A Couple Of Questions For You....

[properperson]

hi Everyone...

A couple of qestions for you...

1. As i understand it, a condiminium block has to be at least 51% Thai owned in order that foreigners can buy the remainder - Looking at the asking prices, how can the developers sell the 51% to locals ??

2. If i want to buy a house that is completed and owned (well 49% owned) by a foreigner in a Thai limited company - if i merely buy his shares in the company, will not have to pay property transfer tax, or am i getting too clever ?

Thanks

Tommy

[givenall]

1. It is true that the new condo prices are very expensive for Thais but I also know that the developers do funny thing to get around the 49-51 rules. Also the Thai with money buy many of these condos for investment and resell later. I am not sure how the government will keep track of the resells to foreigners and maintain 49-51 rules

2. I do no recommend you buy a property through the company since after sale the taxes are very high and no way to get around that. I would recommend you talk to lawyers. They have different ways for you to buy property.

They also have ways for you to take the full control of your company and get around 49-50 rules

[Bagwan]

2. I do no recommend you buy a property through the company since after sale the taxes are very high and no way to get around that.

What taxes are these? Certainly I've never paid any. One drawback is that you have to submit annual accounts for the company and this costs me 15K every year. This is counter balanced that my water bill is 260 baht every month. This because my residence is considered an asset of the company and therefore listed as commercial premises. My friend next door pays about 1500 baht every month.

[PattayaParent]

I am not sure how the government will keep track of the resells to foreigners and maintain 49-51 rules

The condo Juristic Person has to provide a statement to the land office with every sale indicating the current Farang / Thai quota.

Also it is not true that the condo has to be 51% owned by Thai in order for Farang to buy the remainder. There is no limit to the percentage that Thai can own.

[pkrv]

I am not sure how the government will keep track of the resells to foreigners and maintain 49-51 rules

The condo Juristic Person has to provide a statement to the land office with every sale indicating the current Farang / Thai quota.

Also it is not true that the condo has to be 51% owned by Thai in order for Farang to buy the remainder. There is no limit to the percentage that Thai can own.

Agreed I too forget to emphisise Thais can and do own 100% of most condominiums. Then if the condominium wishes, up to 49% (saleable space) can then be bought by Farangs. But this can be an overhead in some instances, and juristic may not be keen to support, say just 1 Farang unit, unless perhaps you spoke and wrote Thai.

Edited November 25, 2009 by pkrv

[stgrhe]

I have an academical question not directly related to the OP's questions that I wonder if someone has an answer for. After the 1998 economical collapse the Thai Condominium Act was amended which meant the also Thai women married to foreigners were given the right to purchase condominiums in their own name. But also for a limited period foreigners were also given to right to own 100% of a condominium.

Now, for these condominiums that then allowed for 100% ownership do they maintain their rights or if a unit is sold must it be sold to a Thai unless the current foreign quota is 49% or less?

[quiksilva]

1. Some times they can sometimes they can't. All depends on the product and its location.

2. In addition to the known risks of illegally holding land via a company with nominee shareholding partners. If you buy only 49% shares in the company it is true that you will not have to pay transfer costs, but you will also only hold a minority position in a company whose major partner is unknown to you. Note too that the firm's existing liabilities may also be difficult to uncover if they are not disclosed (outstanding taxes, legal cases etc). Do you trust the vendor that much?

Hopefully this should make this a clear decision, for you, but if you can not see how bad an idea that is, I doubt the owner would sell just 49% to you anyway, unless your paying 200% of the par value per share, even then if they did want their nominee to maintain control, you'd have to question their motives.

Edited November 26, 2009 by quiksilva

[Bagwan]

2. In addition to the known risks of illegally holding land via a company with nominee shareholding partners. If you buy only 49% shares in the company it is true that you will not have to pay transfer costs, but you will also only hold a minority position in a company whose major partner is unknown to you. Note too that the firm's existing liabilities may also be difficult to uncover if they are not disclosed (outstanding taxes, legal cases etc). Do you trust the vendor that much?

I could not disagree more. One of the many thousands of crackdowns (about 2003 I think) stipulated that 'ghost' companies were illegal and could not be used by farangs to own land. The estate agents (realtors) protested long and loud and the ruling made that those already using this method would be tolerated but there should be no more dodgy deals. Smiles of relief all round. Initially, and I believe on the occasion of a company take over, the remaining 51% of shares must be held by at least 7 Thais. The trick is to appoint 7 Thais as directors of the company who are not known to each other and get them to sign undated letters of resignation. After one year the requirement for 7 directors lapses and just one Thai will suffice. Therein lies a danger in that you can be outvoted so having two separate entities unknown to each other affords protection.

Similarly if you do not ask for a full set of audited up to date company accounts drawn up and signed in the presence of your legal advisor, copies of which must be lodged with the local Tax Office, you are asking for trouble. Rendering of false, inaccurate accounts is as you might guess is a very serious offence. The Land Office will tell you who the real owner of the property is and whether any outstanding loans secured by the property have been made.

My information is sourced from my friendly lawyer of long standing who is a sometime drinking partner and my accountant, a former phu yai at Pattaya Tax office.

[pkrv]

But also for a limited period foreigners were also given to right to own 100% of a condominium.

Now, for these condominiums that then allowed for 100% ownership do they maintain their rights or if a unit is sold must it be sold to a Thai unless the current foreign quota is 49% or less?

Many of us have watched this, at best information is sparse. But what does come in to the best of my knowledge is that the Farang quota that exceeded 49% did not transfer as Farang quota.

IMO a particularly stupid marketing campain in this day and age. People have access to carrier pigeons oh sorry the precursor to the internet. (Reuters)

[Robbiechiang]

I am not sure how the government will keep track of the resells to foreigners and maintain 49-51 rules

The condo Juristic Person has to provide a statement to the land office with every sale indicating the current Farang / Thai quota.

Also it is not true that the condo has to be 51% owned by Thai in order for Farang to buy the remainder. There is no limit to the percentage that Thai can own.

I may want to add. I have some experience in getting rid of the Juristic Person or Manager. All it takes is for the Juristic Office staff to be corrupted. The land office depends on the statement from the Manager. No co-owner or directors in the Condo will be able to find out if he gives false information. Who is able to check on him ? The Land Office does not have a computer that automatically updates the buy/sell and the percentage that is owned by the Thais or the Farangs. In the condo that my friend stayed, the previous Thai directors/ and even Farang directors bought lots of apartments cheap from the developer. This was during the financial crisis and the developer had to dump the properties. The buyers then asked the Juristic Manager to change this quota to Foreign quota by understating the nos of farangs ownerships.

The moral of the story. Dont get caught. That is all. Life goes on. The Juristic Manager who was voted out by the co-owners got a new job at Land and House, the last we heard. He is happy and left a very big mess at the condo. He must have made tons of money during his tenure as Juristic Manager. This is Thailand.

[richm7]

I am not sure how the government will keep track of the resells to foreigners and maintain 49-51 rules

The condo Juristic Person has to provide a statement to the land office with every sale indicating the current Farang / Thai quota.

Also it is not true that the condo has to be 51% owned by Thai in order for Farang to buy the remainder. There is no limit to the percentage that Thai can own.

Perhaps I misunderstand? There is of course no limit on Thai ownership, but a condo development definitely DOES have to be at least 51% Thai owned before a non-Thai can own a unit. Did you really mean what you said? I suspect not.

[PattayaParent]

I am not sure how the government will keep track of the resells to foreigners and maintain 49-51 rules

The condo Juristic Person has to provide a statement to the land office with every sale indicating the current Farang / Thai quota.

Also it is not true that the condo has to be 51% owned by Thai in order for Farang to buy the remainder. There is no limit to the percentage that Thai can own.

Perhaps I misunderstand? There is of course no limit on Thai ownership, but a condo development definitely DOES have to be at least 51% Thai owned before a non-Thai can own a unit. Did you really mean what you said? I suspect not.

Yes you have misunderstood.

The developer does not have to sell 51% of the units to Thais before a non-Thai can buy one as you are stating. A non-Thai can buy at any time irrespective of how many Thais have bought units so long as no more than 49% of the total condo is sold to non-Thais.