Property buying question

[Keith5588]

I understand that as a foreigner I cannot own land in Thailand.
Let's assume I buy a detached house.

So I buy the house freehold but need to lease the land. Is this correct?

 

Normally a lease is for 30 years. What happens when the 30 year land lease expires?

This is really puzzling me, I would still own the house freehold but have no right for the house to be on the land.

 

Thanks in advance
Keith
 

[ThailandRyan]

After the first 30 year Leasehold is up another 30 year leasehold is available for you, of course there is the cost of the leasehold needing to be paid for the first 30 year leasehold when you buy the residence and then the amount paid again for the 2nd 30 years, which might be an increase.  You might also need to pay Monthly CAMO fees or twice a year CAMO fees.

[banglay]

Another option is to buy in a company name ....  lots will boo who this route ..but lots also swear by it ,, just do your re-search and get a reputable  lawyer/agent

[Keith5588]

9 minutes ago, ThailandRyan said:

After the first 30 year Leasehold is up another 30 year leasehold is available for you, of course there is the cost of the leasehold needing to be paid for the first 30 year leasehold when you buy the residence and then the amount paid again for the 2nd 30 years, which might be an increase.  You might also need to pay Monthly CAMO fees or twice a year CAMO fees.

Thanks but I read that another 30 year lease is not guaranteed?

I also know someone who took a 30 year land lease about 15 years ago. The Thai land owner wants him gone so I do not think another 30 year lease will be offered.

[Lucky Bones]

3 minutes ago, banglay said:

Another option is to buy in a company name ....  lots will boo who this route ..but lots also swear by it ,, just do your re-search and get a reputable  lawyer/agent

Naled it.

Company and agent.

Well said.

 

[freedomnow]

11 minutes ago, Lucky Bones said:

Naled it.

Company and agent.

Well said.

 

Does that not involve minimum employees/pensions and all the rest if you mean forming company only to buy prop ?

[ThailandRyan]

13 minutes ago, freedomnow said:

Does that not involve minimum employees/pensions and all the rest if you mean forming company only to buy prop ?

It does, and incurs registration, fees, and voting issues.  Many of the companies have been found to be nothing more than a shell and folks have lost out.  

 

As far as a leasehold the first 30 years is golden, the second 30 can be done if agreed upon with no issues

 

https://www.thailand-realestate.com/thailand-property/leasehold

The Leasehold system is defined as a system of property tenure where a person, by paying a fixed sum, acquires the right to occupy a particular land or building for a given period of time. Since Thai law prohibits foreigners from owning land within the country, leasehold has become a very popular alternative to direct ownership. Furthermore, Thai law limits the period of any lease agreement to thirty years only and any excess period will be reduced. The following features of leasehold have made it one of the most popular forms of property tenure: first, leasehold is a relatively stable arrangement as lease periods usually last for years sometimes even decades and second, both then lessor and the lessee share responsibility for the damages incurred on the property unless the law designates a specific party liable. Nonetheless, leasehold is still limited compared to that of absolute ownership. Mere possession is conferred in favor of the tenant.

 

https://www.thailand-property.com/blog/thailand-leasehold-property-ever-makes-sense-lease

Alternatively, Thailand leasehold property can be a much easier and straightforward arrangement for foreigners wishing to acquire a villa or house. Leases are good for 30 years and can be renewed as long as both parties agree. More importantly, the lease remains valid until its stated duration regardless of if the land is sold or something else unforeseen occurs.

 

A leasehold is an interest in property whereby the leaseholder does not actually own the property but is granted the right of "exclusive possession" and use of the property. 

A long-term leasehold contract is not just a contractual agreement, it is also a registrable legal interest against the freehold title document. Once registered, the lease on Thailand real-estate becomes a lien upon the title deed. As a legal interest, it also means the lease can be bought, sold, and transferred.

The right to possession and use is for a specified period of time in return for the payment of consideration and the terms are recorded in a "lease agreement" contract. On real-estate in Thailand, it's possible to take a leasehold interest over any type of property such as land, apartments, condominiums, townhomes, or villas.

So what is a leasehold in Thailand? The current legal maximum period stipulated for a leasehold is 30 years in Thailand. This relatively short period specified by Thailand real-estate law for leasehold property has therefore led to the creation of contractual leasehold arrangements designed to "extend" the lease term. Land offices in Thailand refuse to register leases for more than 30 years, although they do allow private agreements to contain lease "renewals". 

Edited July 8, 2022 by ThailandRyan

[Keith5588]

6 minutes ago, ThailandRyan said:

It does, and incurs registration, fees, and voting issues.  Many of the companies have been found to be nothing more than a shell and folks have lost out.  

 

As far as a leasehold the first 30 years is golden, the second 30 can be done if agreed upon with no issues

 

https://www.thailand-realestate.com/thailand-property/leasehold

The Leasehold system is defined as a system of property tenure where a person, by paying a fixed sum, acquires the right to occupy a particular land or building for a given period of time. Since Thai law prohibits foreigners from owning land within the country, leasehold has become a very popular alternative to direct ownership. Furthermore, Thai law limits the period of any lease agreement to thirty years only and any excess period will be reduced. The following features of leasehold have made it one of the most popular forms of property tenure: first, leasehold is a relatively stable arrangement as lease periods usually last for years sometimes even decades and second, both then lessor and the lessee share responsibility for the damages incurred on the property unless the law designates a specific party liable. Nonetheless, leasehold is still limited compared to that of absolute ownership. Mere possession is conferred in favor of the tenant.

 

https://www.thailand-property.com/blog/thailand-leasehold-property-ever-makes-sense-lease

Alternatively, Thailand leasehold property can be a much easier and straightforward arrangement for foreigners wishing to acquire a villa or house. Leases are good for 30 years and can be renewed as long as both parties agree. More importantly, the lease remains valid until its stated duration regardless of if the land is sold or something else unforeseen occurs.

Thanks.

So at the end of the 30 year land lease assuming that the Thai land owner does not wish to enter into another 30 year land lease.

What is the position of the foreigner?

 

He cannot remain occupying the land so I assume that he has to leave his house?

If on very bad terms with the Thai land owner and no agreement can be made the foreigner could demolish his house. It would be a drastic thing to do and with no gain for himself.

 

So basically at the end of the first 30 year land lease if it is not renewed then the foreigner also loses the house? 

 

[freedomnow]

6 minutes ago, Keith5588 said:

Thanks.

So at the end of the 30 year land lease assuming that the Thai land owner does not wish to enter into another 30 year land lease.

What is the position of the foreigner?

 

He cannot remain occupying the land so I assume that he has to leave his house?

If on very bad terms with the Thai land owner and no agreement can be made the foreigner could demolish his house. It would be a drastic thing to do and with no gain for himself.

 

So basically at the end of the first 30 year land lease if it is not renewed then the foreigner also loses the house? 

 

This is usufruct, right ?

I'd not touch it with a bargepole here...the owner and local govt. cabals extorting your position in some manner after you sink money on the house.

 

R.E.N.T....least you can move easily if the landscape changes....new karaoke/metal grinder next door.

Edited July 8, 2022 by freedomnow

[Lucky Bones]

1 hour ago, freedomnow said:

Does that not involve minimum employees/pensions and all the rest if you mean forming company only to buy prop ?

No it doesn't. Get a good agent.

Protect yourself from Somchai.

[ThailandRyan]

2 minutes ago, Lucky Bones said:

No it doesn't. Get a good agent.

Protect yourself from Somchai.

Protect yourself from Somchai really? So a registered lease at the Land office is not protecting yourself....hmmm

https://www.siam-legal.com/realestate/Leases.php

The lease term of a real properties in Thailand can either be fixed or periodic. A lease agreement will usually guarantee the initial 30-year lease term. A foreigner can safely acquire the right to use the land and register the right for a maximum of 30-year lease at the Land Department.

Section 540 of the Civil and Commercial Code provides that the duration of a hire of immovable property cannot exceed thirty (30) years. If it is made for a longer period, such a period is to be reduced to thirty (30) years. However, the 30-year period may be renewed, but the renewal must be made prior to the expiration of the lease term.

[Lucky Bones]

5 minutes ago, ThailandRyan said:

Protect yourself from Somchai really? So a registered lease at the Land office is not protecting yourself....hmmm

https://www.siam-legal.com/realestate/Leases.php

The lease term of a real properties in Thailand can either be fixed or periodic. A lease agreement will usually guarantee the initial 30-year lease term. A foreigner can safely acquire the right to use the land and register the right for a maximum of 30-year lease at the Land Department.

Section 540 of the Civil and Commercial Code provides that the duration of a hire of immovable property cannot exceed thirty (30) years. If it is made for a longer period, such a period is to be reduced to thirty (30) years. However, the 30-year period may be renewed, but the renewal must be made prior to the expiration of the lease term.

You would have to be the most negative person on the earth.

Good luck in your continued negativity.

[blackcab]

The first thing to understand is that title to the structure of the house and title to the land are normally the same thing. This is because when you own chanote-titled land in Thailand you own everything on it. This is the same in many countries. There is very little freehold/leasehold of houses and land in Thailand, although it can be done.

 

If a piece of land has an existing house or structure on it then it is going to be difficult to split the title for the structure away from the title of the land. If, however, you build a house or structure from new then there is much more chance of separating the title.

 

However, even if you build a new house you still need the land owner's permission to put your newly built property on their land, so you end up in the position of needing a lease or a usufruct.

 

A residential lease can be for a maximum of 30 years. After this period you have no rights to an extension unless the land owner agrees. A lessor can give a lessee a contract of any length or duration, however a residential contract longer than 30 years will not be valid if anyone tries to enforce it in Court. This is because a contract, even if entered into willingly by both parties, cannot supercede statute law.

 

What happens after 30 years? If your lease is for 30 years then you either leave the property under the terms of the lease, or you try to renegotiate a further lease. A new lease will of course involve payment of further sums of money. Another way of viewing a lease is paying all of your rent in advance in one go.

 

If you have a contract for a 30+30 year lease then if the owner of the land is content you can just keep living on the land. However if the land owner wants you to vacate then things could get a little messy as ultimately the law will be on the land owners side. Consider that the original owner may sell the land to another party before the 30 years has expired, or more commonly, the original lessor dies and their beneficiaries now own the land. The beneficiaries may wish to sell the land at full market value, which would mean they would not agree to another lease, or that they would not honour the original 30+30 year contract. In Thai law, they are certainly not bound to honour the +30 part of the contract.

 

Another option is to have a usufruct for the duration of your life over the land and everything on the land including any buildings. With a usufruct for life you have the right to occupy, improve and use the land in a non-destructive way until you die. Understand though that with a usufruct you do not own the land. The land will have to belong to someone else, and when you die the encumbrance will be removed and the owner can take possession of the land and anything on it.

 

A third way is to own the land through a limited company. This option has downsides and upsides. It can work well, or if you involve the wrong people you can lose everything. Buyer beware with this one.

 

[ThailandRyan]

23 minutes ago, Lucky Bones said:

You would have to be the most negative person on the earth.

Good luck in your continued negativity.

Negative, please explain how.  You made a snide comment about protecting yourself from somchai.  A leasehold does exactly that.

[freedomnow]

39 minutes ago, Lucky Bones said:

No it doesn't. Get a good agent.

Protect yourself from Somchai.

Over the long-term I just guess these shell company property ownership paths could have issues to be dealt with $$$$.

[KIngsofisaan]

Give this some thought?

 

30 years in, the owner of the land may die and pass the land on to his kids.

 

His kids may see a "free" house for themselves in the future and NOT renew the lease.

 

They could sell the land and house and split the money.

 

When free money is involved, watch out.

 

No one can predict what will happen in 30 years.

 

This is Thailand, remember that if a choice between you extending the lease or someone getting a free house, they will take your house 99% of the time.

[ThailandRyan]

6 minutes ago, KIngsofisaan said:

Give this some thought?

 

30 years in, the owner of the land may die and pass the land on to his kids.

 

His kids may see a "free" house for themselves in the future and NOT renew the lease.

 

They could sell the land and house and split the money.

 

When free money is involved, watch out.

 

No one can predict what will happen in 30 years.

 

This is Thailand, remember that if a choice between you extending the lease or someone getting a free house, they will take your house 99% of the time.

This could be true for a house built on a piece of property you like, but I really doubt large gated Moobans where the properties are all leaseholds would go through what you describe if the property developer is also the owner of the land as a limited company which is family owned and incorporated.  Many developments like that are leasehold only and allow for the owner of the house to sell the house and a new owner to obtain a new 30 year lease.  Of course there are rip offs everywhere in the world. I have a property in Mexico that has a 99 year lease on it which my kids and other family members use.  

Edited July 8, 2022 by ThailandRyan

[KIngsofisaan]

8 minutes ago, ThailandRyan said:

This could be true for a house built on a piece of property you like, but I really doubt large gated Moobans where the properties are all leaseholds would go through what you describe if the property developer is also the owner of the land as a limited company which is family owned and incorporated.  Many developments like that are leasehold only and allow for the owner of the house to sell the house and a new owner to obtain a new 30 year lease.  Of course there are rip offs everywhere in the world. I have a property in Mexico that has a 99 year lease on it which my kids and other family members use.  

If you think you are safe making financial decisions in Thailand now based on what will happen in 30 years, good luck.

[ThailandRyan]

1 minute ago, KIngsofisaan said:

If you think you are safe making financial decisions in Thailand now based on what will happen in 30 years, good luck.

Same goes for a marriage here as well..........life is short, how many will still be around at the end of a 30 year leasehold if they retire here at 60 or 65. Rent payments after 10 years will equal the payment one makes for the house and leasehold.  The next 20 are free in essence.

Edited July 8, 2022 by ThailandRyan

[Keith5588]

47 minutes ago, blackcab said:

The first thing to understand is that title to the structure of the house and title to the land are normally the same thing. This is because when you own chanote-titled land in Thailand you own everything on it. This is the same in many countries. There is very little freehold/leasehold of houses and land in Thailand, although it can be done.

 

If a piece of land has an existing house or structure on it then it is going to be difficult to split the title for the structure away from the title of the land. If, however, you build a house or structure from new then there is much more chance of separating the title.

 

However, even if you build a new house you still need the land owner's permission to put your newly built property on their land, so you end up in the position of needing a lease or a usufruct.

 

A residential lease can be for a maximum of 30 years. After this period you have no rights to an extension unless the land owner agrees. A lessor can give a lessee a contract of any length or duration, however a residential contract longer than 30 years will not be valid if anyone tries to enforce it in Court. This is because a contract, even if entered into willingly by both parties, cannot supercede statute law.

 

What happens after 30 years? If your lease is for 30 years then you either leave the property under the terms of the lease, or you try to renegotiate a further lease. A new lease will of course involve payment of further sums of money. Another way of viewing a lease is paying all of your rent in advance in one go.

 

If you have a contract for a 30+30 year lease then if the owner of the land is content you can just keep living on the land. However if the land owner wants you to vacate then things could get a little messy as ultimately the law will be on the land owners side. Consider that the original owner may sell the land to another party before the 30 years has expired, or more commonly, the original lessor dies and their beneficiaries now own the land. The beneficiaries may wish to sell the land at full market value, which would mean they would not agree to another lease, or that they would not honour the original 30+30 year contract. In Thai law, they are certainly not bound to honour the +30 part of the contract.

 

Another option is to have a usufruct for the duration of your life over the land and everything on the land including any buildings. With a usufruct for life you have the right to occupy, improve and use the land in a non-destructive way until you die. Understand though that with a usufruct you do not own the land. The land will have to belong to someone else, and when you die the encumbrance will be removed and the owner can take possession of the land and anything on it.

 

A third way is to own the land through a limited company. This option has downsides and upsides. It can work well, or if you involve the wrong people you can lose everything. Buyer beware with this one.

 

Thanks a lot Blackcab, your explanation is very good. As you write it would be equivalent to paying 30 years rent upfront. 

I have been with my Thai gf for 5 years and I trust her but I would like to continue to rent for at least a few more years.

I really do not like leasing and much prefer freehold. So at the moment I am thinking after a few more years then have my gf buy the house and land freehold. Also for her to enter into a Usufruct contract with me giving me the right to live there until I die.

Basically the land and house would eventually go to my gf or her children which is what I would want.

Thanks again

Keith 

 

[blackcab]

A couple of points... with a life usufruct you may be worth more dead than alive. I say that in jest of course. 

 

Secondly, if you were thinking of putting the land in your partner's children's name then this will not work for you until they are 20.

 

You can of course put the land in their name, however land in a minor child's name cannot be encumbered without permission of the Court. What this means is that a child or the child's guardian cannot grant you a usufruct on the land. This is because you can not give a minor child an obligation.

[Keith5588]

7 minutes ago, blackcab said:

A couple of points... with a life usufruct you may be worth more dead than alive. I say that in jest of course. 

 

Secondly, if you were thinking of putting the land in your partner's children's name then this will not work for you until they are 20.

 

You can of course put the land in their name, however land in a minor child's name cannot be encumbered without permission of the Court. What this means is that a child or the child's guardian cannot grant you a usufruct on the land. This is because you can not give a minor child an obligation.

Thanks again, good points. I didn't say but I am 69 years of age and my Thai gf 56. Luckily we are still both very healthy. Her children have their own lives and are over 20. So good facts but would not apply to me. I would want everything to be left to my gf if I die.

[1FinickyOne]

36 minutes ago, Keith5588 said:

I would want everything to be left to my gf if I die.

Which is why I put everything in my GF/wife's name... then I don't have to worry about usufruct and leases... it's nice to give her the security of having things in her name now and not have to worry about wills, lawyers, estate planning, - - at least for that fraction of her inheritance... 

 

ps - if I die? you are not certain you have reservations for the afterlife set yet? 

Edited July 8, 2022 by 1FinickyOne

[1FinickyOne]

4 hours ago, Keith5588 said:

So basically at the end of the first 30 year land lease if it is not renewed then the foreigner also loses the house? 

you say you are 69 - at 99 you will just be happy that there is velcro to hold up your pants... but I like your spunk - - another 30 years will put you at 129... by then you will need the velcro for your teeth too... 

[PJ71]

25 minutes ago, 1FinickyOne said:

Which is why I put everything in my GF/wife's name... then I don't have to worry about usufruct and leases... it's nice to give her the security of having things in her name now and not have to worry about wills, lawyers, estate planning, - - at least for that fraction of her inheritance... 

 

ps - if I die? you are not certain you have reservations for the afterlife set yet? 

Would strongly suggest still having a will(s).

 

 

[VocalNeal]

4 hours ago, blackcab said:

The first thing to understand is that title to the structure of the house and title to the land are normally the same thing. This is because when you own chanote-titled land in Thailand you own everything on it. This is the same in many countries. There is very little freehold/leasehold of houses and land in Thailand, although it can be done.

 

If a piece of land has an existing house or structure on it then it is going to be difficult to split the title for the structure away from the title of the land. If, however, you build a house or structure from new then there is much more chance of separating the title.

 

However, even if you build a new house you still need the land owner's permission to put your newly built property on their land, so you end up in the position of needing a lease or a usufruct.

 

A residential lease can be for a maximum of 30 years. After this period you have no rights to an extension unless the land owner agrees. A lessor can give a lessee a contract of any length or duration, however a residential contract longer than 30 years will not be valid if anyone tries to enforce it in Court. This is because a contract, even if entered into willingly by both parties, cannot supercede statute law.

 

What happens after 30 years? If your lease is for 30 years then you either leave the property under the terms of the lease, or you try to renegotiate a further lease. A new lease will of course involve payment of further sums of money. Another way of viewing a lease is paying all of your rent in advance in one go.

 

If you have a contract for a 30+30 year lease then if the owner of the land is content you can just keep living on the land. However if the land owner wants you to vacate then things could get a little messy as ultimately the law will be on the land owners side. Consider that the original owner may sell the land to another party before the 30 years has expired, or more commonly, the original lessor dies and their beneficiaries now own the land. The beneficiaries may wish to sell the land at full market value, which would mean they would not agree to another lease, or that they would not honour the original 30+30 year contract. In Thai law, they are certainly not bound to honour the +30 part of the contract.

 

Another option is to have a usufruct for the duration of your life over the land and everything on the land including any buildings. With a usufruct for life you have the right to occupy, improve and use the land in a non-destructive way until you die. Understand though that with a usufruct you do not own the land. The land will have to belong to someone else, and when you die the encumbrance will be removed and the owner can take possession of the land and anything on it.

 

A third way is to own the land through a limited company. This option has downsides and upsides. It can work well, or if you involve the wrong people you can lose everything. Buyer beware with this one.

 

Does a usufruct cease if the land owner dies?

[blackcab]

5 minutes ago, VocalNeal said:

Does a usufruct cease if the land owner dies?

 

If the land owner dies the usufruct stays in place. This is because a usufruct is a real property right that is registered on the back of the title deed.

[1FinickyOne]

5 hours ago, PJ71 said:

Would strongly suggest still having a will(s).

 

 

yes, you are correct. Of course I have a will - only my Thai assets are in my wife's name...