Thailand mulls allowing foreigners to buy 75% of condo units

[thaimacky]

 

A year ago I was thinking about buying a condo in Thailand. The 49% quota for foreigners would hardly ever have become a problem. But what definitely stopped me from buying is the new tax law. I am now even about to leave Thailand with my family.

[CallumWK]

4 minutes ago, thaimacky said:

But what definitely stopped me from buying is the new tax law.

 

I think you have a valid point there. I also had plans to buy a condo, but there may be some surprises down the line, where suddenly that condo increases 35% in price.

[jaywalker2]

6 hours ago, scubascuba3 said:

Probably right but still a good idea, for Thais too

It's always a bad idea to position your housing market

 

4 hours ago, newnative said:

Not a Sansiri product.  Maybe that big Chinese project that stalled during covid.   Others have done ok--Riviera Jomtien, Monaco, and Ocean Drive.  Cetus, Aeras, Copacabana, Lumpini Park Beach and Seaview, etc.

Have they? I see units for rent at these places all the time for ridiculous prices, a 35 sq meter unit at the Riveria, for example, going for 20,000. Other places are even more. I wonder what percentage of units are actually rented out.

 

In Bangkok, I live next to Life One Wireless, where 35 sq meter units go for for 25,000 and up. According to Hipflat, out of the total of 501 units, 410 are for rent. I believe it too looking at the windows at night.

[jaywalker2]

6 hours ago, scubascuba3 said:

Probably right but still a good idea, for Thais too

Not at all. It will just create more speculation at inflated prices.

[crazykopite]

I might be mistaken but I was on the understanding the 50 year lease is for commercial property 

[Expatwannabee]

5 hours ago, Tequila makes me happy said:

I think the pertinent question is actually, if foreigners own 75% of the condos but only 49% of them can vote, then who will comprise the 26 % that does not get a vote.

I am only guessing but to me the only way this would be workable would be....All 75% of foreigners may vote but, if all 75% vote the same, the vote is capped 49%. This leaves the vote of the Thai owned condos (25%) being actually worth 51%. This way the 75% foreigners cannot automatically out vote the Thai quota. I'm probably wrong but I don't see how else it would work.

[newnative]

1 hour ago, jaywalker2 said:

It's always a bad idea to position your housing market

 

Have they? I see units for rent at these places all the time for ridiculous prices, a 35 sq meter unit at the Riveria, for example, going for 20,000. Other places are even more. I wonder what percentage of units are actually rented out.

 

In Bangkok, I live next to Life One Wireless, where 35 sq meter units go for for 25,000 and up. According to Hipflat, out of the total of 501 units, 410 are for rent. I believe it too looking at the windows at night.

    The 'others' in my post refers to developers and Pattaya projects they have built to sell condo units to buyers.  It had nothing to do with any after sale rentals by the buyers of those condos.  Hipflat listing 410 units for rent in a 501 unit project does not automatically mean there are 410 condos actually for rent in the project.  Many listings are the same rental listed by different agencies. 

    The same goes for condos for sale.  The last condo I had for sale was listed by at least a dozen different agencies on Hipflat.  One condo for sale, 12 agencies listing it.  10 condos for sale in a project could easily show up as 30 or more listings.  That same project I owned at now shows 76 condos for sale and 71 for rent.  The entire project, an older, higher-end project, only has 198 units so, obviously, 147 out of 198 units are not actually for sale or rent.  There are also listings that are no longer active but still there.

     Windows showing lights at night is also not necessarily a reliable gauge as to how many units have been sold--or rented--in a project.  Lots of condo projects have absentee owners.  My spouse and I have a Bangkok getaway condo that we visit maybe once a month for a few days.  Most of the time the windows are dark at night.  In our case, and many others, it just means the owners are not there.

[MrJ2U]

Definitely would lead to higher quality tenants.

 

Many Thai owned condos lack proper maintenance compared to foreign owned condos in my humble opinion.

[scubascuba3]

6 hours ago, jaywalker2 said:

Not at all. It will just create more speculation at inflated prices.

Older condos are much better value, new ones do have inflated prices with daft rent vs older condos 

[scubascuba3]

6 hours ago, jaywalker2 said:

I see units for rent at these places all the time for ridiculous prices, a 35 sq meter unit at the Riveria, for example, going for 20,000. Other places are even more. I wonder what percentage of units are actually rented out

Or an older condo 20k baht would get 60m to 100m

[SiamAndy]

Then in a year or so they will change the rules back causing chaos once again. Thailand truly is the land of rug pulls.

[tandor]

17 hours ago, jippytum said:

most condos are already more than 49% foreign owned. i. if you calculate Thai  proxies and company owned units  run by foreigners

 

don't worry, Thais will still be used as front people for some remuneration for Condos and House and land deals.

[Funkymover]

That is to keep the chinese happy again, as they are buying a large portion of property 

[cookie1974]

Well with the huge amount of nearly empty condo blocks around the jomtien/pattaya area someone needs to buy them plus it gives an incentive to the russian and chinese mafìa groups to wash a lot more of their black money in building property portfolios

[Gknrd]

This is for the Chinese trying to get their money out of China not Westerners.

[ChipButty]

They cant sell the ones they have built, One particular project I know, I will admit it is good construction, was built 7 years ago and they haven't sold them all, the prices are still the same as they were 7 years ago, so if you bought one thinking it would increase in value forget it, owners would be lucky to get their money back, there is some 2 bedroom units they have lost money there were 12 million baht I've seen them for sale at 9 million baht.

Couple of years back a guy I met was interested to buy a couple of units so I went to see and had a walk around with the girl out of the office, there is units that were bought by Thai's just left empty never used, she told me the foreign quota available is 22%.

Stop paying these silly prices, I see a Russian woman trying to sell her 30sqm unit nothing special for 3.2 million <deleted> construction I remember it being built, 

[brianthainess]

This is because they simply have built to many and can't sell them. 

[lapamita]

20 hours ago, ronster said:

So Thais ain't buying all the empty condos so they want to flog them to russians and Chinese but give them no say in running the buildings 😀🙈

Our Condo is run fully by foreigners.

The Board are foreigners

The CEO

..you can take over the board and take any juristic ..if you find the majority in meeting, have nothing to do with ownership

..hard fight to take over, our condo get it 5 years ago  with policecase and civilcase and lawyers

..now we have a full shrinking fund compare to before and a surplus on maintenace since 2 years

[lapamita]

20 hours ago, jippytum said:

currently you are allowed three votes at the  condo AGM as a maximum regardless of the number of units owned. 

 

3 proxyforms is the limitation for you, that you can hold for other owners . excluding your own condos

Edited June 23 by lapamita

[JonnyF]

Step 1. Tax money coming into Thailand (recent tax proposals)

 

Step 2. Incentivize the import of taxable money by making it easier to spend that money on condos in Thailand (75% ownership proposal). Mainly aimed at Russians and Chinese.

 

Step 3. Make it harder to take money out of Thailand and potentially tax it again when it leaves (to be announced).

 

Seems to me Thailand is getting desperate. Economic indicators are not good.

 

 

[wensiensheng]

23 hours ago, samtam said:

 

Foreigners can already vote in an AGM and their vote is the same as Thai owners.

 

 

 

I am a foreigner with 100% ownership of my condo. I am chairman of the board of the condo. I have as much say as anyone else in the running of the building, (through my vote at the AGM). As it is, my position allows me to have a very large say in how the building is run. Our condo rules specify expenditure limits, significant structural changes etc, that require AGM majority voting. This applies to all owners, irrespective of their nationality.

Your position is currently clear. I think the question being asked is: if the foreigner limit goes to 75%, who decides whether it is your vote that counts, or the guy who last purchased his condo to take it over 50% foreign owned?

 

if there is 75% foreigner owned, 2/3 of those people will have a vote. 1/3 or 25% of total ownership, will not. So your AGM majority voting, irrespective of their nationality would appear to be out of the window once foreign ownership goes above 50%. Isn’t that so?

[wensiensheng]

12 hours ago, Expatwannabee said:

I am only guessing but to me the only way this would be workable would be....All 75% of foreigners may vote but, if all 75% vote the same, the vote is capped 49%. This leaves the vote of the Thai owned condos (25%) being actually worth 51%. This way the 75% foreigners cannot automatically out vote the Thai quota. I'm probably wrong but I don't see how else it would work.

Possibly the first 50% of foreign owned units sold come with a vote, the other 50% don’t. If someone sells a voting unit then the new buyer goes to the back of the voting queue and the first in line in the 25% non voting unit, becomes a voter.

 

who will actually keep track of this method, or your method, I have no idea. 

[wensiensheng]

22 hours ago, Liverpool Lou said:

The law (Act) in conjunction with the JP;  why should it be any different from the current 49% maximum decision?

Because everyone within the current 49% maximum decision has one vote.  Thais are supposedly 51% , also one vote.

 

but now 75% could be foreign owned, and since the stated intention is that Thai control will be maintained, not everyone in the 75% foreign category can have one vote. If they did, they could out vote the Thai’s and control the building. 😱

[wensiensheng]

18 hours ago, spidermike007 said:

You can tell how desperate they are now that the economy is in a downward skid. They have no policy, so they are just throwing ideas into a hat. This administration seems even worse than Prayuth. Who could have thought? 

 

Srettha was a true bottom of the barrel pick. As are all the cabinet ministers.

Pick is the word. He certainly wasn’t who the people voted for 

[Presnock]

7 hours ago, cookie1974 said:

Well with the huge amount of nearly empty condo blocks around the jomtien/pattaya area someone needs to buy them plus it gives an incentive to the russian and chinese mafìa groups to wash a lot more of their black money in building property portfolios

being a financial non-wizard of any type, what happens if Thailand is invited to join BRICS?  Then they go to a BRICS currency or use of local currencies only?  What does the US do?  I have read numerous articles about BRICS and their desires to de-dollarize everything that they deal with.  ANy financial and political wise AN'ers out there or is it actually too far in the future for those of still here after next week?

What about the condos and rents?  there was some article that said the BRICS were valuing their currency currently at 1 BRICS equals 55 US dollars.  

[newnative]

1 hour ago, wensiensheng said:

Because everyone within the current 49% maximum decision has one vote.  Thais are supposedly 51% , also one vote.

 

but now 75% could be foreign owned, and since the stated intention is that Thai control will be maintained, not everyone in the 75% foreign category can have one vote. If they did, they could out vote the Thai’s and control the building. 😱

     I don't think that is how it will work.  As I said before, I think it will be a weighted vote.  Every condo owner will have a vote, but the foreign quota owners will have their votes adjusted so the total percentage of their vote does not equal more than 49%, to maintain the 51% Thai control.

    Realizing that it wll be much more complicated, here is a very simple example:  A condo project with 4 equal-size condos, 3 owned in foreign quota and 1 in Thai name.  The 75% foreign quota limit has been reached.  If the Thai decided to sell his condo, it could not be moved to foreign quota.

     To maintain Thai control in the 4-unit project, the voting will be weighted.  The Thai owner's vote will have a weight of 51%.  The 3 foreign quota owners will have a weighted vote of 16.33% each.  Even if the 3 voted in favor of a proposal, they would still lose 49% to 51%, if the Thai owner opposed the proposal.   

      As I said, just the simplest example possible.  In reality, it will be much more complicated, with condo ownership sqm percentages to be figured in, in addition to units held in company name.  I definitely do not want to be the one tasked with figuring all that out before the AGM!

[kinyara]

Reading all the comments I guess I must be the only person happy with this potential change. Should it happen I'll be the first person down the land office changing my company owned condo into my own name. Certainly a positive move for someone in my position.

[newnative]

10 minutes ago, kinyara said:

Reading all the comments I guess I must be the only person happy with this potential change. Should it happen I'll be the first person down the land office changing my company owned condo into my own name. Certainly a positive move for someone in my position.

Not the only one.  I think it is definitely a positive development if it goes through.

[Felt 35]

On 6/22/2024 at 7:17 AM, Tony M said:

They can probably see a major tax-grab on funds (income) being transferred, by "tax residents", from overseas to purchase condos in Thailand.

 

Why🤔.......would a foreigner with some financial insight invest in anything here under the new tax rules and with the prospect of being taxed for investment and finances in their country of origin as well... 😕

Felt

[scubascuba3]

56 minutes ago, kinyara said:

Reading all the comments I guess I must be the only person happy with this potential change. Should it happen I'll be the first person down the land office changing my company owned condo into my own name. Certainly a positive move for someone in my position.

Only downside you'll end up closing the  company and paying any tax due based on the written down value, as well as usual transfer taxes