Home Ownership

[garyinthailand]

I'm presently here on 30-day stamp. My good friends have offered me an attractive deal on a townhouse, and I'd live to go ahead and acquire it. I'm not very clear on the practical options or how to execute the deal.

1) I understand that farang can own buildings. Is this straightforward? Is there any special paperwork or requirements? Do I need to be on a longer-term visa when I do this?

2) For the land, I've heard of two options. One is a long-term lease, the other to form a company. What are the advantages and disadvantages of each, and what's the legal procedure in each case?

Thanks. My sellers are very good friends, and they'll work with me as needed to make this happen.

[astral]

How long have you been here?

You sound like the newly arrived farang about to be plucked??

Are your "good friends" Thai or farang?

You can own a building, not the land it stands on.

You can lease the land for 30 years

A lawyer can set up a company to own the land & townhouse

in your name.

1) Set up company under your name- 40% your and 60% thai (to 6 other people each only owning 10% each), leaving you the majority share holder. Only you can sign for the company, as the MD!!

2) The 6 people then sign the shares over to you, undated letters!!

3) Buy the property under the thai company . You can then rent the house from your company for a peppercorn rent.(thus being the purpose of my company...to collect the rent)

The company route is the safest, in my opinion.

However remember the Golden Rule.

Do not invest more in Thailand than you are prepared to walk away from!!

[Sunbelt Asia]

1) I understand that farang can own buildings. Is this straightforward?

Yes

"Is there any special paperwork or requirements? "

Transfer of a building, as distinct from its land, requires the posting of 30 days public notice. You just register such transfer of ownership into your name at the local district office.

"Do I need to be on a longer-term visa when I do this?"

No

"heard of two options. One is a long-term lease, the other to form a company. What are the advantages and disadvantages of each, and what's the legal procedure in each case?"

The lease is limited to 30 years but the lease extensions can be additional 30 years. Possession of the land leased for an already owned building is protected by the fact that the building rests on the land; ownership of the building is separate from the land and cannot be seized by the lessor once the lease expires. Leases exceeding three years are enforceable for only three years unless they are registered with the Land Department. Therefore, a 30-year lease must be registered with the Land department. In addition, a lease continues to be valid even in the event the property on the land is sold. Disadvantage is when you die, your lease cannot be transferred.

Purchasing property with a limited liability company is the most popular method for foreign investors as the Articles of Association can be varied to allow greater protection for foreign minority shareholders having more voting rights as well as you being the Managing Director. Disadvantage is you must file a audit every year and the company must have trading in 5 years hence you should rent the land from your company and own the home.

The most important step is to do a land title search, Find out what type of title deed your friends have and if they own the land and building free and clear.

Our company does this type of work and welcomes the opportunity to do it for you.

www.sunbeltasia.com

[dr_Pat_Pong]

and in all fairness, it is an expensive way to go. Do your homework.

[Sunbelt Asia]

it is an expensive way to go

I surmise Doctor, you mean the Limited Co. ? Just depends if its more expensive. If you lose the land for your children then the company shares were cheaper.

The 30 year lease makes sense too for some people and some clients go that route as well.

Just depends and hence your advice of doing your homework is good advice.

Our fee on a Land title search is 6,500 Baht. For company registration it is 3,900 and tax id and corp id is 3,000 Baht. It's not the initial fee on our side that is expensive, the annual filing and tax is a pain but most still favor it over a lease that one day will expire. By the way, legal on a Lease is 9,500 Baht.

The final choice is the clients which path to take.

www.sunbeltasia.com

[PvtDick]

Are your "good friends" Thai or farang?

I'm not sure which would be worse!

[dr_Pat_Pong]

it is an expensive way to go

I surmise Doctor, you mean the Limited Co. ? Just depends if its more expensive. If you lose the land for your children then the company shares were cheaper.

The 30 year lease makes sense too for some people and some clients go that route as well.

Just depends and hence your advice of doing your homework is good advice.

Our fee on a Land title search is 6,500 Baht. For company registration it is 3,900 and tax id and corp id is 3,000 Baht. It's not the initial fee on our side that is expensive, the annual filing and tax is a pain but most still favor it over a lease that one day will expire. By the way, legal on a Lease is 9,500 Baht.

The final choice is the clients which path to take.

www.sunbeltasia.com

The ongoing fees and audit costs are really what I mean. If a company is well set up, it has to be a much better way to go than the lease arrangements. Should the company do more ' business ' other than just own the land, to satisfy prying government eyes ?

[astral]

The ongoing fees and audit costs are really what I mean. If a company is well set up, it has to be a much better way to go than the lease arrangements.

Ongoing fees should be no more than 15,000 baht a year.

A small price for peace of mind!!

[Sunbelt Asia]

Should the company do more ' business ' other than just own the land, to satisfy prying government eyes ?

Yes. To add weight to your comment that they should do more than just own land ...several years ago several Thai companies sold land and made a huge profit. It came to be that 49% of the shares of these Thai companies were owned by foreigners and a outcry of how foreigners could make a profit on Thai land? Laws were passed that the Land department was to investigate a Thai company if more than 39% of the shares were owned by a foreigner and to check if the company was created to circumvent the laws of land ownership. If they found this to be the case, the Thai government could confiscate the land. Recently this law was relaxed back to 49% share ownership but nothing is to say, that in the future that laws will be passed for over 39% to be investigated aqain or even lower. If the company is trading in a normal course than the burden of proof has been satisfied that the Thai company was not set up solely for land ownership. At the very minimum, if no trading was taking place, the company should get income by renting out the land and pay taxes.

However their are thousands of companies that just own land and that is it. They could be playing with fire if no income is coming in.

www.sunbeltasia.com

[dr_Pat_Pong]

it is an expensive way to go

I surmise Doctor, you mean the Limited Co. ? Just depends if its more expensive. If you lose the land for your children then the company shares were cheaper.

The 30 year lease makes sense too for some people and some clients go that route as well.

Just depends and hence your advice of doing your homework is good advice.

Our fee on a Land title search is 6,500 Baht. For company registration it is 3,900 and tax id and corp id is 3,000 Baht. It's not the initial fee on our side that is expensive, the annual filing and tax is a pain but most still favor it over a lease that one day will expire. By the way, legal on a Lease is 9,500 Baht.

The final choice is the clients which path to take.

www.sunbeltasia.com

The ongoing fees and audit costs are really what I mean. If a company is well set up, it has to be a much better way to go than the lease arrangements. Should the company do more ' business ' other than just own the land, to satisfy prying government eyes ?

As I said

[bangkokblue]

Almost all of my long term expat friends and close associtates are in favour of the company route or wish they had taken it for one reason or other, So i personally would side with experience.

[halfpast_2]

i very recently looked into forming a company and buying a home with a law company in Bkk, i believed everything that i was advised by them and ended up losing money.

my advise is do as much research before going ahead with any of the options. i am aware that a great deal of farang own homes this way but i am for now going to continue renting until 100% on the right way to go.