Buying Land

[e-rik]

I have a thai girlfriend.. I have been reading quite a lot here, there is too many options how to do it (through a company, etc.) but what about places and prices for example close to beaches or...?

If we marry and have children... how to protect my investments if the relationship is over?

thanks!

[LaoPo]

Edited out by RDN:

// snide remarks are not helpful, LaoPo. Let's give the guy - and many others I suspect - some useful advice!

Edited March 27, 2005 by RDN

[andy50]

I have a thai girlfriend.. I have been reading quite a lot here, there is too many options how to do it (through a company, etc.) but what about places and prices for example close to beaches or...?

If we marry and have children... how to protect my investments if the relationship is over?

thanks!

<{POST_SNAPBACK}>

if you live in los with a thai g/f/ wife and it goes tits up, you lose everything ,

get everything on a mortgage then she cant boot you out ,as she wont be able to pay the payments on her own

[Sumitr Man]

...

as she wont be able to pay the payments on her own

In which case, the bank has likely asked you to sign a guarantee - and under the Civil and Commercial Code of Thailand a guarantee is not extinguished until such time as the debt is.

Hardly the wisest move: there you are, no wife/gf, no house, and guarantee on a house you know she neither can afford to repay, nor has incentive to pay...

SM

[RDN]

...

as she wont be able to pay the payments on her own

In which case, the bank has likely asked you to sign a guarantee - and under the Civil and Commercial Code of Thailand a guarantee is not extinguished until such time as the debt is.

Hardly the wisest move: there you are, no wife/gf, no house, and guarantee on a house you know she neither can afford to repay, nor has incentive to pay...

SM

<{POST_SNAPBACK}>

Why "no house"? If you both sign a legal document stating that "if the relationship ends, she must leave the house and must allow you to live in it for as long as you like".

[Sumitr Man]

RDN:

2 immediate problems I can think of with that:

(1) the house is subject to a mortgage (in the post prior to mine) - therefore the lender's authorisation to rent the property would be needed;

(2) any lease agreement over 3 years in length needs to be registered with the Land Dept to be enforceable. As there is already a lien on the house (the mortgage), the lending officer of the bank will likely have to come down with you.

Now, assuming you have a lender who is willing to allow a mortgage property to be leased for, say, 30 years - and that you arrange the financing so that each month your rental is equal to the mortgage repayment amount, which you pay directly to the mortgage lender, rather than the gf (who may notbe inclined to pay-on such sum if you split up), it may work.

All that would remain then would be whether or not you could enforce an agreement with wording to such an effect in the Thai courts - on which I'm not entirely sure and would need to do some research.

Of course, the downside for you gf of having such an arrangement is that in the good days (when you are lovey dovey), shell be subject to income tax on the rentals payable - of which part thereof could set-off against the tax deduxtion benefit, but it is likely she would be subject to some income tax. The income tax can be hidden where the house is fully paid up and no third party is involved, this does become harder when you have a third party lender to whom you have declared the income as consideration for the lending.

[aletta]

Before i had children i used to think occasionally about the fact everthing is in the wife's name but that all changed with children as it will be theirs one day even if the relationship goes belly up.

[aletta]

RDN,don't you think it might be a good idea if newbies were advised to maybe make twenty or thirty posts before asking deep questions and then they might get some constructive answers,rather than being shot down as a troll.

[Doctor John]

I was also thinking at one time about the Company route, then I thought " What happens if the laws change and my company has to show what the company actually does, and pay tax and show that it's not just a front for property ownership, even though it is.................I would have sleepless nights over that.

So, it's all in the wifes name, no sleepless nights worrying about what will happen if this or that happens, and if it all goes tits up, so what, it's only a house, I work and earn a house in 3 months, so it's no big deal, I do have my Pick up in my name though, so at least I will be able to drive away into the sunset with my Golf clubs in the back.

That's just me though, some guys don't work and for them I guess things are different.

Edited April 1, 2005 by Doctor John

[Thaicoon]

Before i had children i used to think occasionally about the fact everthing is in the wife's name but that all changed with children as it will be theirs one day even if the relationship goes belly up.

<{POST_SNAPBACK}>

Well said aletta, me the same, got a number of propertys and land, if things ever go belly up, the kids will benifit, i am just doing things as an investment for the future.

[Sir Burr]

What's wrong with putting house and land in wife's name, then take out a thirty year lease in your own name and have it notated on the land paper and at the land registry.

This way, she cannot use the land title as security on a loan, can't kick you out and if she dies (God forbid), her heirs can't kick you out either. This is what I have done. Also, I have made a legal contract that if we both decide to annul the lease, then she must pay me 5,000,000 baht. This is to cover you between when the lease is anulled, and when the land and house is sold to a third party. You might say I'm not trusting, but I sleep well at night.

Edited April 1, 2005 by Sir Burr

[Sumitr Man]

This way, she cannot use the land title as security on a loan

Not sure who told you this, but it is fact wrong. She can use the property as security on a loan, indeed she can even sell the property. However, as a sitting tenant, you cannot be removed from the property if (1) the lender wants to foreclose and sell; or (2) the purchaser wanted to move in and live in the property.

But, that doesn't mean there's anything from stopping your wife doing either of these actions - beyond the commercial decision by most not to bother dealing with sitting tenants: who are a pain in the arse for a long time to come

SM

Edited April 1, 2005 by Sumitr Man

[Sir Burr]

This way, she cannot use the land title as security on a loan

Not sure who told you this, but it is fact wrong. She can use the property as security on a loan, indeed she can even sell the property. However, as a sitting tenant, you cannot be removed from the property if (1) the lender wants to foreclose and sell; or (2) the purchaser wanted to move in and live in the property.

But, that doesn't mean there's anything from stopping your wife doing either of these actions - beyond the commercial decision by most not to bother dealing with sitting tenants: who are a pain in the arse for a long time to come

SM

You are right, but the main lenders, ie. banks and loan sharks will not accept a title deed that has a sitting tennant. As you say, it is just not worth the hastle for them.

[Jeff1]

RDN,don't you think it might be a good idea if newbies were advised to maybe make twenty or thirty posts before asking deep questions and then they might get some constructive answers,rather than being shot down as a troll.

So its better to make 20-30 stupid posts and then ask a " deep question "

My , what would we think then ? There not all trolls , just new . You know what I mean ?

[RDN]

RDN,don't you think it might be a good idea if newbies were advised to maybe make twenty or thirty posts before asking deep questions and then they might get some constructive answers,rather than being shot down as a troll.

<{POST_SNAPBACK}>

I know what you mean, but that would be really difficult to enforce. As it is, there's a bit of a competition going between us mods to "spot the troll" so I don't think many trolls get passed us (Now there's an invitation for would-be trolls, eh?)

But this topic does interest me as I've seen a rather nice house for sale in Phuket - but a bit pricey. It's the sort of price that I would go for if it was in MY name, but otherwise... no. I just can't risk it.

[RDN]

I was also thinking at one time about the Company route, then I thought " What happens if the laws change and my company has to show what the company actually does, and pay tax and show that it's not just a front for property ownership, even though it is.................I would have sleepless nights over that.

So, it's all in the wifes name, no sleepless nights worrying about what will happen if this or that happens, and if it all goes tits up, so what, it's only a house, I work and earn a house in 3 months, so it's no big deal, I do have my Pick up in my name though, so at least I will be able to drive away into the sunset with my Golf clubs in the back.     

That's just me though, some guys don't work and for them I guess things are different. 

<{POST_SNAPBACK}>

I, too, don't like the company route. Everyone can see it's just a way around the legislation, and laws can change easily.

I'm in a different boat - being retired - so can't make up any losses by working harder or longer so have to make 100% safe decisions. Maybe coming to Thailand wasn't one of them?

I always thought I'd rent forever, but when you see the fantastic houses available, it makes you think about owning.

[RDN]

What's wrong with putting house and land in wife's name, then take out a thirty year lease in your own name and have it notated on the land paper and at the land registry.

This way, she cannot use the land title as security on a loan, can't kick you out and if she dies (God forbid), her heirs can't kick you out either. This is what I have done. Also, I have made a legal contract that if we both decide to annul the lease, then she must pay me 5,000,000 baht. This is to cover you between when the lease is anulled, and when the land and house is sold to a third party. You might say I'm not trusting, but I sleep well at night.

<{POST_SNAPBACK}>

In matters like this, it is important to put all the "lovey dovey" stuff aside and think of the law. Looks like you have!

The sooner we get together for that beer and curry, the better! I'm going Isaan way on the 9th - maybe we can get together on the 8th.

[Dakhar]

I am planning on doing the co. route... But the co. really will be legitimate. I want to own town houses and rent them out. Is this plan a poor plan....?

[Gary A]

The law doesn't have to be changed. It is already illegal for a farang to own a house through a bogus company. I think the only reason the Thai government hasn't enforced the law is that it would result in a huge glut of houses on the market with NO buyers.

We can only hope the law will be changed as it has been with condo ownership. Personally I would NEVER take the chance. I too am retired and can not afford any major mistakes at this point. I live in my girlfriends house and have westernized it to suit myself but it is nothing I couldn't walk away from tomorrow.

I was also thinking at one time about the Company route, then I thought " What happens if the laws change and my company has to show what the company actually does, and pay tax and show that it's not just a front for property ownership, even though it is.................I would have sleepless nights over that.

So, it's all in the wifes name, no sleepless nights worrying about what will happen if this or that happens, and if it all goes tits up, so what, it's only a house, I work and earn a house in 3 months, so it's no big deal, I do have my Pick up in my name though, so at least I will be able to drive away into the sunset with my Golf clubs in the back.     

That's just me though, some guys don't work and for them I guess things are different.  

<{POST_SNAPBACK}>

I, too, don't like the company route. Everyone can see it's just a way around the legislation, and laws can change easily.

I'm in a different boat - being retired - so can't make up any losses by working harder or longer so have to make 100% safe decisions. Maybe coming to Thailand wasn't one of them?

I always thought I'd rent forever, but when you see the fantastic houses available, it makes you think about owning.

<{POST_SNAPBACK}>

[stevehaigh]

The law doesn't have to be changed. It is already illegal for a farang to own a house through a bogus company. I think the only reason the Thai government hasn't enforced the law is that it would result in a huge glut of houses on the market with NO buyers.

why do you think that? so long as you are set up correctly by your lawyer, what's to stop your company owning land? OK, it's prabably best if your company does some kind of business transaction every year and pays some tax. Or am i missing something?

Also if the law changes ot the goverment clamps down on inactive, property owning companies, what do you think they whould do? maybe force you to sell it to a thai person. so you sell/donate it to your wife/girlfirend and lease it back and you are in no worse shape than if you did that in the first place.

Edited April 2, 2005 by stevehaigh

[stevehaigh]

something else to remember about the lease idea. i found this on a web site:

If you are married to a Thai lady and provide her with the funds to purchase land, you will have to sign a disclaimer stating that the money did not come from abroad and that you assert that the property is the separate property of your wife and that you acknowledge that you have absolutely no rights or interest in the property. This is in Thai and signed at the Land Registry Office, most people do not realize what they are signing.

[Sumitr Man]

Steve:

Although I have NEVER heard of it happening, strictly speaking, under the letter of the law, if you are found to be owning land in contravention of Thai law, you are subject to forfeiture of the land - not an enforced sale. I.E. you give it away to the Thai government.

This is one more reason why you should never invest more in a land purchase than you can afford to lose.

To those of you have retired and don't want to risk losing your investment, I have heard of a structure whereby the property development company retains ownership of the land and leases this to purchasers for 30 years with the sale of the house. The downside of this structure is you have to buy where the property development company develops land, rather than anywhere, but I have not been able to find any fault with the structure.

SM

[RDN]

...To those of you have retired and don't want to risk losing your investment, I have heard of a structure whereby the property development company retains ownership of the land and leases this to purchasers for 30 years with the sale of the house. The downside of this structure is you have to buy where the property development company develops land, rather than anywhere, but I have not been able to find any fault with the structure.

SM 

<{POST_SNAPBACK}>

Strange that you should mention this, because it is something that I have been thinking about - the lady who owns the land on which she is building several houses appears to be an honest person. I would rather lease the land from her for 30 years and buy the house in MY name, than get my g/f involved in any of the arrangements. I believe love and business just do not mix. Anyone else thought of doing this?

[Jeff1]

...To those of you have retired and don't want to risk losing your investment, I have heard of a structure whereby the property development company retains ownership of the land and leases this to purchasers for 30 years with the sale of the house. The downside of this structure is you have to buy where the property development company develops land, rather than anywhere, but I have not been able to find any fault with the structure.

SM 

Strange that you should mention this, because it is something that I have been thinking about - the lady who owns the land on which she is building several houses appears to be an honest person. I would rather lease the land from her for 30 years and buy the house in MY name, than get my g/f involved in any of the arrangements. I believe love and business just do not mix. Anyone else thought of doing this?

This a a very good idea . Are you sure it works ? I would like to do this but our house is paid for already . Is it only a matter of changing the paperwork in my case ?

[RDN]

...To those of you have retired and don't want to risk losing your investment, I have heard of a structure whereby the property development company retains ownership of the land and leases this to purchasers for 30 years with the sale of the house. The downside of this structure is you have to buy where the property development company develops land, rather than anywhere, but I have not been able to find any fault with the structure.

SM 

<{POST_SNAPBACK}>

Strange that you should mention this, because it is something that I have been thinking about - the lady who owns the land on which she is building several houses appears to be an honest person. I would rather lease the land from her for 30 years and buy the house in MY name, than get my g/f involved in any of the arrangements. I believe love and business just do not mix. Anyone else thought of doing this?

<{POST_SNAPBACK}>

This a a very good idea . Are you sure it works ? I would like to do this but our house is paid for already . Is it only a matter of changing the paperwork in my case ?

<{POST_SNAPBACK}>

I'm afraid I've no idea. But one thing's for sure, when the g/f finds out, you'll hear the explosion all over Thailand! Much better to do it - if it can be done - when you are unattached.

I'd still like to know if anyone has done this...

[Sumitr Man]

I know that thtis structure has been used in Phuket. The only problem that seems to exist with this structure is a tax amortization on the land rental payable where the rent for the 30 years is paid-up front. This then increases where you go the 30+30 years lease rental, with all rentals (for 60 years) paid up front.

But the structure itself does appear to be sound.

That said, I agree with your comment regarding the gfs comments on the whole thing

SM

[Gary A]

That lawyer is breaking the law when he sets up a company for the purpose of you owning a house. It is also against the law for the bogus Thai stockholders who have already signed off their shares. If those people involved in the company were ever prosecuted you would be in the soup big time. There are thousands of those companies formed and I have never heard of any of them being investigated. That's not to say some politician won't eventually raise a stink and enforce the laws. All the government would have to do is look at all the companies that pay no tax. I wouldn't take the chance.

There is also a law on the books somewhere that states that a company MUST show a profit or the company must be dissolved. That is probably not relevant to land ownership. A friend of mine had a legitimate company for the purpose of workind and his having a work permit. His wife had to fire him because they were not making enough money to pay the taxes. His wife still has the company but he is no longer an owner or even an employee.

The law doesn't have to be changed. It is already illegal for a farang to own a house through a bogus company. I think the only reason the Thai government hasn't enforced the law is that it would result in a huge glut of houses on the market with NO buyers.

why do you think that? so long as you are set up correctly by your lawyer, what's to stop your company owning land? OK, it's prabably best if your company does some kind of business transaction every year and pays some tax. Or am i missing something?

Also if the law changes ot the goverment clamps down on inactive, property owning companies, what do you think they whould do? maybe force you to sell it to a thai person. so you sell/donate it to your wife/girlfirend and lease it back and you are in no worse shape than if you did that in the first place.

<{POST_SNAPBACK}>

[Sumitr Man]

Sorry Gary, but if you lived in Thailand between 1997 and 2002 you would know that there was no requirement that a company needed to be profitable to remain operational. It may well need to remain solvent, but not profitable, per se.

On the issue of companies established solely to purchase land, you may well have a point. There is a huge question about the legailty of such an arrangement, and many, including myself, think there is a risk with such a structure. But, here's the crux of the problem, no matter what type of set-up you have vis-a-vis owning land in Thailand -if you are a forgeiner - you run a risk. OTH, there is nothing illegal with owning a house. Neither is there anything illegal with renting land. How you manage to structure this is, within limits, down to the choice of the buyer.

And, if this doesn't appeal to you, as I always say: either buy a condo or get a house in Spain!

SM

[stevehaigh]

That lawyer is breaking the law when he sets up a company for the purpose of you owning a house. It is also against the law for the bogus Thai stockholders who have already signed off their shares.

What is the source of this information? Do you have any pointers to legal references I can talk to my lawyer about?

If you are correct, this is a HUGE problem for many people, including me!

[ray23]

Steve:

Although I have NEVER heard of it happening, strictly speaking, under the letter of the law, if you are found to be owning land in contravention of Thai law, you are subject to forfeiture of the land - not an enforced sale.  I.E. you give it away to the Thai government.

This is one more reason why you should never invest more in a land purchase than you can afford to lose.

To those of you have retired and don't want to risk losing your investment, I have heard of a structure whereby the property development company retains ownership of the land and leases this to purchasers for 30 years with the sale of the house. The downside of this structure is you have to buy where the property development company develops land, rather than anywhere, but I have not been able to find any fault with the structure.

SM 

<{POST_SNAPBACK}>

Rule One: As told to me by a close friend when I first arrived, never bring anything to Thailand that you can't afford to lose.

That being said, we all have good intentions to try to make life bettter either for ourselves or our families. Just understand there is a huge risk. The best of relationship can go bad.

As I recall about twelve years ago, there was an incident wherein an entire small town on the beach in Mexico was evicted. a foriegner can't own land I believe within 100 mile of the beach ( a significant distance anyway) The truth the land was out of reach for the normal Mexican citizen, so sell to the gringos. Everyone truly believed they had found the magic answer around Mexican law. The rightful owner of the land told them thank you very much for building all this now get off my land. The last I heard they were infact evicted. Never heard that anything changed.

So I would think that unless thier is specific changes to Thai law I think Rule One applies.

Edited April 4, 2005 by ray23