those or insulin etc. The net result is that any claim would be open to interpretation which is too big a loophole for any insurance company to ignore. I guess what it comes down to is which option is better for Thailand; I have money in the bank which would cover any medical problem at no risk to them, or I get insurance which may or may not cover me, go to the hospital, the insurance is worthless so they have to attempt to recover their out of pocket expenses from me. I may or may not have the money or I may not be in any condition to bring it. Seems to me that having the money up front would be their best option. By the way, I would never expect Thai people to pay for my medical care.
I hear ya. The insurance is a joke. Nothing but a gift for the insurance companies. Kind of like the new “money in the bank” for the visa is a gift for the banks. Wouldn’t be surprised to see them hit expat condo owners with property tax sometime in the future too.
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53 minutes ago, ramrod711 said:
I'm no expert regarding insurance. The way I see it is that the minimum acceptable policy is 400,000 baht. If I put 400,000 baht in an account that only allows me to withdraw those funds for medical expenses there is no increased risk to Thai medical services. The insurance pays a maximum of 400,00 baht, I pay 400,000 baht. I'm not saying you don't have a point, I'm saying I don't see it. Sorry
I agree 100% with the money in the bank idea.
Allow me to use myself as an example so that you might better understand my point. I have psoriasis. The cost for a medication like Stelara (biologic) is over US$11,000 per month. No way I could afford that. How much should my insurance premium be if I want that covered?
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5 hours ago, ramrod711 said:
What I am not willing to do is pay for coverage that doesn't cover my pre-existing condition.
I agree with everybody that the policies being pushed are <deleted>, but what you’re asking for is akin to buying automobile collision insurance after the accident has already occurred.
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11 minutes ago, KSwr7UDHyn said:
Why? This forum is about real estate. If you want to have a thread about renters, start one. The OP seems to be, quite obviously, talking to and about owners.
Good for you. There are a lot of factors that might cause that to be true.
But, I think a lot of farangs that rent or buy in Thailand, do so hoping to retire or live here for an extended period of time. So, getting priced out of the rental market or having to downgrade their lifestyle because rents went up might be something that they want to hedge against.
And hedges, in general, tend to cost you something. So, people that want to hedge, hedge. People that don't want to hedge, don't hedge. That's up to you.
BTW, if you purchased AT&T stock when it first spiked to around 22'ish on your chart, which seems to be around the late 1990's, it appears that that it would have taken you nearly two decades for the stock to simply get back to the price you paid for it. And for a good part of that time, it was worth half of what you paid for it.
And don't try to play both sides where you say, "Well, at least you got part of that back in dividends." In theory, you're living off (or paying your rent from) the dividends so your brokerage balance isn't holding all of those dividend payments, it's simply 50% less than what you had before.
It's not a bond where you're going to get your money back in 10 or 20 years. AT&T could sink into the toilet and get bought out by some other telecom who slashes the dividend. Maybe you buy in at 30 and drops to 10 over the next 5 years, but you're getting your dividend, so who cares, right?
But then they get a buy-out offer at 15 a share from AZ&Z, which they are forced to accept, and post buy-out AZ&Z slashes the dividend to $0 in order to turn the company around.
Now, you're down 50% on your investment and you have to try to put that into another dividend stock but with half of your original money so . . . bye, bye income.
I don't want to debate a specific stock but it's apparent that it's unrealistic to think that you can just post a screen grab from some dividend stock and declare, "Ta-da! Case closed."
I'm happy for you if that's the path you've chosen and you're happy with your decision. I actually don't think it's a bad move, but I don't think what you've presented works for everyone, and their are all sorts of risks that you haven't explored, so it's not some magic investment formula.
Remember the old saying, "There's no such thing as a free lunch." Dividend stocks have their own risks and trade offs.
Everybody has their own tolerance for risk. However, it’s a bit disingenuous of the owners on this board to go on and on and on about their paper profits on a condo purchased 15 years ago. Currently, the P/E ratio for condos here is absolutely in favor of renting. It’s always about the P/E ratio.
I also say this as someone who is currently in the market to buy. I don’t consider hypotheticals (rising rents, rising purchase prices). It’s purely an emotional decision. From an investment standpoint, it would be completely irrational to buy.
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2 hours ago, KSwr7UDHyn said:
And many of those dividend paying stocks could cut their dividend during a recession or other economic hard times. Which would both drive down the price of the stock and lower your income.
I'm not saying that you should buy real estate rather than own equities, I'm just pointing out that due to the sequence of returns issue, you can't just make some projection of earning 7% like it's interest on your savings account.
It fluctuates and there will be up years and down years and some years you could be dipping into your principle which is going to kill your chances of hitting 7%.
BTW, the other thing here is that the original proposal here was rent was 4% of the 6 million (i.e. 240,000 baht) which is EXACTLY your after tax amount on your blue chips paying a 5% dividend. Even if you avoid rent hikes for 20 years, eventually you're going to pay more than you pay today and then the 240,000 and now you're dipping into principle again.
Then perhaps this article should be about the plight of renters instead of listening to owner sob stories.
The rent for the original unit I leased is lower now than it was 8 years ago. The condo I’m in now rents for less too.
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18 minutes ago, KSwr7UDHyn said:The market grows at a 7%/annul rate, but it does not grow in a straight line. That 7% is a historical average over many years.
It also assumes that all of your money remains invested.
So, let's say that you decide to set aside 6 million baht ($200K USD) and invest that in the market and use the proceeds to pay your rent at a rate of 4% of your principle balance.
If the market goes up 7% every year, that's wonderful. You will surely come out ahead and have made an excellent financial decision.
But what happens if the market tanks 20% the first year and instead of pulling out capital gains you have to pull it out of principle?
Your 6 million declined in value by 1.2 million baht. Plus you're paying 20,000 baht a month (x12 months) which is another 240,000 baht gone. So, now you're down to $4.56 million.
Basic retirement theory says you should drop your expenses to match the new value of your portfolio value. So, unless you're willing to give up your lease and get a place for 15,200 baht a month, you're going to have a hard time catching up to that 7% per annum rate of return because every monthly payment is eating into your principle.
Even if the market immediately bounces back 30% the next year, you're still short of 6 million (you would be at 5,928 million). But, that's rarely how the market works. You are far more likely to see 15% the next year, and maybe 15% the year after. But, since you started from a deficit, you're not just taking the rent money out of your capital gains, at least for awhile, you're pulling the returns out of principle so you're going to fall behind even further.
Look up "sequence of returns" for more information on how what the market does in the first few years impacts your overall returns.
$200k (฿6,000,000) invested with a 5% dividend in a boring blue chip stock would bring in ฿300k (฿240k after taxes). Plenty to pay rent without touching the capital.
As a renter, one doesn’t have to pay any monthly/quarterly/annual common fees. No special assessments for ongoing maintenance which the low common fees never cover. Don’t have to pay for the new fridge, tv, washer, furniture as it wears out. No purchase or selling fees/commissions. Freedom to move at any time.
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51 minutes ago, Kurtf said:
I've been trying to sell our house in Mae Taeng for a couple of years and have reduced the price to very low levels and have very few people interested. Or those that are interested are Thai people with no funds.
Apparently not low enough. Sounds like you’re chasing the market down rather than getting out in front of it.
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I’m reminded of this video from my (US) housing bubble blogging days.
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3 hours ago, rooster59 said:One retiree I knew in Hua Hin has just had to return home due to poor health and try as he might he was unable to sell on his condo before he left.
He didn’t lower his price enough.
3 hours ago, rooster59 said:I too have a condo in Pattaya that four years ago would have commanded 50k baht a month rental, nowadays I cannot even rent it for 30k baht.
Try 20k baht.
The market has spoken.
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14 minutes ago, AussieBob18 said:
I had a crown done there (Dr Pattarika Angasith) and would also recommend them. Even though I live in BKK now I wouldn’t hesitate to fly up to CM in the future if I needed more work done.
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35 minutes ago, RobbyXNorway said:
Cant walk 10 meters without spotting a "For Sale/For Rent" sign here in Hua Hin. And empty buildings everywhere. Even stuff that seems buildt for thais stand empty in the outskirts of HH.
Know of a realestate business here in HH that has been open for well over a year now and not a single sale, even though they cut their take.
I know people here at the complex I live who have bought a condo but do not have a secure visa situation. Would be kinda awful to not be allowed to stay any longer in Thailand, and have an ownership of a condo you cant sell anywhere near purchase price.
Just out of curiosity...what do you mean by not having a secure visa situation? I’m on an extension based on retirement (or whatever it’s officially called) with 800k in the bank...and even that doesn’t feel very secure.
If I do buy....a big “if”....I’ll take care of the agent...but they’ll have to beat the seller down on the price to what I feel is an acceptable level.
renovation costs of condo?
in Pattaya
Posted · Edited by Airalee
Do you want it done cheap or do you want it done right?
I recommend spending some time on the Boonthavorn website so that you can get an idea of what materials (flooring, appliances, countertops, sinks, faucets, toilet etc etc etc) will cost.
Look at condo listings for sale. Look at the (mostly) horrible remodel/renovation jobs. Those are the ones where the owner tried to save a few baht.