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30 Year Lease


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Hey folks,

Like some of you, i have a house & land under a 30 year lease contract, and recently, after a few years, i have been asked to pay an annual property land tax of a few K baht. Our contracts are drafted with the right to sell to anybody. A few of my farang neighbours had sold their house to Thais either at market price or at a discount when they need cash, with the landowner's approval. I dont think any locals will take over the remaining lease of the 30 year contract, so it's probably reverted back to freehold status for Thais.

Yes i have read thru the discussion on The 30+30(+30) Year Lease .

http://www.thaivisa.com/forum/303030-Year-...p;hl=30+30+year

So instead of the hassle of re-negotiation with the landowner(assuming still alive & didnt transfer to the children) just before the 30 years is up,

it's possible to sell the house & land, say after 10-20 years, to any willing Thai buyer, again with the approval & kindness of the landowner.

Any experts or homeowners care to comment?

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According to law firm advertisering on TV you can transfer and even sell the lease to another individual.

I dont think any Thai buyer wants to buy a leasehold property of 30 years or less. They want a freehold property without any restriction.

So if a foreigner manage to sell his property to a Thai, he recoups his investment & is set free from the worry about the 30 year clause.

Am i correct?

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If I am understanding correctly (not clear exactly whats in your contract if at all regarding this situation more info might be helpful):-

However on the basis of what you have said, you appear to have a lease and maybe own the house separate from the land.

A Thai would of course most likely wish to take over the freehold of the land and perhaps the house.

So you would be 'selling' (or rather forgoing / scrapping) the remainder of the lease to the buyer and perhaps selling the house to them. The current landowner would be selling the freehold to them.

However what is that really worth?

The current landowner is going to want to be paid and depending on their attitude I would suggest that you are going to get the (much) smaller percentage.

If I am misunderstanding apologoes and please clarify???

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If I am understanding correctly (not clear exactly whats in your contract if at all regarding this situation more info might be helpful):-

However on the basis of what you have said, you appear to have a lease and maybe own the house separate from the land.

A Thai would of course most likely wish to take over the freehold of the land and perhaps the house.

So you would be 'selling' (or rather forgoing / scrapping) the remainder of the lease to the buyer and perhaps selling the house to them. The current landowner would be selling the freehold to them.

However what is that really worth?

The current landowner is going to want to be paid and depending on their attitude I would suggest that you are going to get the (much) smaller percentage.

If I am misunderstanding apologoes and please clarify???

Yes i have a 30 yr lease on the land and own only the house like most foreigners.

You might be right. If the lease has a remaining duration of 25 years(5 years of usage), perhaps the landowner wants to be compensated for

the 5 yr of usage, which is 5/30 or 16% of the land price excluding the house.

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If I am understanding correctly (not clear exactly whats in your contract if at all regarding this situation more info might be helpful):-

However on the basis of what you have said, you appear to have a lease and maybe own the house separate from the land.

A Thai would of course most likely wish to take over the freehold of the land and perhaps the house.

So you would be 'selling' (or rather forgoing / scrapping) the remainder of the lease to the buyer and perhaps selling the house to them. The current landowner would be selling the freehold to them.

However what is that really worth?

The current landowner is going to want to be paid and depending on their attitude I would suggest that you are going to get the (much) smaller percentage.

If I am misunderstanding apologoes and please clarify???

Yes i have a 30 yr lease on the land and own only the house like most foreigners.

You might be right. If the lease has a remaining duration of 25 years(5 years of usage), perhaps the landowner wants to be compensated for

the 5 yr of usage, which is 5/30 or 16% of the land price excluding the house.

sorry not what i meant - the landowner will want paying for the freehold (by the new thai buyer) with some money for the farang to vacate early, rather than a refund for the remainder of the lease?

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Like some of you, i have a house & land under a 30 year lease contract, and recently, after a few years, i have been asked to pay an annual property land tax of a few K baht. Our contracts are drafted with the right to sell to anybody. A few of my farang neighbours had sold their house to Thais either at market price or at a discount when they need cash, with the landowner's approval. I dont think any locals will take over the remaining lease of the 30 year contract, so it's probably reverted back to freehold status for Thais.

So instead of the hassle of re-negotiation with the landowner(assuming still alive & didnt transfer to the children) just before the 30 years is up,

it's possible to sell the house & land, say after 10-20 years, to any willing Thai buyer, again with the approval & kindness of the landowner.

The house, being yours, can be sold to anybody.

The land, not being yours, cannot be sold. Presumably you have forked out the 30 years in advance on the lease, and, although there is often a clause allowing you to sell the land to another Thai, this will require the signature of the Thai land owner. Why would he want to sign "his" land away? He, or his family, still own the land and, at the end of the lease, will be in the almighty position of saying how much the next thirty year leasehold will cost. And don't forget, he already has banked the price of the lease for the next thirty years. No real reason for him to do anything in terms of signing away his land.

The "approval & kindness" could cost you nothing or a lot. There is no clear answer until you start negotiations with him, if he proves difficult and for some reason you have to move away, then I suspect you will not get much back directly. But, of course, the lease is still valid, so maybe you could find a renter for the property?

Surely the land owner is responsible for the property tax, as indeed for the tax payable on the lease?

Oh the joys of trying to own real estate in Thailand. No idea why people bother, to be honest.

Edited by 12DrinkMore
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If I am understanding correctly (not clear exactly whats in your contract if at all regarding this situation more info might be helpful):-

However on the basis of what you have said, you appear to have a lease and maybe own the house separate from the land.

A Thai would of course most likely wish to take over the freehold of the land and perhaps the house.

So you would be 'selling' (or rather forgoing / scrapping) the remainder of the lease to the buyer and perhaps selling the house to them. The current landowner would be selling the freehold to them.

However what is that really worth?

The current landowner is going to want to be paid and depending on their attitude I would suggest that you are going to get the (much) smaller percentage.

If I am misunderstanding apologoes and please clarify???

Yes i have a 30 yr lease on the land and own only the house like most foreigners.

You might be right. If the lease has a remaining duration of 25 years(5 years of usage), perhaps the landowner wants to be compensated for

the 5 yr of usage, which is 5/30 or 16% of the land price excluding the house.

sorry not what i meant - the landowner will want paying for the freehold (by the new thai buyer) with some money for the farang to vacate early, rather than a refund for the remainder of the lease?

Yes i get what u meant. I meant if the landowner is greedy(in most cases), somebody (either the new thai buyer or the farang owner) may be asked to pay an amt equivalent to the no of years that the farang had stayed on the land. It may be a small amount if the farang stayed only a few years or a large amount if he stayed for 10-20 years.

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Like some of you, i have a house & land under a 30 year lease contract, and recently, after a few years, i have been asked to pay an annual property land tax of a few K baht. Our contracts are drafted with the right to sell to anybody. A few of my farang neighbours had sold their house to Thais either at market price or at a discount when they need cash, with the landowner's approval. I dont think any locals will take over the remaining lease of the 30 year contract, so it's probably reverted back to freehold status for Thais.

So instead of the hassle of re-negotiation with the landowner(assuming still alive & didnt transfer to the children) just before the 30 years is up,

it's possible to sell the house & land, say after 10-20 years, to any willing Thai buyer, again with the approval & kindness of the landowner.

The house, being yours, can be sold to anybody.

The land, not being yours, cannot be sold. Presumably you have forked out the 30 years in advance on the lease, and, although there is often a clause allowing you to sell the land to another Thai, this will require the signature of the Thai land owner. Why would he want to sign "his" land away? He, or his family, still own the land and, at the end of the lease, will be in the almighty position of saying how much the next thirty year leasehold will cost. And don't forget, he already has banked the price of the lease for the next thirty years. No real reason for him to do anything in terms of signing away his land.

The "approval & kindness" could cost you nothing or a lot. There is no clear answer until you start negotiations with him, if he proves difficult and for some reason you have to move away, then I suspect you will not get much back directly. But, of course, the lease is still valid, so maybe you could find a renter for the property?

Surely the land owner is responsible for the property tax, as indeed for the tax payable on the lease?

Oh the joys of trying to own real estate in Thailand. No idea why people bother, to be honest.

I havent figured why the land owner wants us to pay the annual property tax of a few K baht. Perhaps to avoid the little hassle for the 20+ years until the 30 lease is up OR to wash the hands off the property (dream)? I really dont know....anyone care to comment?

You have a point. Perhaps the farang owners in my moobahn did pay the landowner a small % of the sale price after they had sold to the Thai buyers.

Well, in some parts of Thailand, for the price of a 30 year leasehold land & house, you can only get a small freehold studio apartment/condominium which might not be so convenient if you have a family.

Any hse owner or condo owners care to share your views on this?

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The owner wants you to pay the property tax because he's tight.

You can assign the lease and transfer the house to anyone you choose, the problem though is what the assignee will pay. (if they will pay anything at all). Bear in mind that you are selling a depreciating interest in land. Oh sure land values may rise during those 20 years, which might offset some of that loss but as you get closer to the lease expiry date, the value of that lease goes South, quick.

The reason is because at the end of the term the owner will (unless dense) ask for remuneration for the new lease term, at the then market value. Sure you can refuse to pay, claim that it was in the contract etc but they can simply refuse to renew, because there is no legislated security of tenure beyond the initial contractual term.

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Read quiksilva's post twice, everybody.

A lease is a piece of paper giving someone the right to occupy the land for 30 years.

A piece of paper diminishing in value every day of the 30 years until it has absolutely no resale value.

Its maximum value would be within its first 3 years, after that its downhill steeper and steeper.

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