Buying Land And House Usufruct Style

[sabajja]

Hi !

I'm wondering if someone could piece together if this is possible.

After reading thru plenty of posts regarding foreign owner ship, I don't want to go on the "Company bandwagon".

Instead Usufruct seems more attractive.

Situation:

I find this nice little house (already built) and land, far away from any tourist areas. (In Krabi).

Land and house owned by Thai family.

I do not have any Thai relatives (spouse etc).

Can I purchase this property with a Usufruct, or would me suggesting such an proposition scare the Thais away ?

If possible, how would we setup such an agreement in an easy way, so

that I can use the property (or sell) without legal hassles down the road ?

I assume I have to get a "Foreign Exchange Transaction Form" from the Thaibank once my transfer has gone thru, specifying it's for house purchase.

Reason being, if I sell the property, I wanna be able to transfer my funds back.

Any comments would be appreciated, thanks.

[LoveDaBlues]

Foreigners cannot own property in Thailand; how can you sell something you can't own?

[sabajja]

I was thinking, with a Usufruct setup in a proper manner, I could still reap similar benifits as being the owner, right or wrong ?

Perhaps somebody could clearify what i'm entitled to do (and not do) with such an agreement.

And offcourse, help me with my scenario above.

I understand the land would never belong to me, but that wouldn't matter as long as I have the right to use the premises with legal rights.

If I one day decided I didn't wanna stay, what would my options be

with a Usufruct ?

(If it can be done at all that is)

Edited February 17, 2007 by sabajja

[LoveDaBlues]

If I one day decided I didn't wanna stay, what would my options be

with a Usufruct ?

You could lease the property to someone else.

[sabajja]

Perhaps Usufruct should only be used when you have a Thai partner ?

Sorry for not being an property law genius.

Maybe I should lease the land (30+30 year) and buy the house instead ?

I'm sure i'm gonna need a good lawyer anyway, just thought I check out the

pitfalls first, and what's the best solution for me.

[Arkady]

You have the right to sublet the property if you are the usufructary. If you have signed a lifetime usufruct agreement, you can let in on a 30 year lease any time. The owners theoretically have to honour this, even if you die within the 30 year sub-lease but they would no doubt find a way to get him out, if they wanted to.

[scotsman]

If you could get the thai family to grant you a usufruct when you buy the property the land would still be owned by the thai family and that could be dangerous to your health if they wanted the land back. You could never sell the land as its not yours. You can lease it for 30 years or you can live in it for the rest of your life if the usufruct is for life. I would say that the use of a usufruct for property is only a good idea if its with a Thai person you trust. The bottom line is that its not your land you cant own it or sell it without the permission of the Thai owner you have the usufruct with. I would ask a good solicitor before you do anything.

[sabajja]

Ok, thanks.

[dsfbrit]

I 'own' land through the company route and have spent the last months looking at all the options to move the land to my Thai wife.

I wont bother you with all the details, but unless you have a Thai wife - I would not consider the Usufruct option at all.

In fact if I were you - I would not 'buy' land here at all.

If you must own some property in Thailand - its nice to own something - then get a condo in your own name - nice and legal - and make sure its part of the legal 49 percent farang ownership.

Good luck

[CTM]

I really don't understand why so many foreigners insist on “buying” a house and land in Thailand. YOU CAN NOT OWN AND ARE JUST PISSING YOUR MONEY DOWN THE TOILET! At some point you will be screwed out of your investment, it is almost guaranteed. I don't see the benefit for the huge amount of risk and hassle. Thailand is not America. Fancy legalese and lawyer tricks will come back to bite you someday.

How many farangs have you met would stayed in one place in Thailand for 30 years? That is about how long the rent-to-own cost ratio typically is. Plus you now are responsible for upkeep, taxes, and such. Unless it is in a very very good location, it is also difficult to sell a used home in Thailand.

Why would you pay the full purchase price for something knowing it will revert back to the original owner in the future? How is this a good “investment”?

If a usufruct is for the life of the usufructary, I for one would not sleep well at night knowing my passing is a multi million baht jackpot to some Thai.

[RAZZELL]

I really don't understand why so many foreigners insist on “buying” a house and land in Thailand. YOU CAN NOT OWN AND ARE JUST PISSING YOUR MONEY DOWN THE TOILET!

I'm sure there are many "farang" developers in Phuket or Samui who beg to differ

RAZZ

[Arkady]

I really don't understand why so many foreigners insist on “buying” a house and land in Thailand. YOU CAN NOT OWN AND ARE JUST PISSING YOUR MONEY DOWN THE TOILET! At some point you will be screwed out of your investment, it is almost guaranteed. I don't see the benefit for the huge amount of risk and hassle. Thailand is not America. Fancy legalese and lawyer tricks will come back to bite you someday.

How many farangs have you met would stayed in one place in Thailand for 30 years? That is about how long the rent-to-own cost ratio typically is. Plus you now are responsible for upkeep, taxes, and such. Unless it is in a very very good location, it is also difficult to sell a used home in Thailand.

Why would you pay the full purchase price for something knowing it will revert back to the original owner in the future? How is this a good “investment”?

If a usufruct is for the life of the usufructary, I for one would not sleep well at night knowing my passing is a multi million baht jackpot to some Thai.

I think it can only really make sense for some one buying in the name of a Thai wife but wanting a bit of added security which may or may not be effective if they break up. Even better if you have Thai kids who can hopefully inherit from your wife, if she does blow it or give it to a Thai man after you've gone. Otherwise I would tend to agree, unless it is really a tiny part of your assets and you don't care that your heirs will not get it. If you are only Thailand part of the year a condo makes more sense. You can sell it any time and don't need to worry so much about theft or bills not being paid as the management usually pays utilities and gets you to reimburse. Best of all, put the cash in a property or shares of an investment property company in the West or in Thailand. Once capital controls have gone you can put your B20 million in a commercial property REIT listed in Thailand and get 6% dividend yield and also be protected against broad rises in Thai property prices and a rise in the baht. So B20 million invested will allow you to rent a place for B100k a month. I have looked at rents but I expect you can get a decent place in most resorts for that and let the landlord pay for repairs. Owning property is a different financial proposition where you can get a mortgage and prices are going up in a liquid market. If you buy a REIT, you get the benefit of the leverage through their bank borrowings and they don't pay tax.

[Naam]

I really don't understand why so many foreigners insist on “buying” a house and land in Thailand. YOU CAN NOT OWN AND ARE JUST PISSING YOUR MONEY DOWN THE TOILET! At some point you will be screwed out of your investment, it is almost guaranteed.

please tell us in details what problem you have with those/us who are "pissing their money down the toilet". does it make you sad? do you have to work harder because of our behaviour? are you afraid you might have to support us when we run out of property and money?

[Geppis72]

I really don't understand why so many foreigners insist on “buying” a house and land in Thailand. YOU CAN NOT OWN AND ARE JUST PISSING YOUR MONEY DOWN THE TOILET! At some point you will be screwed out of your investment, it is almost guaranteed.

please tell us in details what problem you have with those/us who are "pissing their money down the toilet". does it make you sad? do you have to work harder because of our behaviour? are you afraid you might have to support us when we run out of property and money?

Dr Naam do not waste yr valuable time with it.

They do not even imagine that when they come in our Countries

without a job we support them with public house given for free,

school for their children given for free, Medical assistance given for free..

I do not think I must go head right ??

Ohps sorry I forgot to mention, all above is paid out of our salaries and our tax.

Here instead you bring money to invest and buy and doing and give know how

and give jobs AND they want kick you out ,

but nobody tell you what's the benefit for them ....

Cheers

[CTM]

I really don't understand why so many foreigners insist on “buying” a house and land in Thailand. YOU CAN NOT OWN AND ARE JUST PISSING YOUR MONEY DOWN THE TOILET! At some point you will be screwed out of your investment, it is almost guaranteed. I don't see the benefit for the huge amount of risk and hassle. Thailand is not America. Fancy legalese and lawyer tricks will come back to bite you someday.

How many farangs have you met would stayed in one place in Thailand for 30 years? That is about how long the rent-to-own cost ratio typically is. Plus you now are responsible for upkeep, taxes, and such. Unless it is in a very very good location, it is also difficult to sell a used home in Thailand.

Why would you pay the full purchase price for something knowing it will revert back to the original owner in the future? How is this a good “investment”?

If a usufruct is for the life of the usufructary, I for one would not sleep well at night knowing my passing is a multi million baht jackpot to some Thai.

I think it can only really make sense for some one buying in the name of a Thai wife but wanting a bit of added security which may or may not be effective if they break up. Even better if you have Thai kids who can hopefully inherit from your wife, if she does blow it or give it to a Thai man after you've gone. Otherwise I would tend to agree, unless it is really a tiny part of your assets and you don't care that your heirs will not get it. If you are only Thailand part of the year a condo makes more sense. You can sell it any time and don't need to worry so much about theft or bills not being paid as the management usually pays utilities and gets you to reimburse. Best of all, put the cash in a property or shares of an investment property company in the West or in Thailand. Once capital controls have gone you can put your B20 million in a commercial property REIT listed in Thailand and get 6% dividend yield and also be protected against broad rises in Thai property prices and a rise in the baht. So B20 million invested will allow you to rent a place for B100k a month. I have looked at rents but I expect you can get a decent place in most resorts for that and let the landlord pay for repairs. Owning property is a different financial proposition where you can get a mortgage and prices are going up in a liquid market. If you buy a REIT, you get the benefit of the leverage through their bank borrowings and they don't pay tax.

Chaiyo, at least one person "gets it" and has thought it through instead of thinking with his little head.

To Dr. Naam: I don't care what you do with your money. Really, I don't. Go ahead and buy your "tii rak" from the bar who you've know a whole 3 months and "loves you too much" a B20 million baht McMansion. I just tire of you guys not thinking and then down the road sulking back to farangland with stories of how "evil" and "horrible" all Thai people are. Even worse you stay in Thailand and irritate the rest of us with your sob stories.

To RAZZELL: Yes, other foreigners making a living selling real estate to fellow foreigners are the best place to go for unbiased advice. Do you follow current events at all? (I know some foreigners in Thai real estate give good advice, but if that is you then you also know a lot of your fellow industry players are fly-by-night weasels.)

[backflip]

" I just tire of you guys not thinking and then down the road sulking back to farangland with stories of how "evil" and "horrible" all Thai people are. Even worse you stay in Thailand and irritate the rest of us with your sob stories."

Strangely, it's the farangs who HAVEN'T bought property who are complaining. Those who haven't purchased property are those with the stories of impending doom. Us farangs who have bought property are happy with our choices. Unfortunately, you don't share our happiness.

[tinman]

Hi !

I'm wondering if someone could piece together if this is possible.

After reading thru plenty of posts regarding foreign owner ship, I don't want to go on the "Company bandwagon".

Instead Usufruct seems more attractive.

Situation:

I find this nice little house (already built) and land, far away from any tourist areas. (In Krabi).

Land and house owned by Thai family.

I do not have any Thai relatives (spouse etc).

Can I purchase this property with a Usufruct, or would me suggesting such an proposition scare the Thais away ?

If possible, how would we setup such an agreement in an easy way, so

that I can use the property (or sell) without legal hassles down the road ?

I assume I have to get a "Foreign Exchange Transaction Form" from the Thaibank once my transfer has gone thru, specifying it's for house purchase.

Reason being, if I sell the property, I wanna be able to transfer my funds back.

Any comments would be appreciated, thanks.

hi sabajja,

i am considering the same and will be arriving in krabi in a couple of days,would like to meet up and would love to hear any more pointers/ideas on buying/leaseing a place.

[tinman]

Hi !

I'm wondering if someone could piece together if this is possible.

After reading thru plenty of posts regarding foreign owner ship, I don't want to go on the "Company bandwagon".

Instead Usufruct seems more attractive.

Situation:

I find this nice little house (already built) and land, far away from any tourist areas. (In Krabi).

Land and house owned by Thai family.

I do not have any Thai relatives (spouse etc).

Can I purchase this property with a Usufruct, or would me suggesting such an proposition scare the Thais away ?

If possible, how would we setup such an agreement in an easy way, so

that I can use the property (or sell) without legal hassles down the road ?

I assume I have to get a "Foreign Exchange Transaction Form" from the Thaibank once my transfer has gone thru, specifying it's for house purchase.

Reason being, if I sell the property, I wanna be able to transfer my funds back.

Any comments would be appreciated, thanks.

hi again sabajja,

i will be at gooddream guest house in krabi town just down from the post office,will be there should be thursday,just ask for david,need all the advice poss.regards