Buying a new house with Thai girlfriend

[digger70]

8 hours ago, GalaxyMan said:

This is the kind of information I'm looking for. I had thought of this, but was looking for some confirmation, maybe some details about how the process works. Thanks.

On paper you can own the house but you can't own the land it is built on. to make sure don't invest in anything in Thailand that you can't afford to lose /walk away from .

[johng]

Yes the boyfriend has no legal rights....she has the mortgage in her name, he makes the mortgage payments...she then has an incentive to keep the boyfriend happy so he keeps paying the mortgage, if after 20-30 years they are still together she gets the house in her name and can throw him out on the street yes true but normally a "gold digger" wants a quick result not to wait 20 years so probably after 20 years together things would be fine IMHO

[GalaxyMan]

3 minutes ago, digger70 said:

On paper you can own the house but you can't own the land it is built on. to make sure don't invest in anything in Thailand that you can't afford to lose /walk away from .

I'd say that was a given no matter where you are. Investing, gambling, is there a difference?

 

It seems to me that splitting the house from the land, putting the land in her name and getting a lifetime usufruct for me on the house will be the most logical way to go, all things considered.

[BritManToo]

45 minutes ago, cyberfarang said:

Being in debt is a civil, not a criminal offence. Can`t get blood out of a stone. If the loan stops being paid and the relationship turns sour, under the Thai civil law system it can take years to have a someone evicted from a property and even if they lose the case can still appeal that can take more years.

But you haven't lost 2.5Mbht, only a fraction of it.

[BritManToo]

6 minutes ago, GalaxyMan said:

It seems to me that splitting the house from the land, putting the land in her name and getting a lifetime usufruct for me on the house will be the most logical way to go, all things considered.

A building company won't do that.

It's a custom build option only.

[jvs]

12 minutes ago, GalaxyMan said:

I'd say that was a given no matter where you are. Investing, gambling, is there a difference?

 

It seems to me that splitting the house from the land, putting the land in her name and getting a lifetime usufruct for me on the house will be the most logical way to go, all things considered.

You will need a lifetime usefruct on the whole property to be safe.

If she is capable of buying the property with her money/income in her name then why do you want part of it?

I just don't get that.

[Brayka]

As a farang you can start a company, BUT, 51% of the shares must be in hands of Thai people. AND a sleeping company is not tolerated by the law, the police did started intensive control of that all over the country.

You can put the house on your name by a lawyer,  IF you prove the money to buy it is yours. Make it then 50/50 with your girl, and nobody can take your house away from you.

In my eyes the only legal way!

 

[cyberfarang]

20 minutes ago, GalaxyMan said:

Exactly! As in my original post, WE are buying the house. She is a very well-paid professional and has no problem getting total financing. She is concerned about protecting my share because she is aware of the way Thailand protects itself from foreign real estate domination.

So who`s buying the land the house sit`s on? It is possible for a Farang to buy a house under certain circumstances but not the land in normal circumstances.

 

All I can add is, I`m glad it`s your money and not mine. Wouldn`t touch it with a barge pole. If you have that amount of money to lose if the crap hits the fan or you`ll willing to take the risk thinking; what could possibly go wrong? Then wishing you all best.  Up to you.

 

 

[GalaxyMan]

4 minutes ago, jvs said:

You will need a lifetime usefruct on the whole property to be safe.

If she is capable of buying the property with her money/income in her name then why do you want part of it?

I just don't get that.

WE are buying it, equally. I don't need her help or vice versa, but sometimes pride...And if something should happen to her, I'd be covered.

[stud858]

7 hours ago, Langsuan Man said:

Your impression is wrong.  It is called diluting shares so you insure that NO ONE PERSON has 50%.  The normal dilution would be four shareholders with 3 having 17% and you having 49%, thus insuring that you have a majority of voting shares and are made Chairman 

 

  

And that voting right ratios are changed  also otherwise 3 x 17 out votes 1 x 49.

 

An oz friend of mine bought a house with his wife. The land office insured his name was on the title for some sort of protection. Like she couldn't kick him out and sell it unless he signed. It seems like new protections in place for farang

[GalaxyMan]

8 Usufruct

Usufruct contract refers to the agreement and the right to use or occupy another's real property for a term up to 30 years but in any case not exceeding the life of the person granted the right of usufruct. A right of usufruct in Thailand gives the right to use and manage a real estate property during a person’s natural life. The right in the real estate property exists so long as the usufructuary (the holder of the usufruct right) is alive. After his or her death the real estate property reverts back to the owner. Often a usufruct is given to a family member such as a foreign spouse with the idea that the foreign spouse is protected in the event of death of the Thai spouse (owner).

A usufructuary is not allowed to sell the property (this right remains with the registered owner of the property) and under sections 1417 to 1428 of the Civil and Commercial Code the usufructuary has the obligation to maintain the property and take normal care of the property. If the usufructuary fails to do so and the property would lose value or becomes in a poor state of repair the owner has the right to terminate the right of usufruct. The usufructuary is liable for loss of value or destruction of the property unless he can proof that damages are not caused by his fault. The creation of a usufruct could in certain circumstances be an effective option to protect a foreign spouse during his marriage in Thailand and upon death of his or her Thai spouse, however in some case a usufruct is not the best option.

 

9 Superficies

Right of superficies (sections 1410 to 1416 of the Thailand Civil and Commercial Code) in Thailand is a civil law real estate right. A right of superficies legally separates ownership over the land from anything on the land. The right of superficies must be registered on the land title deed to be complete and enforceable. A superficies can be registered as a separate right or as a supporting right (i.e. in combination with a land lease agreement). The person in the agreement granted the right of superficies obtains ownership over the building he builds upon the land without obtaining or having ownership rights in the lands. Registration of a right of superficies will be allowed before construction or during the construction of a building, but an existing building requires transfer of ownership (and payment of transfer tax) first.

 

[cyberfarang]

1 minute ago, GalaxyMan said:

WE are buying it, equally. I don't need her help or vice versa, but sometimes pride...And if something should happen to her, I'd be covered.

You may be buying it equally, but you can`t own it equally.

[cyberfarang]

1 minute ago, GalaxyMan said:

8 Usufruct

 

Usufruct contract refers to the agreement and the right to use or occupy another's real property for a term up to 30 years but in any case not exceeding the life of the person granted the right of usufruct. A right of usufruct in Thailand gives the right to use and manage a real estate property during a person’s natural life. The right in the real estate property exists so long as the usufructuary (the holder of the usufruct right) is alive. After his or her death the real estate property reverts back to the owner. Often a usufruct is given to a family member such as a foreign spouse with the idea that the foreign spouse is protected in the event of death of the Thai spouse (owner).

 

A usufructuary is not allowed to sell the property (this right remains with the registered owner of the property) and under sections 1417 to 1428 of the Civil and Commercial Code the usufructuary has the obligation to maintain the property and take normal care of the property. If the usufructuary fails to do so and the property would lose value or becomes in a poor state of repair the owner has the right to terminate the right of usufruct. The usufructuary is liable for loss of value or destruction of the property unless he can proof that damages are not caused by his fault. The creation of a usufruct could in certain circumstances be an effective option to protect a foreign spouse during his marriage in Thailand and upon death of his or her Thai spouse, however in some case a usufruct is not the best option.

 

 

 

9 Superficies

 

Right of superficies (sections 1410 to 1416 of the Thailand Civil and Commercial Code) in Thailand is a civil law real estate right. A right of superficies legally separates ownership over the land from anything on the land. The right of superficies must be registered on the land title deed to be complete and enforceable. A superficies can be registered as a separate right or as a supporting right (i.e. in combination with a land lease agreement). The person in the agreement granted the right of superficies obtains ownership over the building he builds upon the land without obtaining or having ownership rights in the lands. Registration of a right of superficies will be allowed before construction or during the construction of a building, but an existing building requires transfer of ownership (and payment of transfer tax) first.

 

 

 

My last words on this subject.

 

Glad this gives you confidence, so just go ahead.

[natway09]

We have properties in my wife's name. The house land I have leased for 30/30 & have registered it. That will see me out & then it will be hers.If both should die together then the will will 

take care of it

[stud858]

4 minutes ago, natway09 said:

We have properties in my wife's name. The house land I have leased for 30/30 & have registered it. That will see me out & then it will be hers.If both should die together then the will will 

take care of it

Curious about how your organising will and ensuring it's correct execution.  

[HHTel]

7 hours ago, NanLaew said:

7 hours ago, NanLaew said:

as I understand one cannot set up a legal usufruct with your spouse.

Yes you can.  Once a usufruct is registered with the Land Office it becomes a legal right and one spouse cannot cancel it without the other's consent.  Registering a usufruct is at the discretion of the Land Office so they can refuse to register it.

 

[khunPer]

11 hours ago, GalaxyMan said:

...this is NOT a topic about trust between me and my girlfriend, I'm looking for technical information about ownership options, especially in light of the latest crackdown on dummy companies to hide ownership.

When not married, and with your girlfriend as buyer, the house, including the land under it – presume it's freehold and not a lease – will be her property. As the house is already under construction, it might be too late to separate the house and the land, as a foreigner can own a house, but not the land under it; however the building permission need to be issued in the foreigner's name, and preferably together with a "superficies".

 

However, you have an option of "usufruct" that could grant you the right to use the land & house for up to 30-years, or for your lifetime (which might be longer than 30 years).

 

If you were married at the time of signing the sales documents, you would be 50% owner in case of divorce; i.e. the property should be sold, and half of the outcome paid to you.

 

The company limited option, that others have mentioned, is a possibility; however it's not as simple today, as it was before, and the annual running costs for a company limited at Samui would be in the level of 30,000 baht or more. I know that price is relative, and 2.8 million baht can be a relative high price, but might not be worth forming a company for.

To form a Thai company limited you'll need a minimum of 3 shareholders, and Thai nationals shall own not less than 51% of the company's shares; i.e. a foreigner cannot own more than 49% of the company. You cannot use nominee shareholders today, so the 51% Thai shareholders, which you shall find yourself, will need to show proof of the money they invest in the company limited. Normally the minimum nominal shareholder capital would be 1 million baht. Formation and registration costs of a company limited will be in the level between 40,000 and 50,000 at Koh Samui.

 

If you own 49% of the shares, some Thais owns "your company" and thereby "your house". You can gain control over the company by using so-called "preferred shares", either where 10% of the total number of shares have 10 votes instead of 1 vote – and you own that 10% of the shares – and thereby can control the total votes; or where 3% of the shares have a guaranteed dividend of for example 4% of the nominal value in return of being shares with no voting rights, and that Thai shareholders own these 3% of the total shares, leaving you with 49% of the votes, and Thai owners with 48% of the votes plus 3% without voting rights.

 

You would lease the property from the company limited, and you would need to pay a lease to the company limited – the company limited will also have expenses to accountant, auditor, annual tax statement, and to pay some small business tax – but the company limited could also borrow some of the money from you to buy the property; i.e. 1 million shareholder capital and property priced at 2.8 million baht. Your loan to the company limited could be registered at the land office on the title deed as a servitude, like a mortgage, mening that the property cannot be sold without the debt (loan and interest) is fully paid.

 

Using a company limited for a foreigner's ownership of property is not the intention of the law, and you could risk scrutinizing. However, a performing company with other activities than just owning a land and house is a legal set-up; but you need to consider the costs compared to a 2.8 million baht investment (which is cheap after Samui-standard).

 

You might be able to have a loan registered on the property title deed, even the deed is in you girlfriend's name only. Check with an experienced local real-estate solicitor, as it's a question of what the land office will accept, they work little different from province to province. I have not used the loan-method on Koh Samui, however local lawyers here had mentioned the possibility. The registered loan protects you from that the property can be sold or transferred (change owner) without you are fully reimbursed from any outstanding debt.

????

[baansgr]

7 hours ago, NanLaew said:

Absolutely 100% correct.

 

Usufructs do have an exotic-sounding name but properly set up, they are robust, legal protections that do not give the Thai partner 'the upper hand' in any way at all. The old-school way of forming a company isn't exotic weird or unusual considering this is Thailand but their robustness under legal scrutiny is very questionable.

Usufruct only gives protection to stay in the property.... Its of no value if the OP wants to sell and recoup his money... If the relationship goes sour,  will he really want to stay there if she moves the outlaws in and makes his life hell.  They really are just a fictional mind soother that are worthless for most

[Cricky]

5 hours ago, AlexRich said:

6 hours ago, BritManToo said:

Get your gf to take out a home loan for 2.5M over 30 years.

You pay the deposit (300k) and the repayments (16k/month).

 

Then if anything goes wrong, you no longer need to make any repayments.

 

Banks tend to loan to high earners. If his girlfriend does not earn much no Bank will loan to her without a guarantor ... and that will be the farang.

2.5M over 30 years

 

I think the local street sweeper on minimum wage would be eligible for this loan.

[davidst01]

13 hours ago, ezzra said:

Word to the wise, unless you have formed a company that own the house where's your name appear as a major share holder you stand a chance to claim part ownership on the house when things will turn sour, ( like they do most of the times) otherwise, once the house is on the wife/GF name this is it, you have no rights what so ever...

simply solution is to be married before buying it in her name. divorce and you get 50% each. thus you are wrong saying 'you have no rights whats so ever...'

[xylophone]

2 hours ago, khunPer said:

When not married, and with your girlfriend as buyer, the house, including the land under it – presume it's freehold and not a lease – will be her property. As the house is already under construction, it might be too late to separate the house and the land, as a foreigner can own a house, but not the land under it; however the building permission need to be issued in the foreigner's name, and preferably together with a "superficies".

 

However, you have an option of "usufruct" that could grant you the right to use the land & house for up to 30-years, or for your lifetime (which might be longer than 30 years).

 

If you were married at the time of signing the sales documents, you would be 50% owner in case of divorce; i.e. the property should be sold, and half of the outcome paid to you.

 

The company limited option, that others have mentioned, is a possibility; however it's not as simple today, as it was before, and the annual running costs for a company limited at Samui would be in the level of 30,000 baht or more. I know that price is relative, and 2.8 million baht can be a relative high price, but might not be worth forming a company for.

To form a Thai company limited you'll need a minimum of 3 shareholders, and Thai nationals shall own not less than 51% of the company's shares; i.e. a foreigner cannot own more than 49% of the company. You cannot use nominee shareholders today, so the 51% Thai shareholders, which you shall find yourself, will need to show proof of the money they invest in the company limited. Normally the minimum nominal shareholder capital would be 1 million baht. Formation and registration costs of a company limited will be in the level between 40,000 and 50,000 at Koh Samui.

 

If you own 49% of the shares, some Thais owns "your company" and thereby "your house". You can gain control over the company by using so-called "preferred shares", either where 10% of the total number of shares have 10 votes instead of 1 vote – and you own that 10% of the shares – and thereby can control the total votes; or where 3% of the shares have a guaranteed dividend of for example 4% of the nominal value in return of being shares with no voting rights, and that Thai shareholders own these 3% of the total shares, leaving you with 49% of the votes, and Thai owners with 48% of the votes plus 3% without voting rights.

 

You would lease the property from the company limited, and you would need to pay a lease to the company limited – the company limited will also have expenses to accountant, auditor, annual tax statement, and to pay some small business tax – but the company limited could also borrow some of the money from you to buy the property; i.e. 1 million shareholder capital and property priced at 2.8 million baht. Your loan to the company limited could be registered at the land office on the title deed as a servitude, like a mortgage, mening that the property cannot be sold without the debt (loan and interest) is fully paid.

 

Using a company limited for a foreigner's ownership of property is not the intention of the law, and you could risk scrutinizing. However, a performing company with other activities than just owning a land and house is a legal set-up; but you need to consider the costs compared to a 2.8 million baht investment (which is cheap after Samui-standard).

 

You might be able to have a loan registered on the property title deed, even the deed is in you girlfriend's name only. Check with an experienced local real-estate solicitor, as it's a question of what the land office will accept, they work little different from province to province. I have not used the loan-method on Koh Samui, however local lawyers here had mentioned the possibility. The registered loan protects you from that the property can be sold or transferred (change owner) without you are fully reimbursed from any outstanding debt.

????

Note to the original poster..............be careful of this avenue because the company that needs to be formed to "make this work" has to be a bone fide operating company, producing something, paying tax and dividends to the shareholders; not set up with the sole purpose of acquiring property/land.

 

In addition the shareholders have to invest their own funds or show from whence these came and be liable for them, so where do you find these Thai people who are willing to invest their own funds (even if borrowed from a bank) in what is really a company set up to help you buy property/land. In effect the Thai shareholders will be liable for around 1.4 m baht, and if there is no real operating company, how do they access their funds if they want out?

 

Completely different if you have a true operating company producing a turnover, paying tax, has audited accounts and so on, and paying dividends to shareholders, even then you own nothing but a minority share of a so called company, not actually owning the land, so outside of that, do you really want to take that risk, or go through the bother/hassle of setting up a real company, whose shareholders really hold the key.

 

Anyway, looking back at the posts, you say that you want to stay within the law and investigate the usufruct option and I think that is a wise decision.

 

The look of despair on my friend's face when he lost his villa and retirement savings when going down this route stays with me, that is why I am so against these schemes dreamed up to circumvent the law.

 

 

[The Old Bull]

Three things first get married it gives you more rights. Second get your name on as much paper as possible. Third get your hand on the title deed and lock it up.Then you will at least get back 50,% of it goes sour, that is the best you can expect.

[Fairynuff]

16 hours ago, ezzra said:

Do as many foreigners are doing when it comes to buying a house/land, set up a company where by you have equal shares and said company owns the property, you'll a lawyer to help you with all the formalities, if you're in Pattaya i can recommend you such person...

Except of course that setting up a company to buy a house isn’t exactly legal

[madmen]

Forget the house and buy a condo in your name. You can thank me later

[soistalker]

Buying off plan in Thailand is exceedingly stupid.

[Serl]

 

My friend sold his house in Thai company name and was shocked by all taxes.  So it looks like buying in Company name is not a good option. 

 

After reading pros/cons about building, buying a house in Thailand,  I have decided to rent.  I guess my Thai gf will very happy ???? and love me more ????

 

[Travel Dude]

The company road for the sole purpise of owning a house is illegal. You can do it but if government seriously enforces the rules you will be in trouble. 

The correct way to go is:

1) Engage a reliable lawyer

2) Get DUE DILIGENCE done by the lawyer. This is a must cause there are any possible unpleasant surprises.

3) Buy in name of your girlfriend (transaction 1 at land department)  and (transaction 2 at land department after a couple of days) lease it back from her for a period of 30 years with promises of 2 more further extension after 30 years + stipulate that if you sell the lease owner has the obligation to issue a new 30 years lease to buyer.  

Good luck! 

[musicscene]

You could split the purchase between house and land. Your g/f will own the land giving you a long lease for the land and you own the house built on the land. That way you are covered.

[baansgr]

58 minutes ago, musicscene said:

You could split the purchase between house and land. Your g/f will own the land giving you a long lease for the land and you own the house built on the land. That way you are covered.

Houses are worthless without the land they are built on. Try selling it. 

[baansgr]

11 hours ago, The Old Bull said:

Three things first get married it gives you more rights. Second get your name on as much paper as possible. Third get your hand on the title deed and lock it up.Then you will at least get back 50,% of it goes sour, that is the best you can expect.

Chanotes are easy to replace,  she just files a police report and presents it at the land office making the one he's holding worthless. Thai law and the court will award him 50% in divorce  but she can sell at anytime and getting blood out of a stone didn't work.  All these ideas on this thread are meaningless. Hard truth is you can't have control over land here so be prepared to loose it.