Buying house and usufruct

[EricTh]

I would like to get some more information from people who actually went through the whole process.

 

1. If I were to put an usufruct on person A today but decide to change the land title's owner to person B a few years in the future, do I need to do another usufruct on the new owner at the land office again?

 

2. If I decide to sell the property in the future, do I need to pay another 1.5% to land office to remove the usufruct?

 

3. If I put a new usufruct together with transferring to person A name, could I get a discount from land office if I do it in one transaction? The cost of usufruct is 1.5% and cost of transferring is around 6% which means I have to pay a hefty 7.5%.

 

4. What are the annual fees that I need to pay to land office if I put an usufruct on my property? Alternatively, if I decide to lease 30 years without putting an usufruct, what are the annual fees that I need to pay?

 

I have trouble communicating with my Thai lawyer as his English is limited. So I hope somebody could provide some feedback on this.

Edited October 27, 2017 by EricTh

[hmficc]

Do you have a lawyer?

[fcgprg]

First and foremost you need a Thai Lawyer who speaks English before you do anything.

[EricTh]

Just now, fcgprg said:

First and foremost you need a Thai Lawyer who speaks English before you do anything.

 

Yes, he speaks English but not fluently.

 

However, it is preferable to hear from forumers who actually went through the process.

 

[Dante99]

1 hour ago, fcgprg said:

First and foremost you need a Thai Lawyer who speaks English before you do anything.

That means a lawyer you can communicate with in English.

[THAIJAMES]

I have not done a usufruct personally but will respond anyways in case someone that has does not.

 

1. If I were to put an usufruct on person A today but decide to change the land title's owner to person B a few years in the future, do I need to do another usufruct on the new owner at the land office again?

 

No, it is similar to a 30 year rental in that the usufruct is recorded in the back of the chanote and is still valid no matter who the land is transferred to.

 

 

 

2. If I decide to sell the property in the future, do I need to pay another 1.5% to land office to remove the usufruct?

 

There is no 1.5% fee for the usufruct.  I think it is around 300 baht to register it if you do it yourself.  The fee to remove it would be similar or no fee at all.

 

 

3. If I put a new usufruct together with transferring to person A name, could I get a discount from land office if I do it in one transaction? The cost of usufruct is 1.5% and cost of transferring is around 6% which means I have to pay a hefty 7.5%.

 

There is no 1.5% fee for usufruct, make sure your lawyer is not ripping you off. The usufruct is a standard form you can obtain from the land department.  The big decision will be if you want the usufruct for lifetime or for set period of time.  Not certain about this, but set period of time might mean that someone can inherit the usufruct, while lifetime means it expires on death.

 

 

4. What are the annual fees that I need to pay to land office if I put an usufruct on my property? Alternatively, if I decide to lease 30 years without putting an usufruct, what are the annual fees that I need to pay?

 

For 30 years rental, the tax is whatever you declare to the land department.  So if you say you are renting the property for 5,000 baht a year.  Then you will pay a tax  based on the rental agreement in the rental contract that is attached to the chanote.  I am on 30 year lease and was able to declare very low rental on my contract and land department didn't care.  Can't remember how much I paid but It was around 10K for 30 years.

 

For usufruct you may not need to pay any rental tax at all.

 

 

[EricTh]

Just now, THAIJAMES said:

 

There is no 1.5% fee for the usufruct.  I think it is around 300 baht to register it if you do it yourself.  The fee to remove it would be similar or no fee at all.

 

 

 

 

My Thai lawyer told me I have to pay 1.5% of the valuation price to the land office and not to the lawyer. If what you said is true, then I would be very happy.

 

I tried going to land office to ask but none of them can speak English well and the officer in charge was quite rude and told me (in Thai) to hire a lawyer to speak to them instead. But lawyers might not be honest.....

 

Thanks for all the answers.

 

Edited October 27, 2017 by EricTh

[BuddyDean]

You have to pay 1% at the land office up front on the rent amount you made up...so maybe they accept 500,000 for thirty..you play 5000, but you are still responsible for rental tax that is usually a skeleton in the closet....and a lot more than 1%.  The Usufruct survives transfer of ownership...but you will pay a lot for the transfer.  It gets quite a bit less after five years.  Also, usufruct is not meant to be used as a way for foreigner to circumvent ownership restrictions on foreigners..it was meant for agriculture land.  Yes, there are rule breakers at various land offices, and the attorneys will know the weak spots at every office.  Not a game I am playing.

Edited October 28, 2017 by BuddyDean

[evenstevens]

just checked  my records from 12 yrs ago(2005)

my lawyer fees were 8000 baht  with extra rider clauses added to usutruct to provide a safety net for both partys  in any event that it fell off a cliff(so to speak)

the land office fees were 17000 baht   which included all taxes being paid for a 30 year lease in place   at the time i felt very comfortable with the legal agreement put into place  to cover my investment and 12 yrs later it is safe as a bank so all up 25.000 baht to cover your backside hence 12 yrs ago ,small price to pay to have a water tight contractual legal  agreement etc etc   over the years have heard about you cannot own  land and house in Thailand b/s  , go to Malaysia where you can   ,  but who in their right mind  want to go there  as Thailand plays that country  off the break,for expat retirees

in summing up to the O/P  the 30 yr usutruct lease is as good as owning  it   but  find a good english speaking lawyer they are here,and cross your bridges as you come to them, in my case it was a enjoyable trip and still is, the very best of luck to you, a nice morning to all

[BuddyDean]

A 30 is different than a usufruct.  A 30 can be left to your heirs.

[prism]

9 hours ago, EricTh said:

 

My Thai lawyer told me I have to pay 1.5% of the valuation price to the land office and not to the lawyer. If what you said is true, then I would be very happy.

 

I tried going to land office to ask but none of them can speak English well and the officer in charge was quite rude and told me (in Thai) to hire a lawyer to speak to them instead. But lawyers might not be honest.....

 

Thanks for all the answers.

 

Seems like something is getting lost in translation with your lawyer. I'd suggest you go to the samuiforsale website and read their information on the various property rights agreements. 

Also, some land offices are reluctant to register a usufruct unless you are married to the landowner. 

[evenstevens]

16 minutes ago, prism said:

 

Also, some land offices are reluctant to register a usufruct unless you are married to the landowner. 

well thats a first in my experiences  or knowledge , please elaborate with  with factual information if  this is the case,   perhaps we can all learn  and again factual  information/ ,experiences  to the o/p  seek advice from a good english speaking lawyer who will dispel such as the above,whether its right or wrong, in my case not true at all,and further more have had first hand knowledge of many who have done the usufruct way and marrige has never been in the window at all,  and different land offices too

[BuddyDean]

Usufruct..poisoned fruit of the forbidden tree....googlit.

[Old Croc]

33 minutes ago, BuddyDean said:

Usufruct..poisoned fruit of the forbidden tree....googlit.

Wrong, you've been watching too much TV!

Nothing poisoned or forbidden in the word.

 

It actually means:

"the legal right of using and enjoying the fruits or profits of something belonging to another"

[xylophone]

1 hour ago, Old Croc said:

Wrong, you've been watching too much TV!

Nothing poisoned or forbidden in the word.

 

It actually means:

"the legal right of using and enjoying the fruits or profits of something belonging to another"

This makes interesting reading though...........

 

The usufruct in Thailand 

[HHTel]

2 hours ago, evenstevens said:

Also, some land offices are reluctant to register a usufruct unless you are married to the landowner. 

That's not true although registering of a usufruct is at the discretion of the land office.  Not sure they have to give a reason for refusal.

[Rama]

 

Usufruct is poison. You only have the right to stay on the property until you die; it gives you no other rights. Many Thai lawyers are taught it so its what many do. Do a 30 year lease and put in the lease that you have the right to transfer your leasehold rights to any person you desire without the leasor's approval. You can then 'sell' your lease to someone else if you want. Get a lawyer who recommends 30 year leases and speaks English - don't trust any lawyer that recommends usufruct leases...

[HHTel]

1 minute ago, Rama said:

 

Usufruct is poison. You only have the right to stay on the property until you die; it gives you no other rights. Many Thai lawyers are taught it so its what many do. Do a 30 year lease and put in the lease that you have the right to transfer your leasehold rights to any person you desire without the leasor's approval. You can then 'sell' your lease to someone else if you want. Get a lawyer who recommends 30 year leases and speaks English - don't trust any lawyer that recommends usufruct leases...

Very misinformed.  A usufruct essentially gives you all the rights of ownership except the right to sell.  With a usufruct, you can even kick your partner off the land!!! 

The rights to the fruits of the land.  Usually until death.  Consider this:  If just before you die, you grant a 30 year lease to a 3rd party, then the usufruct terminates on your death but the lease has to be honoured by the owner.

[hanssna]

I have done it, not too long ago, with the land office. No lawyer (although you may want to use one). 

The land is bought by me and my wife several years ago, now I plan / started building, so I wanted a contract. 

The land office boss was rude and reluctant at first, since we wanted a usufruct (we are married, and usufruct is lifelong, and has almost no registation fee) He stated : too much marriage troubles etc. 

So we proceeded with a 30 year lease, which is just as good as owning it. 

Had to pay 0,9 % tax/fee over the total "rentprice" that I am supposed to pay the next 30 years (example) so this was around 9000. Had to negotiate the brown evelop fee for him down to 10k for his ass#pocket. Total almost 20k but a tight contract, written as well on the back of the chanote. No more fees coming up.

Anyway if you decide to remove this stamp / lease in the future, why bother with it now ? You will probably pay the same fees again..  anybody have experience with this ? 

[sfokevin]

My personal experience was that I found a nice piece of land south of Hang Dong that the owner would sell for 400K... Great place to build a dream house... My plan was to have my gay partner who is Thai buy the land and then I would get an usufruct in my name...  I went to a very reputable Thai lawyer whos offices are on Huaykaew Rd... She told me that the Hang Dong land office would not issue a usufruct to unrelated parties such as ours... She said we would need to do a lease... She offered to craft a lease and go with us for submission her fee 20,000 baht... And we were also responsible for any fee the land office would charge... and that my partner could be liable for taxes on the rent income with the revenue dept.

 

I am still happily renting a beautiful house... 

Edited October 28, 2017 by sfokevin

[topt]

Suggest OP does a search in the Real Estate etc forum as their are a lot of topics where the usufruct gets mentioned.

 

One of the longest -

 

[hanssna]

6 minutes ago, sfokevin said:

 I went to a very reputable Thai lawyer whos offices are on Huaykaew Rd... She told me that the Hang Dong land office would not issue a usufruct to unrelated parties such as ours... She said we would need to do a lease... She offered to craft a lease and go with us for submission for 20,000 baht... And we were also responsible for any fee the land office would charge...

Why would this "reputable" but slightly expensive lawyer stop you from building a dream house ? You have a Thai partner, so why not just visiting the land office, and see if you can register a lease ? (Like I did, see my post before yours). Usufruct maybe hard to get, since you're not married ofcourse, and some land offices are reluctunt do do so anyway (they make no money with it, and have a headache if the relationship falls apart) but the 30 y lease is a fine option instead, may cost you 10 or 20k, but there are no more future fees . 

[topt]

3 hours ago, evenstevens said:

well thats a first in my experiences  or knowledge , please elaborate with  with factual information if  this is the case,   perhaps we can all learn  and again factual  information/ ,experiences  to the o/p  seek advice from a good english speaking lawyer who will dispel such as the above,whether its right or wrong, in my case not true at all,and further more have had first hand knowledge of many who have done the usufruct way and marrige has never been in the window at all,  and different land offices too

I have a usufruct made at the Pattaya Land Office some years ago.

Speaking to a local English speaking lawyer recently she said that I had been fortunate as Pattaya has refused to issue usufructs for some time now due to all the problems encountered with Thai/Foreigner agreements where one or other wanted to change.

[Old Croc]

27 minutes ago, xylophone said:

This makes interesting reading though...........

 

The usufruct in Thailand 

Thanks for that, I can now see where the guy got his headline.

 

However, reading the article it's really just a warning from a Thai legal firm about potential problems for people who don't quite understand what they're doing. It's not any more poisonous than any other contract or agreement you enter into here.

 

The firms suggestion that all property under a foreign usufruct could be seized by government is a scare tactic that deserves complete contempt.

Yes, as a foreigner you could possibly find yourself railroaded in a Thai court for any arrangement in which you get involved - usufructs, leases, businesses, marriage,  defamation, etc. The only way to avoid the vagaries of this strange country is to stay home in your lounge room.

I hold a lifetime usufruct, but have contingencies to ensure it is complied with.

I am aware a usufruct holder could theoretically lease the property for a further 30 years, but agree with the lawyers on this, that that any such lease would probably be overturned in favour of the Thai owner.

I have no further use for the property after my death other than for a pepper tree to sprinkle my ashes on..

 

[xylophone]

5 minutes ago, Old Croc said:

Thanks for that, I can now see where the guy got his headline.

 

However, reading the article it's really just a warning from a Thai legal firm about potential problems for people who don't quite understand what they're doing. It's not any more poisonous than any other contract or agreement you enter into here.

 

The firms suggestion that all property under a foreign usufruct could be seized by government is a scare tactic that deserves complete contempt.

Yes, as a foreigner you could possibly find yourself railroaded in a Thai court for any arrangement in which you get involved - usufructs, leases, businesses, marriage,  defamation, etc. The only way to avoid the vagaries of this strange country is to stay home in your lounge room.

I hold a lifetime usufruct, but have contingencies to ensure it is complied with.

I am aware a usufruct holder could theoretically lease the property for a further 30 years, but agree with the lawyers on this, that that any such lease would probably be overturned in favour of the Thai owner.

I have no further use for the property after my death other than for a pepper tree to sprinkle my ashes on..

 

Yes, it made interesting reading and I wrote this to a friend who brought it to my attention...........

 

"Very interesting, and reading through it does highlight some of the potential pitfalls of a usufruct HOWEVER you will see that some of the instances mentioned are very rare occurrences and in the main will not be encountered.

 

Having said that the last para seems to put it into perspective, inasmuch as, “if you follow our advice/use our services, then you won’t encounter the aforementioned problems, because we can structure it correctly for you”.

 

And I think that's basically what you are alluding to; that properly researched and structured, it is a viable option.

[Old Croc]

8 minutes ago, xylophone said:

Yes, it made interesting reading and I wrote this to a friend who brought it to my attention...........

 

"Very interesting, and reading through it does highlight some of the potential pitfalls of a usufruct HOWEVER you will see that some of the instances mentioned are very rare occurrences and in the main will not be encountered.

 

Having said that the last para seems to put it into perspective, inasmuch as, “if you follow our advice/use our services, then you won’t encounter the aforementioned problems, because we can structure it correctly for you”.

 

And I think that's basically what you are alluding to; that properly researched and structured, it is a viable option.

Yes deride the thing as poisonous then suggest they can do it for you at considerably more than the registration fee!

Having said that, I did use a lawyer, but not one of these ambulance chasers. 

[ToddinChonburi]

How does it work if there is a bank loan on the house and property ?

[HHTel]

Then I would guess the bank has a lien on the property.

[portroyal]

Why not choose a lawyer you trust and speaks your language ???

[pennine]

5 hours ago, BuddyDean said:

A 30 is different than a usufruct.  A 30 can be left to your heirs.

A 30 what? if you mean lease, it terminates on the lessee's death and is not inheritable.