Property Stimulus Package

[thaigene2]

Yes exactly so.

The developer in this instance simply will not have access to your deposit for funding construction in the manner you described.

Yes the bank is concerned with seeing cashflow however what they really want is to see the project sold out, so that they can realize full earnings.

With a third party escrow system, the developer must deliver the product in order to receive the funds. The details of how it will work will likely boil down to the escrow agency terms.

I suspect that reasonable developers will have a term that states that if they don't deliver within a specified period of time, (allowing for usual delays) then the deposit would be refunded.

Only the big boys can offer terms like these, which is good for the market. So much of the problems in the industry here stem from Mom & Pop developers, who whilst wily operators in the industries where they made their money, are inexperienced with property having only entered this industry motivated by greed and ego.

It would be good for the consumer to see these guys shut out of the market. Unfortunately though I suspect that may not happen if 3rd party escrow agents are not mandatory, market forces then must come into play, and these guys will have to offer products on the cheap to make sales.

This will not solve the problem overnight of course, but it is a very promising step in the right direction, we now have to watch to see how this pans out.

Okay - yes that's good. If not mandatory, then awareness raising about this will be required. When does it come into force - any idea?

[quiksilva]

The tax breaks were officially announced in the Royal Gazette last Saturday so they should come into effect by the 15th

I am not sure about the escrow law but seeing how fast they acted on the tax breaks it should be quite soon.

[Heng]

A nice little bonus. I still recall the last time around that they did this. Appreciated it then as I will this time around.

[seasider]

Yes exactly so.

The developer in this instance simply will not have access to your deposit for funding construction in the manner you described.

Yes the bank is concerned with seeing cashflow however what they really want is to see the project sold out, so that they can realize full earnings.

With a third party escrow system, the developer must deliver the product in order to receive the funds. The details of how it will work will likely boil down to the escrow agency terms.

I suspect that reasonable developers will have a term that states that if they don't deliver within a specified period of time, (allowing for usual delays) then the deposit would be refunded.

Only the big boys can offer terms like these, which is good for the market. So much of the problems in the industry here stem from Mom & Pop developers, who whilst wily operators in the industries where they made their money, are inexperienced with property having only entered this industry motivated by greed and ego.

It would be good for the consumer to see these guys shut out of the market. Unfortunately though I suspect that may not happen if 3rd party escrow agents are not mandatory, market forces then must come into play, and these guys will have to offer products on the cheap to make sales.

This will not solve the problem overnight of course, but it is a very promising step in the right direction, we now have to watch to see how this pans out.

I have some land i'm selling, value about 1 million baht.

Can someone tell me what the fees would have been and what they would be now, based on a figure of 1 million baht.

Reason i ask is the potential buyer offered a lower price but said he would pay all the transfer fee's. The difference between the lower offer and original price is, i think, a similiar amount to what the savings on the fees would be.

Maybe he knew about the reduced land fee's. I can now offer to pay the fee's and keep the original price.

* Nobody able to give me an answer?

I guess i will call the land office tomorrow then, and try and get an answer.

[donx]

Yes exactly so.

The developer in this instance simply will not have access to your deposit for funding construction in the manner you described.

Yes the bank is concerned with seeing cashflow however what they really want is to see the project sold out, so that they can realize full earnings.

With a third party escrow system, the developer must deliver the product in order to receive the funds. The details of how it will work will likely boil down to the escrow agency terms.

I suspect that reasonable developers will have a term that states that if they don't deliver within a specified period of time, (allowing for usual delays) then the deposit would be refunded.

Only the big boys can offer terms like these, which is good for the market. So much of the problems in the industry here stem from Mom & Pop developers, who whilst wily operators in the industries where they made their money, are inexperienced with property having only entered this industry motivated by greed and ego.

It would be good for the consumer to see these guys shut out of the market. Unfortunately though I suspect that may not happen if 3rd party escrow agents are not mandatory, market forces then must come into play, and these guys will have to offer products on the cheap to make sales.

This will not solve the problem overnight of course, but it is a very promising step in the right direction, we now have to watch to see how this pans out.

I have some land i'm selling, value about 1 million baht.

Can someone tell me what the fees would have been and what they would be now, based on a figure of 1 million baht.

Reason i ask is the potential buyer offered a lower price but said he would pay all the transfer fee's. The difference between the lower offer and original price is, i think, a similiar amount to what the savings on the fees would be.

Maybe he knew about the reduced land fee's. I can now offer to pay the fee's and keep the original price.

* Nobody able to give me an answer?

I guess i will call the land office tomorrow then, and try and get an answer.

I don't know the answer but I do know that the fees you would pay depend upon how long you have owned the land. If I remember correctly (you can confirm this by searching past posts in this forum), if you bought the land one year ago then you would pay about 3% tax and 3% transfer fee so about 60,000 baht. These fees are less the longer you owned the land up to five years. Then the amount is the same as if you owned it 10 years ago.

I am only going on what I remember seeing here before. Search this forum and you will find the answer.

[quiksilva]

Yes exactly so.

The developer in this instance simply will not have access to your deposit for funding construction in the manner you described.

Yes the bank is concerned with seeing cashflow however what they really want is to see the project sold out, so that they can realize full earnings.

With a third party escrow system, the developer must deliver the product in order to receive the funds. The details of how it will work will likely boil down to the escrow agency terms.

I suspect that reasonable developers will have a term that states that if they don't deliver within a specified period of time, (allowing for usual delays) then the deposit would be refunded.

Only the big boys can offer terms like these, which is good for the market. So much of the problems in the industry here stem from Mom & Pop developers, who whilst wily operators in the industries where they made their money, are inexperienced with property having only entered this industry motivated by greed and ego.

It would be good for the consumer to see these guys shut out of the market. Unfortunately though I suspect that may not happen if 3rd party escrow agents are not mandatory, market forces then must come into play, and these guys will have to offer products on the cheap to make sales.

This will not solve the problem overnight of course, but it is a very promising step in the right direction, we now have to watch to see how this pans out.

I have some land i'm selling, value about 1 million baht.

Can someone tell me what the fees would have been and what they would be now, based on a figure of 1 million baht.

Reason i ask is the potential buyer offered a lower price but said he would pay all the transfer fee's. The difference between the lower offer and original price is, i think, a similiar amount to what the savings on the fees would be.

Maybe he knew about the reduced land fee's. I can now offer to pay the fee's and keep the original price.

* Nobody able to give me an answer?

I guess i will call the land office tomorrow then, and try and get an answer.

Do the math mate, the transfer costs will be reduced to 0.11% so 0.11% x 1,000,000 = Baht 1,100 as opposed to Baht 63,000 (inc withholding tax)

That is if SBT is applicable in your case.

As to your deal, yes you can try to keep the original price and net 62,000 baht extra or you can walk away with the same net amount, so why not just split the difference and everyone is happy!

Edited April 1, 2008 by quiksilva

[John 1]

If you read what was posted in the BKK post it said there will be no reduced tax on empty land transfer.

[seasider]

If you read what was posted in the BKK post it said there will be no reduced tax on empty land transfer.

Well, at least i have got an idea on the amount saved, but maybe irrelevant?

I read that this only applies to new house transfers atm but that it will also apply to used homes in the near future.

As for no reduction on empty land transfer's i think i will call the land office and try and get confirmation.

[dsfbrit]

I read that this only applies to new house transfers atm but that it will also apply to used homes in the near future.

seasider - are you sure about this

[quiksilva]

FYI

The Royal Decree referring to Revenue Code

regarding the revenue tax reduction. (Copy No. 472) B.E. 2551

The revenue tax reduction measurement features the special tax reduction that was previously imposed at 3.3 percent to a new rate of 0.1 percent. The transfer fee has been reduced from 2 percent to 0.01 percent and mortgage registration fee from 1 percent to 0.01 percent of the property value, including land and property types like single detached house, twin house, row house, shop house, condominium and office building.

This Act will become effective after declaration on March 28, 2008 until March 28, 2009

[quiksilva]

FYI

Escrow Business Law

The new escrow business law was enacted by Parliament on 21 December 2007 and comes into effect on 19 May 2008. The law is intended to protect buyers and sellers of real estate from possible fraud and deceit through the services of a neutral third party who holds funds, property, or legal documents for disbursement once certain conditions are met as instructed by the buyer and seller. An escrow service provider can provide services in the areas of reciprocal contract, contracts for purchase of homes, condominiums, and land. In property purchases, the escrow service provider is responsible for overseeing that payments for purchase of property are made according to schedule and as specified by the conditions under the escrow contract. In the event of breach of contract, such as the seller cannot complete the project as stated in the contract, the funds held by the escrow service provider will not be disbursed to the seller and can be returned to the buyer.

It is not mandatory under Thai laws to enlist the services of an escrow service provider. If the buyer and seller wish to avail themselves of an escrow arrangement, a contract with the buyer, seller, and escrow service provider as signatories will be needed in addition to the contract between buyer and seller.

The details are as follows:

1. The escrow service provider must be a financial institution, a commercial bank, or a financial company.

2. The escrow service provider must have received authorization to provide escrow services from the Ministry of Finance.

3. The escrow contract must be signed by the buyer, seller, and the escrow service provider.

4. The escrow service provider must be a neutral third party and have no connections to buyer or seller either directly or indirectly.

5. The escrow service provider must open a bank account for the parties to the contract with a financial institution.

6. The property, funds, or legal documents held in trust by the escrow service provider must be kept separate from the escrow service provider's personal assets.

7. For escrow property agreements, the escrow service provider must inform the Land Department that the property comes under the escrow agreement and that transfer of ownership is not permitted until the escrow service provider provides the department with a written notice authorizing transfer of ownership. The department's official must make a written record to that effect.

8. In the event of disagreement between buyer and seller, the escrow service provider must not transfer funds or property to either party until the parties come to an agreement or under order of the court.

9. Once the funds have been transferred from the escrow service provider's account to that of the rightful owner and the escrow agreement comes to an end, the escrow service provider must close the escrow bank account and inform the parties immediately.

Source: http://www.thailawforum.com/Escrow-Business.html

[satiariyan]

I gather from this thread that the temporary 1-year reduction of property transfer fees actually went into effect by April 15. last year and thus - in theory - should still be in effect a few weeks more. Now to the crucial question: Is it still in effect and is it practiced in genera on "all" land offices throughout the country? - (I'm particularly interested in practice at the one dealing with Muang Chiang Mai properties, in case some should have experience from that one)

[MojoJojo]

is the government's stimulus announcement of allowing up to 300,000 baht tax break on principal and 100,000 baht on interest payment for property purchases this year already final and approved? does anyone know the details? would appreciate feedback from anyone. thanks.