Inheritance?

[Khon Baan Nok]

I have three sons in the US. I would like to retire in Thailand, but I do not want to live in a condo.

I am aware, I think, of the mechanisms through which I could acquire a non-condo property, but none of them seem to offer a reasonably simple and secure mechanism of ensuring that when I die, the investment would be transferable to them. Is there a way of doing that without going condo?

Thanks for your advice.

S.

[ronz28]

Easy. Rent don't buy a house. Leave your money invested in diversified investments. A home purchase in Thailand, concentrates what may be a large portion of your wealth into a risky property investment that could be taken from you one way or the other. You know Farangs can't own land in Thailand so bottom line is you can't really own a house that would really be yours.

There are too many ways a house investment in Thailand may not even last your lifetime much less get passed on to others. Could you afford to totally lose your investment in a house?

[torrenova]

There used to be a way, if you paid something like Bt40m or so, that you could own 1 rai or something and build a house on it. Or perhaps it was put some seriously large amount of baht in government bonds for X years ? Anyone remember ?

You don't say where you want to live or what standard you want but in Pattaya (as I know it best), around $100,000 buys a very nice 3 bed 2/3 bath detached house with all the western trimmings. Renting that same house would cost about Bt15,000 to Bt20,000 a month. However, you can get a 2 bed 2 bath detached house with some garden on rental for around Bt10,000 to Bt12,000, less on a multi year lease.

So to keep things simple mathematically and with rent on the $100k house at Bt15,000 (which is probably discountable to about Bt11,000 bearing in mind depreciation of fixtures and fittings, service charges, insurance, company costs and maintenance etc.) you would be paying about $300 (net) per month (though you would have to pay the Bt15,000). Clear ?

So your net loss at Bt11,000 net of costs (rent per month) is about $300 a month or $3600 a year. You keep your $100,000 and if you can generate 3.6% per annum, you live rent free.

Sure you lose any capital appreciation and save any depreciation.

It is a no brainer really.

In Buriram I can rent a 3 bed, 2 bath detached house with quite large garden on a corner plot for Bt4000 a month or a little over $100 a month.

Rent, don't buy.

Condos can be a better bet but you could even buy a condo and rent it out and use the rental money to rent yourself a house !

[pkrv]

I have three sons in the US. I would like to retire in Thailand, but I do not want to live in a condo.

I am aware, I think, of the mechanisms through which I could acquire a non-condo property, but none of them seem to offer a reasonably simple and secure mechanism of ensuring that when I die, the investment would be transferable to them. Is there a way of doing that without going condo?

Thanks for your advice.

S.

No.

[thaiwanderer]

use of an offshore company can achieve the inheritance aim in a perfectly legal way

[Naam]

use of an offshore company can achieve the inheritance aim in a perfectly legal way

no can do!

[thaiwanderer]

use of an offshore company can achieve the inheritance aim in a perfectly legal way

no can do!

care to explain why not?

[donx]

use of an offshore company can achieve the inheritance aim in a perfectly legal way

no can do!

care to explain why not?

I believe that what Naam is saying is that an offshore company can't own land with a house on it. Only a Thai limited company can be the owner of land with a house on it. Since the OP seems to only be interested in owning land with a house on it, the use of an offshore company doesn't help.

[philliphn]

RENT DON"T BUY!

[unforgiven]

Easy. Rent don't buy a house. Leave your money invested in diversified investments. A home purchase in Thailand, concentrates what may be a large portion of your wealth into a risky property investment that could be taken from you one way or the other. You know Farangs can't own land in Thailand so bottom line is you can't really own a house that would really be yours.

There are too many ways a house investment in Thailand may not even last your lifetime much less get passed on to others. Could you afford to totally lose your investment in a house?

very wise comment.Considering all aspects renting is the only way to go and unlike in the west the rent is a miniscule fraction of the buying price. I've been here 20 years or so and I can't understand why any falangs buy. I've seen so many horror stories

[thaiwanderer]

use of an offshore company can achieve the inheritance aim in a perfectly legal way

no can do!

care to explain why not?

I believe that what Naam is saying is that an offshore company can't own land with a house on it. Only a Thai limited company can be the owner of land with a house on it. Since the OP seems to only be interested in owning land with a house on it, the use of an offshore company doesn't help.

I hope Naam clarifies if this is not what was meant.

The OP says he thinks he is aware of the mechanisms to acquire a non-condo property and was asking about the inheritance aspect. Whatever the mechanism he chooses the additional use of an offshore company (rather than holding his interest/s in his own name) can allow that interest to be transferred to his sons.

Whether the particular mechanism he chooses is any good for securing 'his' interest in the first place (whether in his personal name or in the name of an offshore company) is another matter, and may have been discussed occasionally on this forum.

[pkrv]

If this is an inheritance issue passing on freehold property to his sons, which BTW IMO is a very brave concept to consider, because he is acting in a grown up manner and considering his own mortality. Then realistically a change in direction is required. There are condos, then THERE ARE CONDOS and then again, they (almost) all have penthouses. Those penthouses are exactly that - a house on top of very large foundations, often with private access. All land and facilities are looked after for you and you can own it outright. The guy obviously has the ability to adapt, and probably should IMO set more realistic objectives.

[geriatrickid]

The problem that would arise would be the disposal of assets. Maybe 1 son would want to relocate, another would want to rent it out and another to sell it outright. Recipe for fighting. The best option is to set something up either in a trust or have it in an liquid asset. My father has everything spelled out in his will and it can't be contested. Considering the greed & stupidity of some of my siblings, my father was wise to do it that way. He also took into account tax impact. The best inheritance you can leave is one that doesn't provoke warfare, and trust me it happens in every family, especially if the beneficiaries are older.

On a personal note, Rent. Don't buy. Not now, anyway.

[pkrv]

The problem that would arise would be the disposal of assets. Maybe 1 son would want to relocate, another would want to rent it out and another to sell it outright. Recipe for fighting. The best option is to set something up either in a trust or have it in an liquid asset. My father has everything spelled out in his will and it can't be contested. Considering the greed & stupidity of some of my siblings, my father was wise to do it that way. He also took into account tax impact. The best inheritance you can leave is one that doesn't provoke warfare, and trust me it happens in every family, especially if the beneficiaries are older.

On a personal note, Rent. Don't buy. Not now, anyway.

What a great and open post. Yes many parents from that generation actually believed in the concept of gifts, that kind of stuff. Actually that was deeply abusive; gifts were given consciously or subconsciously that varied. I actually know a set of twins, one who was given a writing set on his 21st the other son (not an identical twin) a car, how sick is that?

I am battling with similar problems with my own dad. He seemed intent on sowing family discord so after I got really, really annoyed his children now only except <edit EQUAL amounts of verified> cash on Birthdays and Christmas and this extends to include grand children. It really pisses him off and gifts are decreasing every year and inheritance tax liabilities increase every year. Yet 'he wants to help' And you know what, that was what that generation was about.

For me it is about teaching ALL my nephews and nieces the value of money via their own accounts and managing them, themselves (except the big ones they don't yet know about). And you know what they are getting pretty bloody good at it!

So yes one property between three sons, yes nail it down. All may not be as it seems....

Great post!

Edited April 15, 2009 by pkrv

[ballbreaker]

Easy. Rent don't buy a house. Leave your money invested in diversified investments. A home purchase in Thailand, concentrates what may be a large portion of your wealth into a risky property investment that could be taken from you one way or the other. You know Farangs can't own land in Thailand so bottom line is you can't really own a house that would really be yours.

There are too many ways a house investment in Thailand may not even last your lifetime much less get passed on to others. Could you afford to totally lose your investment in a house?

Could not agree more.

[eljeque]

Ok, you have passed away, and now there is a property here which was owned by you.

Now, what happens?

Which one of your children is going to take the time off work to come over here and get everything going to sell the property?

After one does that, who is going to look after the sale of the property?

I would hope that none of your children would trust the Pattaya agents to have their best interests at heart.

Buying property here to leave to your children is giving them a headache in the future.

As many of the other posters have said..... RENT!!

[pkrv]

Ok, you have passed away, and now there is a property here which was owned by you.

Now, what happens?

Which one of your children is going to take the time off work to come over here and get everything going to sell the property?

After one does that, who is going to look after the sale of the property?

I would hope that none of your children would trust the Pattaya agents to have their best interests at heart.

Buying property here to leave to your children is giving them a headache in the future.

As many of the other posters have said..... RENT!!

Yes in a way I agree, especially with land/houses. And indeed everything you have said is valid and indeed food for thought. It depends on his kids. An eye opener to the bigger world? You can't always protect them, they have to grow up someday. And they will eventually judge the parents, and as should be, should surpass them.

Edited April 17, 2009 by pkrv

[kaxper]

there is no way for you to leave a landed property in thailand to your son without creating legal issues that probably are not worth it for you son to clear after you pass on.

if you really don't trust yourself with cash in the bank today, maybe you can synthetically create what you want - buy a condo and put it in your AND your son's name, rent it and use the condo rental income to rent your house.

if you die, your son can inherit legal title to the condo without going through probate and make legal changes to the lease agreement so that the rent income goes to his account.

the landlord from the house you rent will just assume your rent is void, and all your son have to do in come collect your stuff.

[thaiwanderer]

there is no way for you to leave a landed property in thailand to your son without creating legal issues that probably are not worth it for you son to clear after you pass on.

if you really don't trust yourself with cash in the bank today, maybe you can synthetically create what you want - buy a condo and put it in your AND your son's name, rent it and use the condo rental income to rent your house.

if you die, your son can inherit legal title to the condo without going through probate and make legal changes to the lease agreement so that the rent income goes to his account.

the landlord from the house you rent will just assume your rent is void, and all your son have to do in come collect your stuff.

use of an offshore company can resolve this so that the only 'issues' are the same as the OP may face himself - with no additional legal difficulty for his son upon his passing, also tax advantages apply

whilst i understand the suggestions posters have made here about ensuring the son's inheritance is preserved as much as possible this cannot be the only objective when planning for one's own death - yes make as best provision as you can / wish for your dependants / next of kin etc. but at some point this does have to balanced against wishing to enjoy the benefit of your own money yourself (and can be done without squandering it if you so wish)

[pkrv]

maybe you can synthetically create what you want - buy a condo and put it in your AND your son's name, rent it and use the condo rental income to rent your house.

IMO impressive - Good thought process, and it will technically work, with work. It will give him the house he wishes for and protect for the future. Though in this case I think it is three sons. But none the less should do the trick.

[LivinLOS]

use of an offshore company can achieve the inheritance aim in a perfectly legal way

no can do!

care to explain why not?

I believe that what Naam is saying is that an offshore company can't own land with a house on it. Only a Thai limited company can be the owner of land with a house on it. Since the OP seems to only be interested in owning land with a house on it, the use of an offshore company doesn't help.

Yes but a non Thai company can own 49% of the shares in a Thai company etc.. That has the usual pitfalls but does have the added bonus that if theres a sale of the on Thai company registered overseas the controlling interest / voting shares of the Thai company transfer totally outside the Thai domain..

I know a 65m baht villa that this exact process was used on and that recently changed hands.. No Thai declarations, taxes, or interferance in the transaction yet still legal (if you discount the usual Thai company nominee issues)..

[Khon Baan Nok]

I'm the OP, and just wanted to thank you all for the inputs. I am following the thread closely. Bottom line is that my impression is that there is no way--I don't understand the "offshore" solution clearly--I could accomplish my purpose without either leaving my three sons a lost asset or a convoluted problem that they would have great difficulty in ever resolving.

At this point the best option seems to be the rental suggestion, or consider another country, such as Malaysia, in which I believe there are few obstacles.

Thanks to all for having contributed, and I welcome any additional comments. I have not yet met any non-Thai property owner who has personal experience of having managed this issue. If any of you have, please let me know.

Cheers,

Sandy

[thaiwanderer]

Yes but a non Thai company can own 49% of the shares in a Thai company etc.. That has the usual pitfalls but does have the added bonus that if theres a sale of the on Thai company registered overseas the controlling interest / voting shares of the Thai company transfer totally outside the Thai domain..

I know a 65m baht villa that this exact process was used on and that recently changed hands.. No Thai declarations, taxes, or interferance in the transaction yet still legal (if you discount the usual Thai company nominee issues)..

yep, and my further comments apply

the thai land owning company, the offshore company/ies controlling it and the offshore company as leaseholder need never die, transfers (inheritance or sale) are far easier and tax efficient (also less likely to ever come under scrutiny)

[torrenova]

Yes but a non Thai company can own 49% of the shares in a Thai company etc.. That has the usual pitfalls but does have the added bonus that if theres a sale of the on Thai company registered overseas the controlling interest / voting shares of the Thai company transfer totally outside the Thai domain..

I know a 65m baht villa that this exact process was used on and that recently changed hands.. No Thai declarations, taxes, or interferance in the transaction yet still legal (if you discount the usual Thai company nominee issues)..

But at 40m, all this rubbish about can and cannot goes out of the window I understand However, if you have that money to invest in a house in a 3rd world country you obviously have plenty of cash and can afford the best legal advice.

[LivinLOS]

Yes but a non Thai company can own 49% of the shares in a Thai company etc.. That has the usual pitfalls but does have the added bonus that if theres a sale of the on Thai company registered overseas the controlling interest / voting shares of the Thai company transfer totally outside the Thai domain..

I know a 65m baht villa that this exact process was used on and that recently changed hands.. No Thai declarations, taxes, or interferance in the transaction yet still legal (if you discount the usual Thai company nominee issues)..

But at 40m, all this rubbish about can and cannot goes out of the window I understand However, if you have that money to invest in a house in a 3rd world country you obviously have plenty of cash and can afford the best legal advice.

Lots of people have quoted me this law.. None have ever been able to back it up.. others have told me you can get PR from bringing in 40m (I even know someone who did it a decade ago) but again its not available to me now to the best of my knowledge.

If I can bring 40m into the country and get either PR or legal ownership of one rai of land.. And still have some control over my 40m.. I am all ears !! Not rumour or 'bloke down the pub said' tho.. Under what legal structure does this work ??

[Old Croc]

A question:

Most here advise rental because a non-Thai citizen can never own land.

And there is an oft quoted maxim - "never invest more in Thailand than you can afford to walk away from".

And yet there is another excellent thread on this forum, where members are proudly showing photos of their houses all over Thailand. Some of which could only be described as palaces or quasi hotels such is their size, opulance and cost.

Are all these people so rich they can afford to walk away from these incredibly expensive mansions? or:

Are they so naive that they believe they will never be divorced from their Thai spouse and therefore unlikely to lose all? or:

Have they found a way to get around the rules against owning land and, if so, could they advise others of the secret?

[thaiwanderer]

A question:

Most here advise rental because a non-Thai citizen can never own land.

And there is an oft quoted maxim - "never invest more in Thailand than you can afford to walk away from".

And yet there is another excellent thread on this forum, where members are proudly showing photos of their houses all over Thailand. Some of which could only be described as palaces or quasi hotels such is their size, opulance and cost.

Are all these people so rich they can afford to walk away from these incredibly expensive mansions? or:

Are they so naive that they believe they will never be divorced from their Thai spouse and therefore unlikely to lose all? or:

Have they found a way to get around the rules against owning land and, if so, could they advise others of the secret?

personal choice, risk appetite, ignorance, affluence or combination thereof

[thaiwanderer]

Yes but a non Thai company can own 49% of the shares in a Thai company etc.. That has the usual pitfalls but does have the added bonus that if theres a sale of the on Thai company registered overseas the controlling interest / voting shares of the Thai company transfer totally outside the Thai domain..

I know a 65m baht villa that this exact process was used on and that recently changed hands.. No Thai declarations, taxes, or interferance in the transaction yet still legal (if you discount the usual Thai company nominee issues)..

But at 40m, all this rubbish about can and cannot goes out of the window I understand However, if you have that money to invest in a house in a 3rd world country you obviously have plenty of cash and can afford the best legal advice.

Lots of people have quoted me this law.. None have ever been able to back it up.. others have told me you can get PR from bringing in 40m (I even know someone who did it a decade ago) but again its not available to me now to the best of my knowledge.

If I can bring 40m into the country and get either PR or legal ownership of one rai of land.. And still have some control over my 40m.. I am all ears !! Not rumour or 'bloke down the pub said' tho.. Under what legal structure does this work ??

The THB40m exception is perfectly valid via Land Code Amendment Act No. 8 BE 2542 and subsequent ministerial regulations. There is also provisions for exceptions for other investments. However it simply is not a viable option in order to secure land. Its subject to numerous conditions not least ownership lasting the life of the investment, restrictions on type of investment, ministerial approval etc. If you wish to look into it further by all means do so but unless the investment itself is what you intend doing its not worth it and the 1 rai is merely a very small additional benefit that may or may not be granted.

There are far easier ways of securing effective ownership of more land for less exposure with less hassles. The pitfalls of these can be mitigated and avoided but never 100% but then again even if successful with BOI even that is not 100% as only for the life of the investment, possibility of future changes in the law and the simple fact that you will attract far more graft seekers making that much noise.

[donx]

A question:

Most here advise rental because a non-Thai citizen can never own land.

And there is an oft quoted maxim - "never invest more in Thailand than you can afford to walk away from".

And yet there is another excellent thread on this forum, where members are proudly showing photos of their houses all over Thailand. Some of which could only be described as palaces or quasi hotels such is their size, opulance and cost.

Are all these people so rich they can afford to walk away from these incredibly expensive mansions? or:

Are they so naive that they believe they will never be divorced from their Thai spouse and therefore unlikely to lose all? or:

Have they found a way to get around the rules against owning land and, if so, could they advise others of the secret?

personal choice, risk appetite, ignorance, affluence or combination thereof

I am one of those that posted on that thread. As you can see from my posts it is not anywhere close to being in the same league as most of the other dwellings. I know that some of them do have a Thai company as the owner. Others, like me, have the Thai partner as owner. Still others will employ either a 30 year lease or usufruct to retain some level of ownership.

[thaiwanderer]

the price of the dwelling even when developer sold typically has little to do with the robustness of the legal structure