A positive story about buying a house in Thailand

[BangkokReady]

4 hours ago, WhatsNext said:

72 million

What kind of a house can you get for that?  That would buy you a nice house in a nice location in the UK.  Is it some sort of mansion?

[WhatsNext]

3 minutes ago, BangkokReady said:

What kind of a house can you get for that?  That would buy you a nice house in a nice location in the UK.  Is it some sort of mansion?

Here it is : LINK 

I wasn't that impressed by it actually, for that sort of money you can get a nice big villa almost everywhere on the planet. 

 

A friend of mine owns 2 of the smaller ones, each about 40M but he is loaded with capital letters. The project is very nice though. Also at this moment there is a villa being build in Jomtien on the Dongtan beach for 285M baht (!)

[Tanomazu]

Looks gorgeous. But for 72 million  you can build a Bel Air type place in Ko Samui.

[Gecko123]

17 minutes ago, Brick Top said:

A couple of things that you might have overlooked and I am talking from experience.

In 2004 , I also did a similar thing to what you described , I had a house built in Phuket that cost at the time 17 Million , the value now is around 35 Million. My laywer set up the Thai company in exactly the same way as you described. The problem was my relationship with the TGF ended in 2012 when she ran off with a younger Australian man and moved to Australia with him.

When I tried to sell my house in 2015 , I couldn't as she was a 49% shareholder and her the signed copy of her ID and signed copies of share transfer certificates were deemed useless as her Thai ID card date had expired in 2008. I have no idea of were she is and to date I still can not sell the house until she is found and gives a new signed copy of her ID card. 

Another problem also arose when the DBD investigated my Thai company in 2016 and demanded to see proof of were the ex TGF got the money from to hold 49% of the shares in my Thai company. That investigation is also still ongoing and causing me a lot if stress , I have been told it is illegal to hold a house this way and the DBD are threatening to take me to court about the way I formed a Thai company to buy a house , it is totally illegal they have warned me.

I think the OP may be kidding himself. From the land office's viewpoint (based on how things were left when you registered the property) the Thai lawyer, the OP's girlfriend, and (LOL) her mother owned the property.

 

Does the OP seriously think he will be able to waltz into the land office with a superseding agreement which gives him - a foreigner - full ownership of the property? Does he seriously think that at the very least the lawyer, his girlfriend and (again, LOL) her mother will need to fully cooperate in order to execute any future sale of the property? Does the OP have any idea of how long this would be tied up in court if any of the above parties fail to fully cooperate, and even if he is successful in court, how protracted the enforcement process can be? Does the OP realize that he may have given third-parties a de-facto 51%, and possibly 100% interest in a 6.1 MM baht property purchased with non-marital assets?

 

The problems with buying land in Thailand mostly come when you try to get your money out. OP obviously thinks he has it all figured out, but I have serious doubts. In answer to the OP's dismissing the possibility that the Thai government wouldn't dare audit and possibly force fire sale of properties in violation of land law because of all the havoc it would cause...who cares about havoc if windfall profits are to be had, and nationalistic and populous sentiments can be fanned in the process?

 

God bless, and I honestly hope it all works out, but I'd say it's a little early for feel-good Pied-Pipering.

[2ndhomepattaya]

"You are of course 100% right, however i have capital invested already and this was money sitting on a bank with -0.5% interest. It was dead capital to start with, i don't want everything on the stock market. "

 

Great post mate and thanks for sharing.

I too looked at buying property when I first moved to Pattaya as this is something I got used to in the UK over the years, ownership  mean. And yes, have stocks and shares and done this spiel too.

However, when I did my sums it did not stack up when I realised that in my home country I can freely buy and sell at my leisure without jumping through hoops. And the capital appreciation aside I get some 5% net income on the rental front, each apartment rented long term with a minimum of 3.5 years contract a pop. This rental income is also tax free as the pension income in my home country is well below my tax free amount. Again no trickery needed. And if I don't like my neighbours here or feel need a change I can just cancel the agreement and move on.

Hope it works out for you but there is far too many unknowns for me to feel comfortable owning here.

[JBChiangRai]

I can see one issue with the way you have constructed your company.

 

Your TGF can call a general meeting, the business being to remove you as a director, your TGF and her mother vote you out and then vote your TGF as sole director.  You've then lost your company and home.

[WhatsNext]

3 minutes ago, JBChiangRai said:

I can see one issue with the way you have constructed your company.

 

Your TGF can call a general meeting, the business being to remove you as a director, your TGF and her mother vote you out and then vote your TGF as sole director.  You've then lost your company and home.

They don't have any votes

[WhatsNext]

23 minutes ago, Gecko123 said:

 

Does the OP seriously think he will be able to waltz into the land office with a superseding agreement which gives him - a foreigner - full ownership of the property? Does he seriously think that at the very least the lawyer, his girlfriend and (again, LOL) her mother will need to fully cooperate in order to execute any future sale of the property? 

You misunderstood my explanation, there is no further trips to the land office. Plus read up on the matter in 874 other threads before you reach wrong conclusions

[WhatsNext]

17 minutes ago, 2ndhomepattaya said:

"

Hope it works out for you but there is far too many unknowns for me to feel comfortable owning here.

If you feel better renting, then by all means do so and thanks

[sanuk711]

10 minutes ago, JBChiangRai said:

can see one issue with the way you have constructed your company.

 

Your TGF can call a general meeting, the business being to remove you as a director, your TGF and her mother vote you out and then vote your TGF as sole director.  You've then lost your company and home.

I think that thread has been done to death JBChaingRaai.... There non voting shares + he would hold a undated resignation latter from each of them.

[Gecko123]

6 minutes ago, WhatsNext said:

You misunderstood my explanation, there is no further trips to the land office. Plus read up on the matter in 874 other threads before you reach wrong conclusions

Correct me if I'm wrong, but you will certainly have to go back to the land office if you ever try to sell the property, will you not?

[WhatsNext]

1 minute ago, Gecko123 said:

Correct me if I'm wrong, but you will certainly have to go back to the land office if you ever try to sell the property, will you not?

No, you just sell the company, or rather my part with the 100% voting rights. The house is on the company that doesn't change. No need for the land office.

[BumGun]

2 hours ago, WhatsNext said:

If you want to see everything negative because you made another decision than mine and want to feel superior about it, all hail to you. 

I also don't understand how you view this as "positive,"  It's a gamble, the least of which is sovereign risk as a non resident or citizen and nearly no legal rights , if when you unfortunately pass nothing has chnaged, it might be a gamble you were happy with, lets hope anyway.

 

You say the capital was held in a bank account and you didn't want it in the stock market, presumably because you are somewhat risk averse ? but you literally detail how you commit fraud (submitting fake company documents)  and you don't own the asset, which should set of all sorts of alarm bells.  If you don't want the cash in the stock market (and i put it to you if you own Bank Of America,  CostCo or Apple to pick 3, and they go bankrupt then the planet is in trouble and if you'd be sitting on an enormous gain right now) ,

 

Other alternatives might be were you could have purchased another house in your home country, rented that out and used the rent to take a long term lease here in Thailand AND had security of tenure as a citizen, unless you're from Ethiopia or some such place ?

 

It's ok to detail your experience but to label it "positive" seems a little bizarre ?

 

[jazzdog32095]

4 hours ago, spidermike007 said:

Good post. Sounds like you did your homework. Who knows where the housing market will go here, but single family residences seem to appreciate more than condos, as a general rule here, and the demand seems to be higher. 

It is all about opportunity costs. I leave that 6.1M in my investment account and in 8 years it has more than doubled to 12.5M. Home appreciation adjusted for inflation in Pattaya averaged 1.9 % between 2009-2020. Even discounting the effects of Covid and based on history 7M is an optimistic sale price in 8 years, a loss of 2.5M after allowances for rent and upkeep. Other issues:

- Should you have issues with GF and Mom your 49% transformed to 100% is likely illegal.

- Illiquidity

- 40K per month today rents you a property valued between 10-18M @Hipflat

- Futures uncertain and the end is always near

- Let it roll baby roll

 

4 hours ago, spidermike007 said:

Good post. Sounds like you did your homework. Who knows where the housing market will go here, but single family residences seem to appreciate more than condos, as a general rule here, and the demand seems to be higher. 

 

[tomazbodner]

OK, so OP is CEO of his company, which he owns 100%. First of all, CEO requires a work permit, which requires 4/7 Thai employees and registered capital of 2 million Baht per each work permit.

 

What the OP is really doing is using nominees to fully control the company. This is illegal.

 

Section 36 (foreign business act) 'A Thai national or juristic person that assists a foreigner in avoiding the Foreign Business Act by means of holding shares as a nominee or being a nominal owner of the company, shall (including the foreigner allowing Thai nationals or juristic persons to do so) be liable for a fine of 100,000 to 1,000,000 Baht and/ or imprisonment of up to three years'.

[khunPer]

A few comments to the company limited-method.

 

A better option might sometimes be to let a company own the land only, while the house is owned by the foreigner, which is possible and legal.

 

Be aware that Thai shareholders can be asked to document that they have funds to obtain their shares, proxy/nominee shareholders are illegal. If you gift a wife or girlfriend to buy shares, the gift is in principle income taxable.

 

Having a less familiar Thai as owner of the 2 percent might be a better option than having 51 percent, which in worst case scenario, can vote against the foreigner; voting majority by preferred shares to a foreigner is not the intention of the law, but it has to my knowledge so far not been tested in a court. Power of attorney for votes to a foreigner are not legal anymore; i.e. proxy/nominee shareholders are illegal. Some suggests to let 3 percent be the preferred shares, which pays a guaranteed annual dividend of for example 4 percent of the registered 3-percent share capital in return for no voting rights; then the foreigner has 49 percent shares and votes, and Thai individual(s) 48 percent shares with voting rights.

 

A minor child can also be shareholder under guardianship.

 

An often used trick when registering property to a company limited is to reduce foreign shareholders to under 30 percent ownership of the total shares, when registering property at the land office, and thereafter transfer another up to 19 percent of the total shares back to the foreigner.

 

To separate a house from the land it needs to be new build, and the architect drawings must include the house owner's name; the building permission must be in the house owner's name; and to obtain the building permissin the house owner needs a superficies servitude, or similar document, from the land owner; finally all payments to building contracter(s) shall be made by the house owner. These points are important, as they are the first house-owner's documentation of ownership.

 

The land is leased from the company for up to 30 years, and a lease sum is going to be paid to the company; the company needs income as it has running cost to accountant and auditor to deliver the annual reports and tax statements. The best is, if the company also includes other activities than being an empty shell for foreign property ownership; the latter is in principle illegal. For a lease agreement running a longer period than 3 years to be legal, it shall be registered at the land office, and tax for the whole lease-period shall be paid; i.e. the land title deed might have two servitudes, an up to 30-years lease, and a separate ownership of the house on the leased land. Land and house can be sold individually; for example can the house be sold, and shares of the company transferred without transferring the land.

 

When selling property, income tax shall be paid, the sum is dependent of use - for example home or business - and lengths of use. The company land for lease might be regarded as business, and therefore business tax applies, same for the newer annual property tax. The house can be separated as home for a lower taxation, if the owner lives in the house, i.e. has a yellow house book; however, if having permanent residency permission the owner will be listed in the blue house book. The new annual property tax will not apply for a building registered as home, if the appraised value is under 10 milion baht.

 

If the house is not separated ownership, my property specialist lawyer mentioned that a loan could be made from the "house owner" to the property owner on a value of the building - or any value of total property higher than the registered company capital - and registered in the land office as servitude, like an mortgage. Nothing can be sold, or transferred, without the full mortgage sum, and eventual agreed interest, has been paid.

????

[khunPer]

4 minutes ago, tomazbodner said:

OK, so OP is CEO of his company, which he owns 100%. First of all, CEO requires a work permit, which requires 4/7 Thai employees and registered capital of 2 million Baht per each work permit.

No, not anymore, if the functions are limited to board member like overall decisions, and no physical work as for example a managing director...????

 

Nominee shareholders is another, too often overlooked point...????

[JBChiangRai]

27 minutes ago, sanuk711 said:

I think that thread has been done to death JBChaingRaai.... There non voting shares + he would hold a undated resignation latter from each of them.

I think you mean undated share transfer form, one of the problems with undated documents is they needs a copy of their ID card, ID cards expire in under 7 years.

 

In any event, he can appoint more Thai Directors who sign at the land office to sell the house out of the company if he wants to sell it.  Land Offices don’t much like Farang involvement in Land/Houses.

[khunPer]

A comment about property ownership vs. renting.

 

If you have decided to be a long term resident in Land of Smiles - preferably after testing it for a while - then approximately 15 years of rent often equals what you shall invest in similar kind of property and location, including interest and maintenance.

 

The point being, that after around 15 years you have "not invested more than you can afford to lose in Thailand", as you would already have paid the sum in rent; so  OP is very right in his view of buying, instead of renting.

 

In some cases the period might be a few years shorter, and in other cases some years longer, depending on property a market prices for renting/leasing.

 

In other words, after the approximately 15 years are your costs to live in the property you "own" - one or other way - is down to maintenance costs, i.e. it's not free, especially as some things last less due to weather, wear and quality, than in many of our home countries, but it's often not more expensive than renting, rather a little cheaper; and as owner you have the benefit of freedom to do whatever you wish with the property.

 

In some cases you might be able to sell and get your funds back, remembering that in Thailand it's the land that increase in value, while buildings normally decrease in value.

 

Don't look at property in Thailand as "investment" - you might too easily bee disappointed - but be happy if you can get your "invested money" back - eventual adjusted for inflation, for example increasing with the consumer price index - that's what I'm counting with, and will be happy with, if I ever sell "my dream house in paradise"...????

[sanuk711]

14 minutes ago, JBChiangRai said:

I think you mean undated share transfer form, one of the problems with undated documents is they needs a copy of their ID card, ID cards expire in under 7 years.

 

In any event, he can appoint more Thai Directors who sign at the land office to sell the house out of the company if he wants to sell it.  Land Offices don’t much like Farang involvement in Land/Houses.

1/ Then you get a new copy after 6 years or use the Resignation letter to replace them.

2/ Lawyers usually attend the land office for company sales.

 

I am sure given time you can think up some more negatives....... just remember to pay your rent on time and move out when instructed...........

[Tanomazu]

7 minutes ago, khunPer said:

A comment about property ownership vs. renting.

 

If you have decided to be a long term resident in Land of Smiles - preferably after testing it for a while - then approximately 15 years of rent often equals what you shall invest in similar kind of property and location, including interest and maintenance.

 

The point being, that after around 15 years you have "not invested more than you can afford to lose in Thailand", as you would already have paid the sum in rent; so  OP is very right in his view of buying, instead of renting.

 

In some cases the period might be a few years shorter, and in other cases some years longer, depending on property a market prices for renting/leasing.

 

In other words, after the approximately 15 years are your costs to live in the property you "own" - one or other way - is down to maintenance costs, i.e. it's not free, especially as some things last less due to weather, wear and quality, than in many of our home countries, but it's often not more expensive than renting, rather a little cheaper; and as owner you have the benefit of freedom to do whatever you wish with the property.

 

In some cases you might be able to sell and get your funds back, remembering that in Thailand it's the land that increase in value, while buildings normally decrease in value.

 

Don't look at property in Thailand as "investment" - you might too easily bee disappointed - but be happy if you can get your "invested money" back - eventual adjusted for inflation, for example increasing with the consumer price index - that's what I'm counting with, and will be happy with, if I ever sell "my dream house in paradise"...????

On top there are other considerations, if you own you can never be told to vacate, you can put in substantial changes to your liking. I've had very good landlords in LOS but of course there is always a possibility they can tell you to get out.

[WhatsNext]

Ok gentlemen, i am not going to react on the company structure any more, some here mention fraud, illegal and probably criminal soon. This is the standard company structure, if you want to discuss this there are 938 other threads about it. Many of you feel the need for some ownership here, many don't. If you don't all fine, but don't pretend you know everything and are a master in Thai Law. You want to accuse me of fraud, be my guest it doesn't matter what you think, all that matters is that this is the way it has been here for many many years. Compare it with the prostitution, there is none in Thailand according to the rules, zero nothing !

 

Every year they parade up and down walking street and proclaim proudly that there is none, go figure. The same is true about housing, no farang own a house ! But they do. In the end the government or a judge can dissolve all those companies in the blink of an eye, and i would have to look for another solution, sure and 100% true. The chances of that happening however are very very slim, and if they do it's lease. 

 

So that's my last word on that, but of course ill be happy to react to anything else and i thank those that write positive comments, have questions or provide economic insights in their own situation or how they see my decision, all greatly appreciated 

[JustAnotherHun]

I wish you a good time with and in your new home.

But I can't see what's new about the story. The different ways to "own" a house in Thailand are well known and all of them bypass Thai law.

The only way to live stress free that way is to be aware of that fact and never to invest more than you can afford to leave behind from one moment to the other.

[WhatsNext]

51 minutes ago, jazzdog32095 said:

 

- 40K per month today rents you a property valued between 10-18M @Hipflat

 

Sadly that isn't true, the house i was renting before for 40k was about 8 million with everything included. If i could rent an 18M property for 40k i'd be doing that instead. Of course i am not including condo's as i am not interested in those. 

[Tanomazu]

A thread like this where the company ownership option is clearly described by someone who has done it, with other expert advice by people who have built in Thailand is very helpful.

 

It's also very good news to see that it can be a positive experience devoid of the nigthmares you see on the web.

 

I am considering doing this myself, so thanks.

[rumak]

2 hours ago, Brick Top said:

A couple of things that you might have overlooked and I am talking from experience.

In 2004 , I also did a similar thing to what you described , I had a house built in Phuket that cost at the time 17 Million , the value now is around 35 Million. My laywer set up the Thai company in exactly the same way as you described. The problem was my relationship with the TGF ended in 2012 when she ran off with a younger Australian man and moved to Australia with him.

When I tried to sell my house in 2015 , I couldn't as she was a 49% shareholder and her the signed copy of her ID and signed copies of share transfer certificates were deemed useless as her Thai ID card date had expired in 2008. I have no idea of were she is and to date I still can not sell the house until she is found and gives a new signed copy of her ID card. 

Another problem also arose when the DBD investigated my Thai company in 2016 and demanded to see proof of were the ex TGF got the money from to hold 49% of the shares in my Thai company. That investigation is also still ongoing and causing me a lot if stress , I have been told it is illegal to hold a house this way and the DBD are threatening to take me to court about the way I formed a Thai company to buy a house , it is totally illegal they have warned me.

YEP,  those are a few of the things that can go wrong.    I (who have been here many years) would not suggest the "business"  route to anyone.    The OP got a lot of "likes"  for his "positive post" .....

I do not think those posters know the pitfalls.

Almost ANY way in which a foreigner invests money in land or a house will not have an easy out IF the guy has problems with his lady.     There are exceptions, of course.  The guys who were fortunate enough to find an honest and long time sincere lady.  

Like all things in life........ things can change,  and with "love" ,   very often do.

[EVENKEEL]

A house is worth what someone is willing to pay. You can say my house is worth 100 Million tbh but until some one antes up, it's not.

[JBChiangRai]

30 minutes ago, sanuk711 said:

1/ Then you get a new copy after 6 years or use the Resignation letter to replace them.

2/ Lawyers usually attend the land office for company sales.

 

I am sure given time you can think up some more negatives....... just remember to pay your rent on time and move out when instructed...........

Actually, I don’t rent.  My company builds houses for resale between 10M and 33M in Chiang Rai. We are very successful.

 

I don’t own the company, my Thai daughter does.  I only trust 2 types of love, my daughters are one and my dogs are the other.  DBD wouldn’t accept my dogs as shareholders.

[Stevemercer]

Congratulations to the OP for turning his dream into reality.

 

I am one of those who chose buying in my Thai wife's name rather then renting. If the worst came to the worst, and my my life in Thailand became impossible, I guess I could walk away. I wouldn't have much left, but enough to at least get a new start on a new life.

 

As many posters imply, a lot depends on trust between you and your Thai partner. You can do the best you can to protect your own interests, but if you have a vindictive ex who wants to ruin your life then you do run a risk. But this would be true in any country, not just Thailand. Sure, in Thailand a foreigner can't buy an iron-clad land title like in your home country. But in Thailand the divorce laws are much easier to work around.

 

At the end of the day, I do not really worry that I do not own my land or house. I think my wife and I will stay happily married. If not, I think we can make an amiable property settlement. If we can't, I would like to think we will have to negotiate a fair and legal financial divorce settlement. If we can't I think I can apply pressure through her family who are reputable. If that doesn't work, I guess I will have to start somewhere else.

 

But things would have to be disastrous for all the above chain of events to come true. So I'm not going to worry about it.

[fredscats]

Renting  40K? high rent there,half that price

 

  I like the litmus test...offer a third off the asking price (finished house)...straight back on market at reduced accepted  price......no takers, but offered a third off the new asking price by another punter...and so on...