Buying a new house

[Neeranam]

I have a mortgage already but could pay it off any time.

I want to buy a new house in Hua Hin and starting to research.

One thing I see is freehold lease, can anyone tell me what this means?

I see some nice houses around 15 million and think I could buy some land and build my own for much cheaper, any thoughts on this?

Any other main things I should be thinking about at this stage, I'd do I need a lawyer etc.

Thanks

[Peterw42]

The term freehold lease doesn't make much sense. Its usually freehold which is outright ownership or leasehold which is renting. I think the term freehold lease is presenting a long lease (10, 20, 30 year) as being as good as, the same as, ownership. Implying that you own the lease and can sell it.

A creative real estate marketing term which basically means "for rent" with maybe a possibility of on-selling the lease. (The lease would need to have a "can be sublet and transferred" clause).

Edited November 18, 2018 by Peterw42

[baansgr]

No way to own land, and owning the house is worthless. Forget all the companies, leases, usufructs etc, thais will own and have control of it, dont bother.

[BritManToo]

3 minutes ago, baansgr said:

No way to own land, and owning the house is worthless.

I think the OP might be Thai.

Edited November 18, 2018 by BritManToo

[AtoZ]

I find the properties in Hua Hin horrible. It's all prefabricated Type A or B sort of box.

 

Is it for living or investment?

 

You can find so many "wow" properties in Ko Samui while everything in HH is "meh" with the same sort of expected return on investment.

[KittenKong]

11 hours ago, Peterw42 said:

I think the term freehold lease is presenting a long lease (10, 20, 30 year) as being as good as, the same as, ownership. Implying that you own the lease and can sell it.

A 99 or 999 year lease might be considered as being similar to freehold ownership but anything less is not, as far as I'm concerned.

 

For me the whole point about leases is that in order to be worthwhile they should last longer than your expected lifetime and also that of your children. Leases here are just advance rentals.

[Langsuan Man]

Any lease for over 30 years is not valid in Thailand, as is the practice of trying to issue three separate 30 year leases for the magical 90 years  

 

The estate agents have been trying to talk people into 90 year leases for years and the Land Office denies everyone of them

 

Usefructs are not impacted since they are considered agreements, and not leases 

[Geordieabroad]

Freehold / leasehold is the system used in the U.K.

Freehold means you own the house AND the land, leasehold means you only own the house but lease the land for a certain number of years.

The last property i owned in the U.K. had a "peppercorn" lease, which means 999 years

[rwill]

https://www.siam-legal.com/realestate/thailand-title-deeds.php

 

[xylophone]

3 minutes ago, rwill said:

https://www.siam-legal.com/realestate/thailand-title-deeds.php

 

This below from the link……...and those options are what exactly?

 

"Although Thai Law stipulates that a foreigner may not own land in Thailand, there are alternative options to owning a land in Thailand. We would be more than happy to discuss the options available to you with a meeting, an over the phone conversation, or by email".

[Speedhump]

1 hour ago, Geordieabroad said:

Freehold / leasehold is the system used in the U.K.

Freehold means you own the house AND the land, leasehold means you only own the house but lease the land for a certain number of years.

The last property i owned in the U.K. had a "peppercorn" lease, which means 999 years

A peppercorn means you pay a tiny amount for the lease. It doesn't have anything to do with the length of the lease. 

[HHTel]

Freehold Lease sounds a bit of an oxymoron.  It's either one or the other.

[English Engineer]

We are just completing a luxury pool villa in Hua Hin. The land is in my wife's name but leased to me. The house is in my name. A similar house in a moo baan would cost almost twice the amount. We bought a number of plots together to create a resort type environment, with the aim of selling to like minded people. The way I see is that should I survive for 30 years, if I had rented, the rent paid would exceed the cost of the house. Meanwhile we have a good quality villa to enjoy in our retirement years.

[KhaoYai]

On 11/18/2018 at 1:11 PM, baansgr said:

No way to own land, and owning the house is worthless. Forget all the companies, leases, usufructs etc, thais will own and have control of it, dont bother.

Not true.

 

Usufruct - if its registered at the Land Office and you use a lawyer to dot the i's and cross the t's, its fine and fully legal. 30 years max - the Thai courts have recently ruled that extension clauses are not legal.

 

Company Ownership - provided the company actually trades and has a reason to own property you can hold up to 49% of the shares in that company although some Land Offices will only accept 39%. The remaining shares must be Thai owened and the shareholders must comply with all the other requirements but if their shares do not hold voting rights, you control the company and therefore any property it owns.

 

Company ownership (genuine) is also the best route to take if you wish to pass your assets on to anyone when you die. You simply leave them your shares - no property taxes involved unless they decide to sell.

 

I am not a lawyer but the information above was given to me by a respected Thai lawyer - I believe it to be correct.

Edited November 19, 2018 by KhaoYai

[Langsuan Man]

This below from the link……...and those options are what exactly?
 
"Although Thai Law stipulates that a foreigner may not own land in Thailand, there are alternative options to owning a land in Thailand. We would be more than happy to discuss the options available to you with a meeting, an over the phone conversation, or by email".

Probably to set up a company that can own land... agree or disagree... accept the fact that legal people are paid to find loop holes which can be the options they are taking about

Sent from my Pixel using Thailand Forum - Thaivisa mobile app

[khunPer]

On 11/18/2018 at 1:33 PM, Neeranam said:

I see some nice houses around 15 million and think I could buy some land and build my own for much cheaper, any thoughts on this?

It's a rubber band, depending of how big a house you are talking about, and choice of materials.

If the land costs 5 million baht, you'll have 10 million baht left for everything else, in a 15 million baht budget. A pool and surroundings will be in the level 1.5 million to 2 million baht. A relative good quality house will cost you in the area of 25,000 baht to 30,000 baht a square meter, so for up to 8 million baht you can build about 250 to 300 square meters. If you choose more luxury – like marble bathrooms, and high-end brand name fittings; teak and slate, or sandstone floors; teak window frames and doors; expensive decoration tiles; etc. – your price could well be from 50,000 to 70,000 baht a square meter, leaving you with not much more than a 100 square meter house for the same price.

 

When seeing a turn-key house, there might be things in construction that you cannot easily spot, whilst when building your own house, you have a change to select everything yourself, and follow the construction in details. An already build house might have a nice make-up, but how will it be five years, or 10 years from now?

 

However, a building construction company may have some quantity discounts, that makes them able to build a house for a reasonable price, and still make a nice mark-up. A building construction company will also add a profit when quoting you, plus a percentage for unforeseen costs, so might not be that much of a difference. On the other hand, there could also be a big difference.

 

A second hand house that is already five years old, or 10 years old, should be cheaper than building a new house, but how much is depending of the level of maintenance. Location is also a major factor in pricing, chosing a different location often means a different price.

 

So if you think you can do it cheaper for a nice house, you need to think of what you might be able to get, for example for an average of 25,000 baht a square meter, and 20,000 baht, and 15,000 baht; and then compare that to the house prices you see, minus value of land.

????

[xylophone]

11 hours ago, KhaoYai said:

Not true.

 

Usufruct - if its registered at the Land Office and you use a lawyer to dot the i's and cross the t's, its fine and fully legal. 30 years max - the Thai courts have recently ruled that extension clauses are not legal.

 

Company Ownership - provided the company actually trades and has a reason to own property you can hold up to 49% of the shares in that company although some Land Offices will only accept 39%. The remaining shares must be Thai owened and the shareholders must comply with all the other requirements but if their shares do not hold voting rights, you control the company and therefore any property it owns.

 

Company ownership (genuine) is also the best route to take if you wish to pass your assets on to anyone when you die. You simply leave them your shares - no property taxes involved unless they decide to sell.

 

I am not a lawyer but the information above was given to me by a respected Thai lawyer - I believe it to be correct.

In the final analysis you don't own the land, you are just a minority shareholder in a company and it has to be a bone fide operating company, and the great majority of people who go down the company route do not have a true operating company...…...many threads and posts on this, but the law states that a foreigner cannot own land here (except in the 40 mil baht investment category) and that's really the end of it.

[Langsuan Man]

17 minutes ago, xylophone said:

In the final analysis you don't own the land, you are just a minority shareholder in a company and it has to be a bone fide operating company, and the great majority of people who go down the company route do not have a true operating company...…...many threads and posts on this, but the law states that a foreigner cannot own land here (except in the 40 mil baht investment category) and that's really the end of it.

The real final analysis is that many retirees in Thailand enjoy "occupying" a house rather than a condo.  Most are more interested in today than in the future.  Until there is an army of goons sent by the Thai government to come and confiscate our houses most of us sleep well at night knowing that will not happen

 

Posters here keep forgetting one salient point, the company route for "ownership" was set up for Thais, the foreigners have just utilized it's loophole to control property.  And really the bottom line is control which is much more valuable than ownership 

[BritManToo]

9 hours ago, khunPer said:

If the land costs 5 million baht, you'll have 10 million baht left for everything else, in a 15 million baht budget.

I'm happy enough in my 1.8Mbht house.

I don't even need the 3 bedrooms I have and there's a pool around the corner (40bht).

15Mbht seems 'excessive'.

[HHTel]

1 hour ago, xylophone said:

Usufruct - if its registered at the Land Office and you use a lawyer to dot the i's and cross the t's, its fine and fully legal. 30 years max - the Thai courts have recently ruled that extension clauses are not legal.

A Usufruct can be, and usually is, until death.  Extensions don't come into it.  With a usufruct you can operate as if you own the land (of course you don't) in that you can lease it to a 3rd party (30 years), even throw the true owner off the land.  A usufruct is quite a powerful document.

[xylophone]

1 hour ago, Langsuan Man said:

The real final analysis is that many retirees in Thailand enjoy "occupying" a house rather than a condo.  Most are more interested in today than in the future.  Until there is an army of goons sent by the Thai government to come and confiscate our houses most of us sleep well at night knowing that will not happen

Agree with the "occupying" aspect of your post if that is what does it for one.

 

There have been no "army of goons" (yet) sent to confiscate the properties lost by farangs, as wives, girlfriends, relatives and crooked lawyers are ready to do that job, as has already been demonstrated.

 

1 hour ago, Langsuan Man said:

Posters here keep forgetting one salient point, the company route for "ownership" was set up for Thais, the foreigners have just utilized it's loophole to control property.  And really the bottom line is control which is much more valuable than ownership 

I am a little confused with this comment...…...why would a Thai want a company "route" when they can own property by right of birth?

[xylophone]

49 minutes ago, HHTel said:

A Usufruct can be, and usually is, until death.  Extensions don't come into it.  With a usufruct you can operate as if you own the land (of course you don't) in that you can lease it to a 3rd party (30 years), even throw the true owner off the land.  A usufruct is quite a powerful document.

Not my post HH...…….

[Geordieabroad]

15 hours ago, Speedhump said:

A peppercorn means you pay a tiny amount for the lease. It doesn't have anything to do with the length of the lease. 

A lease is a lease, varying number of years, A "PEPPERCORN" LEASE MEANS 999 YEARS

[Langsuan Man]

21 minutes ago, xylophone said:

Agree with the "occupying" aspect of your post if that is what does it for one.

 

There have been no "army of goons" (yet) sent to confiscate the properties lost by farangs, as wives, girlfriends, relatives and crooked lawyers are ready to do that job, as has already been demonstrated.

 

I am a little confused with this comment...…...why would a Thai want a company "route" when they can own property by right of birth?

Avoiding personal income taxes, immediate transfer of assets without Land Office input, hiding assets from wives and relatives, the list is quite large 

[Geordieabroad]

On 11/18/2018 at 7:57 PM, Peterw42 said:

The term freehold lease doesn't make much sense. Its usually freehold which is outright ownership or leasehold which is renting. I think the term freehold lease is presenting a long lease (10, 20, 30 year) as being as good as, the same as, ownership. Implying that you own the lease and can sell it.

A creative real estate marketing term which basically means "for rent" with maybe a possibility of on-selling the lease. (The lease would need to have a "can be sublet and transferred" clause).

There's no such thing as a freehold lease, the term is freehold and means outright ownership as opposed to leasehold (the clue's in the wording) which means there's a lease with a stipulated number of years involved

 

[Peterw42]

8 minutes ago, Geordieabroad said:

There's no such thing as a freehold lease, the term is freehold and means outright ownership as opposed to leasehold (the clue's in the wording) which means there's a lease with a stipulated number of years involved

 

I think I just said that, lol

 

 

[Geordieabroad]

7 minutes ago, Peterw42 said:

I think I just said that, lol

 

 

Really??? re-read your post.

I am quoting you "i think the term freehold lease is presenting a long lease (10, 20, 30 year}

I'll say it one more time, there's no such thing as a freehold lease.

[Peterw42]

1 minute ago, Geordieabroad said:

Really??? re-read your post.

I am quoting you "i think the term freehold lease is presenting a long lease (10, 20, 30 year}

I'll say it one more time, there's no such thing as a freehold lease.

Yes, there is no such thing but it doesnt stop real estate agents using the term. I explained about freehold and leasehold and explained that its a "made up" real estate term. They "present" a long lease and "imply" it means ownership.

 

I didnt say there was such a thing as a freehold lease, I explained how real estate agents have made up the term.

I'll say it one more time its a made up real estate term.

[Geordieabroad]

27 minutes ago, Peterw42 said:

Yes, there is no such thing but it doesnt stop real estate agents using the term. I explained about freehold and leasehold and explained that its a "made up" real estate term. They "present" a long lease and "imply" it means ownership.

 

I didnt say there was such a thing as a freehold lease, I explained how real estate agents have made up the term.

I'll say it one more time its a made up real estate term.

If you had even the most basic knowledge of the subject we could debate this further, as you obviously don't, i'll just leave it there.

[Speedhump]

1 hour ago, Geordieabroad said:

A lease is a lease, varying number of years, A "PEPPERCORN" LEASE MEANS 999 YEARS

I'd like you to show me legal definition of 'peppercorn lease' or did you make it up. A peppercorn is a very small payment, not a period of time (as in a peppercorn rent, which is living in rented accommodation for almost nothing).