Cheating The Thai Government On Land Declaration?

[j0hnga1t]

I'm a farang (Chinese guy born in the US). Here is my situation. I just bought a piece of land with my gf (200 talang wah) in Issan or is it Isan. One of the women who works at the temple inherited some property from her parents who are long gone (deceased). She wants to tear down the old structure where she lived with her folks and build a small one for herself. She likes my gf and offered to sell her part of her plot at the rate of 30,000 baht per 100 talang wah. Since my gf and the lady are friends and it's close to her temple (which I also visit when I'm in Thailand, I agreed to purchase 200 talang wah while I was in Thailand two weeks ago. Well upon my return to the US, I call my gf and she says that the "lady at the temple" (yes I've seen her and she does work at my gf's temple and is some kind of spiritual advisor) wants to sell another 50 talang wah. My girlfriend said she'd take half of it (25 talang wah) and asks me for the money. I agree since it's only another 7,500 baht.

Now for the good part...my gf and I talk a few days later, she asks me if it's okay that when the papers are filed, that it says that we (or rather her) own 200 talang wah, though in reality it's 225 talang wah. She said that when the parents of the lady at the temple "registered" or "reported" the amount of land to the government, they told them that they have 300 talang wah, when in reality, they had 350 talang wah. "The lady at the temple" wanted us to purchase part of the "unrecorded" 50 talang wah. I told my gf that if we purchase 225 talang wah, I want 225 talang wah on the paperwork and if we only purchase 200 talang wah, I only want 200 talang wah on the papers. She said to me "Tee ruk, this is Thai, this is how we do it. We do it that way so we pay less taxes." I told her that I'm not Thai, I am not in Thailand and I want it recorded (excuse me for being naive) the right way. She told me not to worry. I then asked her, "Hey, you're a buddhist and so is she, is it right to cheat the government?" She had no response. I thought to myself - shame on "the lady at the temple" for trying to pawn off the "unrecorded" 50 talang wah to me and my gf since it has never been recorded with the local land people.

Being Asian, I know why they do what they do, heck if I grew up there and lived there, I'd probably do the same; HOWEVER, my question is - Would a true buddhist have no problems with cheating the government and filing false paperwork/deeds? I would think a transaction like that would take away from their "merit" bank.

What are your thoughts?????? Am I making a mountain out of a molehill?

[Brucenkhamen]

This is Thailand, don't expect many Thais you meet to be a good example of what a good Buddhist should or should not do, sometimes the seemingly devout are the worst. I wouldn't be concerned unless this was is a Forest Wat with a reputation for high standards.

My wife informs me that in Thailand tax is payed on land when it's sold, which probably why they want to under-report it's size. Either way I'd think twice about getting involved in these sorts of transactions in Thailand unless you are sure you can trust those involved.

You'll probably get more responses if your post is moved to the General forum as your question doesn't really concern Buddhism.

[Virin]

This is not about being Buddhist. I never heard anyone would accept the transaction like this case unless there is a scam involved. I'm sorry to commment straight forward I doubt your gf why she tried to convince you to accept it with this stupid reason. This is not normal case, it's not tax cheating, but you're being cheated, I am Thai and heard this kind of stories.

Edited June 16, 2008 by Virin

[sabaijai]

People who consider themselves to be Buddhists don't always follow Buddhist ethics. Hence lots of apparently un-Buddhist activity occurs in majority-Buddhist countries (Thailand has no official state religion, by the way), just as lots of apparently un-Christian activity occurs in majority-Christian countries.

[gymshark]

It doesn't matter which religion or philosophy you follow, human nature always gets the upper hand. I am sure even Kwai Chang Caine would like to pay less tax grasshopper.

If it was me though I would be the same as you, get it on paper, all in order.

[OlRedEyes]

I'd say that if you need to ask these questions, you are obviously new to Thailand's culture. Step very warily until you get more used to Thailand and it's quirks.....

Professing to be a follower of a religion/philosophy does not guarantee adherence to its demands.

Edited June 16, 2008 by OlRedEyes

[lannarebirth]

Buddhism questions aside, the explanation your gf has provided you doesn't seem right to me. Rather than the government being cheated out of it's due money, you might consider that it may be you being cheated instead. I may be wrong, but all taxation I have encountered has been based on valuation and not land size.

[Artisi]

The usual method to dodge tax is to under value the sales agreement- not reduce the land area- seems some sort of scam going on with you in the middle. Rest assure what ever is going on it will be you that losses out.

[rockyysdt]

If the end up with documents say that you purchased "200 talang wah" then the extra 25 talang wah will never legally be yours.

You won't have any documents to prove that it's yours.

If the additional land area sells for 7,500B then the tax involved shouldn't be a deal breaker??!!

[sabaijai]

Am moving this thread to the Real Estate, housing, house and land ownership subforum, as I think you may find more authoritative answers there

[quiksilva]

Yes it happens but it is frought with problems. Religious concerns aside.

Do it by the book, pay a little more tax and have fewer headaches when it comes time to sell, build on or use as collateral later on.

Beware that the seller may not like this idea though as they are trying to sell 25 sq wah that they do not technically own, it might even belong to the temple if its that close!

[eljeque]

Any amount of land that you buy is on the land title deed. 200 225 etc

Anything else is not being bought.

Is she actually going to split off an additonal 25 + 25 talangwah from the larger plot of land?

How is this 25 tw connected to your land? In front, back, right side, left side?

Is the seller going to make all 225 onto one chinote or will you be buying a 200 tw chinote and a 25 tw chinote?

[PattayaParent]

If the land is shown on a Chanote then I can't see that the Land Office won't know the size as the plot size is recorded and the area calculated.

Something is not right but if the seller really is worried about tax tell her you'll pay the 'extra' tax on the extra 25 TW. It's only 1%.

[sunlife2000]

surely this is not a chanote paper

[ThaiLawOnline]

No, it doesn't sounds like a chanotte or Nor Sor Sam or Nor Sor Sam Gor.

I am not sure if I understand your problem (religious questions aside)...

You should understand the different kinds of title deeds in Thailand. For example, if you have a "chanotte" or a "Nor Sor Sam" or "Nor Sor Sam Gor", these are proper title deeds. The owner is clearly written and the size of it too. Google "Title deeds in Thailand" for more explanation. Transfers are made at the land department.

But if you bought some land (under your girlfriend's name) for example a "Por Bor Tor 5", it is a document from the local administration office that shows the possessor has been paying his taxes (locality maintenance) and that he has the right to possess this land but does not have the land title. This area is located under The Agriculture Land Reform Office but it is not registrated at the land deparment. It means you can possess this land without a land title until the government announces to change this area into a "private" area then you will be able to upgrade the land title. But this could take some time... years...

So, you should verify what kind of deeds you have. That's very important.

The second part about "cheating the Thai government" (this is usually on the value of the land, on Chanotte or proper deeds) People are selling X and they normally declare less at the land department to avoid taxes because they are based on %. This is a common practice in Isaan. I don't say it's good or bad, it's just isaan. What I believe is your problem is that you (your girlfriend) bought some land with not proper title deeds. So, they are doing it by notices, hand shakes, customs and maybe they went to some district office, but this is NOT registered at the land department.

If you can scan your documents (deeds), you could ask people to tell you exactly what you have, the title deed, the owner, the size, the location.

[roygsd]

No, it doesn't sounds like a chanotte or Nor Sor Sam or Nor Sor Sam Gor.

I am not sure if I understand your problem (religious questions aside)...

You should understand the different kinds of title deeds in Thailand. For example, if you have a "chanotte" or a "Nor Sor Sam" or "Nor Sor Sam Gor", these are proper title deeds. The owner is clearly written and the size of it too. Google "Title deeds in Thailand" for more explanation. Transfers are made at the land department.

But if you bought some land (under your girlfriend's name) for example a "Por Bor Tor 5", it is a document from the local administration office that shows the possessor has been paying his taxes (locality maintenance) and that he has the right to possess this land but does not have the land title. This area is located under The Agriculture Land Reform Office but it is not registrated at the land deparment. It means you can possess this land without a land title until the government announces to change this area into a "private" area then you will be able to upgrade the land title. But this could take some time... years...

So, you should verify what kind of deeds you have. That's very important.

The second part about "cheating the Thai government" (this is usually on the value of the land, on Chanotte or proper deeds) People are selling X and they normally declare less at the land department to avoid taxes because they are based on %. This is a common practice in Isaan. I don't say it's good or bad, it's just isaan. What I believe is your problem is that you (your girlfriend) bought some land with not proper title deeds. So, they are doing it by notices, hand shakes, customs and maybe they went to some district office, but this is NOT registered at the land department.

If you can scan your documents (deeds), you could ask people to tell you exactly what you have, the title deed, the owner, the size, the location.

My wife and I bought some land in Issan about 3 years ago, the tax officer said the land was woth more than we paid so we paid tax on what the officer decided was its true value........... so pay for what you get on the paperwork and dont buy the rest if its a problem, and dispite what they say to you it is or will be a problem for you sometime in the future.

You were content to buy the land as offered originally, clearly you dont need it, this is their problem, unless you want to buy a problem that is?

Roy gsd

[cclub75]

Think about it : a land that is not declared... doesn't exist !

The idea that the family bought 350 but declared only 300 is rather strange. Or they did it, and they were cheated themselves ! And now they try to give you the hot potatoe....

As someone said, the usual scam, large scale, is regarding the value of the transaction, to reduce the amount of taxes ! Absolutly not the surface of the land.

What's the point to buy a land that doesn't officially exist, and that you can't resale ?

If you put on the side the story about the different kind of land (agriculture and "real land") I don't really understand.

Edited June 18, 2008 by cclub75

[frenchfarangjomtien]

Sorry, a bit off-topic, but,

Is it true that when you buy a land in Thailand you can declare that you buy it a lot cheaper than the real price to pay less transfer fee ?

In Krabi it seems that even when they know that the real land price is around 5 millions, lawyers declare that you buy it 500000 thb, and then you pay tax on only 500k ?

How is it possible that land office accept to be cheated that much ?

Thanks for info.

[Langsuan Man]

If you try and sell any part of it it don't you think that any buyer might want to have it surveyed ?

And if the size is not accurate it is going to show up on a survey and who is going to answer for it

My biggest concern would not only be the size question but the fact that a Buddhist Temple is involved

Can anyone say Alpine Land Case

[gregb]

Think about it : a land that is not declared... doesn't exist !

The idea that the family bought 350 but declared only 300 is rather strange. Or they did it, and they were cheated themselves ! And now they try to give you the hot potatoe....

Or, more likely, they've encroached on forest or other government owned land and are now trying to sell you the land they illegally stole. Yes, this is quite common. Thai's have no problem slowly extending their borders into surrounding empty area, even when there is a chanote involved. In my wife's case, the neighbor built his wall 2 meters into our property. Boy was he angry when the government came and told him he had to move his wall back. The fact that I was a farang just compounded his anger.

But yes, many Thais have no problem at all stealing land when they think they can get away with it. And they have no shame about it either. Up to you what you want to do here, but that non titled land doesn't belong to her, and she has no right to sell it. It's not a tax scam. Tax scams under report the selling price, but leave the area intact. No, this is land theft pure and simple.

[ChiangMaiFun]

People who consider themselves to be Buddhists don't always follow Buddhist ethics. Hence lots of apparently un-Buddhist activity occurs in majority-Buddhist countries (Thailand has no official state religion, by the way), just as lots of apparently un-Christian activity occurs in majority-Christian countries.

but 'why' is the begging question

[ChiangMaiFun]

Sorry, a bit off-topic, but,

Is it true that when you buy a land in Thailand you can declare that you buy it a lot cheaper than the real price to pay less transfer fee ?

In Krabi it seems that even when they know that the real land price is around 5 millions, lawyers declare that you buy it 500000 thb, and then you pay tax on only 500k ?

How is it possible that land office accept to be cheated that much ?

Thanks for info.

It's all based on the Land Offices evaluations - which are very under valued and everyone under-declares the sale price

[clinique]

Sorry, a bit off-topic, but,

Is it true that when you buy a land in Thailand you can declare that you buy it a lot cheaper than the real price to pay less transfer fee ?

In Krabi it seems that even when they know that the real land price is around 5 millions, lawyers declare that you buy it 500000 thb, and then you pay tax on only 500k ?

How is it possible that land office accept to be cheated that much ?

Thanks for info.

Actually it is not a matter of 'declaring' less. The land department worls their calculations from "their" assessed value NOT from the sales contract.

So u arecorrect, if you buy land for 5million but the land is assessed by the land department records (they have these on file) at less then you pay on the lower amount. The land department assessed values are several years behind market values is the reason.

[ChiangMaiFun]

Sorry, a bit off-topic, but,

Is it true that when you buy a land in Thailand you can declare that you buy it a lot cheaper than the real price to pay less transfer fee ?

In Krabi it seems that even when they know that the real land price is around 5 millions, lawyers declare that you buy it 500000 thb, and then you pay tax on only 500k ?

How is it possible that land office accept to be cheated that much ?

Thanks for info.

Actually it is not a matter of 'declaring' less. The land department worls their calculations from "their" assessed value NOT from the sales contract.

So u arecorrect, if you buy land for 5million but the land is assessed by the land department records (they have these on file) at less then you pay on the lower amount. The land department assessed values are several years behind market values is the reason.

That's right but isn't it bizarre? they are losing Billions -Amazing Thailand- most countries base it on sale price

[CWMcMurray]

I know that everyone is technically correct, but if he is willing to buy this land in his girlfriend's name then at the end of the day isn't it really a non-issue? After all, it would be her that is "being cheated" not him and she seems ok with it....

Even if he did end up marrying her this land would still not be considered as joint asset in the case of divorce, since it was purchased before the marriage.

At the end of the day,rather than getting all wrapped up in this issue, just realize what is officially being bought is what is on the paperwork and decide if the price they are asking is ok with you. If the difference in price is about 7k thb, just think about it like this....

If the seller advised that they wanted to raise the price for the original plot of land by this much would you still be interested in buying the plot of land?

[Khun Jean]

Sorry, a bit off-topic, but,

Is it true that when you buy a land in Thailand you can declare that you buy it a lot cheaper than the real price to pay less transfer fee ?

In Krabi it seems that even when they know that the real land price is around 5 millions, lawyers declare that you buy it 500000 thb, and then you pay tax on only 500k ?

How is it possible that land office accept to be cheated that much ?

Thanks for info.

You can turn this around and say the real price is around 500K and the greater fool buys it for 5M and its real real worth probably somewhere in between.

Wait until the buyer meets even the greatest fool that buys it for 6M. The possibility exists that Specific Business Tax have to be paid at a higher rate then the land transfer would have been expect to pay tax over 6M-500k.

I never bought land with that high prices but i just record the real sale price and pay the little bit extra tax.

The difference what we paid and the land office estimated was never more then 20% anyway. When it is time to sell this will be beneficial. Waiting more than 5 years even more so.

[taninthai]

Sorry, a bit off-topic, but,

Is it true that when you buy a land in Thailand you can declare that you buy it a lot cheaper than the real price to pay less transfer fee ?

Exactlyy my thoughts perhaps the land office are correct in there valuation off land and they see it as the buyer is getting ripped off paying the extortionate amount

In Krabi it seems that even when they know that the real land price is around 5 millions, lawyers declare that you buy it 500000 thb, and then you pay tax on only 500k ?

How is it possible that land office accept to be cheated that much ?

Thanks for info.

You can turn this around and say the real price is around 500K and the greater fool buys it for 5M and its real real worth probably somewhere in between.

Wait until the buyer meets even the greatest fool that buys it for 6M. The possibility exists that Specific Business Tax have to be paid at a higher rate then the land transfer would have been expect to pay tax over 6M-500k.

I never bought land with that high prices but i just record the real sale price and pay the little bit extra tax.

The difference what we paid and the land office estimated was never more then 20% anyway. When it is time to sell this will be beneficial. Waiting more than 5 years even more so.

[chiangmaibruce]

I know this thread has been about land, but just thought that perhaps I'd point out - for those reading this who may be less experienced with Thai real estate - that under-reporting the value of the property when selling a condo raises other issues.

In that instance you may make a saving on tax only to then find you can't get (all) the sale proceeds out of the country .... maybe not so clever.

On a related matter, I read recently that only about 2.3 million Thais pay personal income tax. Even allowing for the many Thais who fall below the tax threshhold, that would seem to imply there are a heck of a lot of people who are out there dudding the system

[ChiangMaiFun]

I know this thread has been about land, but just thought that perhaps I'd point out - for those reading this who may be less experienced with Thai real estate - that under-reporting the value of the property when selling a condo raises other issues.

In that instance you may make a saving on tax only to then find you can't get (all) the sale proceeds out of the country .... maybe not so clever.

On a related matter, I read recently that only about 2.3 million Thais pay personal income tax. Even allowing for the many Thais who fall below the tax threshhold, that would seem to imply there are a heck of a lot of people who are out there dudding the system

most of us who do this have no intention of taking the money out - so, actually, it is clever! it's up to the government to be even more 'clever' and see the contract etc. and charge tax on the sell price - but that's too obvious TIT

[taninthai]

Just my opinion but I think the land office are the people that actually know the real price/value off a piece off land

just because some ferang pay well over the odds for what is basically a piece off jungle land of which there is shed loads about does not mean that that it is real value I think if they new some of the prices payed they would struggle to hide their laughter in the office