BBL Offering Condo Mortgages To Foreigners

[philmac]

as the law stands, for a foreigner to purchase a condominium unit, the funds for that purchase must be transferred from overseas to a bank in Thailand. That bank then provides the buyer with documentation to that effect to present to the Land Department for a change in title deeds upon purchase of the condo.

That may explain why BBL is only offering the loans at an overseas branch.

[hutspot]

For such low monthly payments, I think you are assuming a 20 yr (or so) mortgage term right?? I was only able to get a 10 yr mortgage term from HSBC cause Im a foreigner. Do you get longer terms from Bangkok Bank or others?

<{POST_SNAPBACK}>

I shopped at SCB and Kasikorn and due toi the fact that my partner has the part ownership and she is 28 I was able to get a 20 year mortgage but even when you in your case you had to accept a 10 year loan it would influence the repayment with around 4.000 thb per month, another way would be to discuss the possibility of a restloan on the house (not repaying the full mortgage under security of a life insurance) and to determine at that time what to do; pay in one time or take e new loan of the restamount on the original loan.

I know one thing for sure, you will have to shop around to find the bankmananger who is willing to go with your idea

[hutspot]

as the law stands, for a foreigner to purchase a condominium unit, the funds for that purchase must be transferred from overseas to a bank in Thailand. That bank then provides the buyer with documentation to that effect to present to the Land Department for a change in title deeds upon purchase of the condo.

XX this is only true when you buy CASH without a loan/mortgage

That may explain why BBL is only offering the loans at an overseas branch.

<{POST_SNAPBACK}>

XX this is when you need a loan, so both cases are different cases and yopu can therefore not compare them.

The thing is that Thai banks or for that matter financiers will loan you the money but you have to come up with some strict securities like having a steady job with a more than 50.000 thb income, having a Thai partner so they can pursue somebody in the case of not being able to repay the loan, wp, visa and preferable a residency.

BBL Singapore is basically for the market of retirees, people who have a secure income outside Thailand etc. but they are more expensive than local banks

[TokyoT]

many europeans/US expats living long term (decades) in Singapore actually become citizens  because their taxes back home are high and they feel comfortable there. Some of them are British pilots who never went home after the war. So they don't look anything like thai.

<{POST_SNAPBACK}>

US expats are taxed in the US on their worldwide income so it doesnt make a difference if the income tax rate is lower in Singapore (but there's a US$80,000 foreign income tax exclusion and also foreign tax credits which help ease the pain)

<{POST_SNAPBACK}>

Of course it matters. If you're living overseas and don't have your address listed anywhere, how is anyone going to serve you an IRS summons? Hundreds of thousands of Americans are incorporated in the Caribbean, bank in Europe, and live in Asia just for that reason.

<{POST_SNAPBACK}>

This is all fine and good as long as you never plan to return to live/work the US, and you don’t end up marring a wife from outside the US and try to get her a visa for the US. This is why even though I live outside the US and fall well under the tax exemption I still file a tax return every year. I own Uncle Sam zero tax, but I needed to provide the tax documents to support the visa for my wife.

Plus don’t you think the chances of an audit might just increase should you ever return to the US and file a tax return for the first time in say six years or so.

Also I think it might be pushing it to say hundreds of thousands of Americans are doing this already. While I am certain there are some I doubt the sum is quite that high.

[Heng]

many europeans/US expats living long term (decades) in Singapore actually become citizens  because their taxes back home are high and they feel comfortable there. Some of them are British pilots who never went home after the war. So they don't look anything like thai.

US expats are taxed in the US on their worldwide income so it doesnt make a difference if the income tax rate is lower in Singapore (but there's a US$80,000 foreign income tax exclusion and also foreign tax credits which help ease the pain)

Of course it matters. If you're living overseas and don't have your address listed anywhere, how is anyone going to serve you an IRS summons? Hundreds of thousands of Americans are incorporated in the Caribbean, bank in Europe, and live in Asia just for that reason.

This is all fine and good as long as you never plan to return to live/work the US, and you don’t end up marring a wife from outside the US and try to get her a visa for the US. This is why even though I live outside the US and fall well under the tax exemption I still file a tax return every year. I own Uncle Sam zero tax, but I needed to provide the tax documents to support the visa for my wife.

Plus don’t you think the chances of an audit might just increase should you ever return to the US and file a tax return for the first time in say six years or so.

Also I think it might be pushing it to say hundreds of thousands of Americans are doing this already. While I am certain there are some I doubt the sum is quite that high.

It is that high, and likely higher... especially if count the per capita banks/accounts of many Caribbean countries. If you just count the number of people involved Internet porn, and online casinos, I think you'd get to that figure already. And then this is yet to count those involved in more traditional high cash/low desire to report all earned revenue businesses like pawn shops, convenient stores, bars/clubs, etc. Of course, not everyone is under the radar. Plenty of people just file and under-report (which goes back to support the original concept of living overseas and having a lower "retired in an overseas/developing country" income).

[TokyoT]

Of course it matters.  If you're living overseas and don't have your address listed anywhere, how is anyone going to serve you an IRS summons?    Hundreds of thousands of Americans are incorporated in the Caribbean, bank in Europe, and live in Asia just for that reason. 

<{POST_SNAPBACK}>

This is all fine and good as long as you never plan to return to live/work the US, and you don’t end up marring a wife from outside the US and try to get her a visa for the US. This is why even though I live outside the US and fall well under the tax exemption I still file a tax return every year. I own Uncle Sam zero tax, but I needed to provide the tax documents to support the visa for my wife.

Plus don’t you think the chances of an audit might just increase should you ever return to the US and file a tax return for the first time in say six years or so.

Also I think it might be pushing it to say hundreds of thousands of Americans are doing this already. While I am certain there are some I doubt the sum is quite that high.

<{POST_SNAPBACK}>

It is that high, and likely higher... especially if count the per capita banks/accounts of many Caribbean countries. If you just count the number of people involved Internet porn, and online casinos, I think you'd get to that figure already. And then this is yet to count those involved in more traditional high cash/low desire to report all earned revenue businesses like pawn shops, convenient stores, bars/clubs, etc. Of course, not everyone is under the radar. Plenty of people just file and under-report (which goes back to support the original concept of living overseas and having a lower "retired in an overseas/developing country" income).

<{POST_SNAPBACK}>

I think maybe our lines are a bit crossed your post indicated the following:

“Hundreds of thousands of Americans are incorporated in the Caribbean, bank in Europe, and live in Asia just for that reason.”

While I am sure there are hundreds of thousands that have offshore accounts. I doubt that there are hundreds of thousands that have offshore accounts, and claim to live in Asia. Not too many Americans that own pawn shops and live in Asia. Plenty of those offshore account holders still living in the US - just not reporting the funds.

[trajan]

many europeans/US expats living long term (decades) in Singapore actually become citizens  because their taxes back home are high and they feel comfortable there. Some of them are British pilots who never went home after the war. So they don't look anything like thai.

<{POST_SNAPBACK}>

US expats are taxed in the US on their worldwide income so it doesnt make a difference if the income tax rate is lower in Singapore (but there's a US$80,000 foreign income tax exclusion and also foreign tax credits which help ease the pain)

<{POST_SNAPBACK}>

Of course it matters. If you're living overseas and don't have your address listed anywhere, how is anyone going to serve you an IRS summons? Hundreds of thousands of Americans are incorporated in the Caribbean, bank in Europe, and live in Asia just for that reason.

<{POST_SNAPBACK}>

Im talking about US expats who follow the law...in those situations its doesnt matter if the tax rate is lower in Singapore....

[Martin]

This whole idea of borrowing to buy an up-market condo in Bangkok is just one particularly crazy incident in a bubble that, at best, is going to gently deflate.

And, at worst, is going to burst in a way that will make the 1997 effects on the property market look like a mild readjustment.

I doubt if anyone buying a condo to rent out now will ever get into positive equity. And they could well find themselves without a tenant and having negative income to boot.

The bank may well come a bit unstuck, too.

Not that I would feel it very grievous---anybody with that sort of money to speculate with will always be able to afford food and shelter.

But if this bubble grows much bigger, the fallout when it bursts will hurt a lot of poor people, too. And that would be grievous.

[Heng]

Of course it matters.   If you're living overseas and don't have your address listed anywhere, how is anyone going to serve you an IRS summons?    Hundreds of thousands of Americans are incorporated in the Caribbean, bank in Europe, and live in Asia just for that reason.  

This is all fine and good as long as you never plan to return to live/work the US, and you don’t end up marring a wife from outside the US and try to get her a visa for the US. This is why even though I live outside the US and fall well under the tax exemption I still file a tax return every year. I own Uncle Sam zero tax, but I needed to provide the tax documents to support the visa for my wife.

Plus don’t you think the chances of an audit might just increase should you ever return to the US and file a tax return for the first time in say six years or so.

Also I think it might be pushing it to say hundreds of thousands of Americans are doing this already. While I am certain there are some I doubt the sum is quite that high.

It is that high, and likely higher... especially if count the per capita banks/accounts of many Caribbean countries. If you just count the number of people involved Internet porn, and online casinos, I think you'd get to that figure already. And then this is yet to count those involved in more traditional high cash/low desire to report all earned revenue businesses like pawn shops, convenient stores, bars/clubs, etc. Of course, not everyone is under the radar. Plenty of people just file and under-report (which goes back to support the original concept of living overseas and having a lower "retired in an overseas/developing country" income).

I think maybe our lines are a bit crossed your post indicated the following:

“Hundreds of thousands of Americans are incorporated in the Caribbean, bank in Europe, and live in Asia just for that reason.”

While I am sure there are hundreds of thousands that have offshore accounts. I doubt that there are hundreds of thousands that have offshore accounts, and claim to live in Asia. Not too many Americans that own pawn shops and live in Asia. Plenty of those offshore account holders still living in the US - just not reporting the funds.

You're right,... I don't have any stats to back up my post and my own wires were indeed crossed (wouldn't be the first time).

It's just my opinion because I know 3-4 in Bangkok in that situation out of less than two dozen American friends.

[Bikkel]

Jeez, now they want to sell you a mortgage...getting a multiple entry visa and a bankaccount with a ATM card is hassle enough.

Why is Bombay booming nowadays? Because of foreign investment! Maybe Mr. Taksin will wake up someday and smell the $.

[BlackJack]

over the next 12 months 1000's of houses and apartments are coming onto the market

add to this the downturn in places like Phuket, SARS, Chicken Flu VIrus, increasing AIDS problem, price of oil US$60 PB, over priced real estate market, unbelievable per capita personal debt (up 10 fold over last year), subsidized deisel price (2 years now and rising borrowed money) etc etc

get the picture

All inidcators are saying hold off on buying - catch the bargains next year

if the banks can guarantee the interest rate or better still lock it in then its a bonus

however there will be plenty of fine print (in Thai) so buyer beware

[Martin]

Blackjack says (and I agree):

"over the next 12 months 1000's of houses and apartments are coming onto the market

add to this the downturn in places like Phuket, SARS, Chicken Flu VIrus, increasing AIDS problem, price of oil US$60 PB, over priced real estate market, unbelievable per capita personal debt (up 10 fold over last year), subsidized deisel price (2 years now and rising borrowed money) etc etc

get the picture

All inidcators are saying hold off on buying"

but I think one would be wise to be wary of buying next year (or whenever the bubble has burst).

In the past century, the booms and busts in the property market have been fluctuations riding on an underlying upward trend. So buying after a bust and selling during the next boom has been profitable speculation.

But the underlying upward trend came about because cities were growing to absorb increasing populations(and rural areas were growing much less, or even falling in population).

However that city-growth was only possible because cheap oil, and thus cheap electricity, was available for transporting food to the cities, and to underpin 'service sector' jobs.

I am predicting that city growth will stop within the period of a mortgage entered into today---hence my prediction that a purchaser of one of these condos 'bought-to-rent' may not get a good return on their money and may never be able to sell out for a figure that recoups their outlay.

Two straws in the wind this week:

BA and Virgin raising the cost of their flights, due to oil prices. That isn't going to help any service-sector that is dependant on long-haul tourists.

Rice farmers in Esarn going back to having a buffalo for ploughing rather than borrowing cash to spend on replacing clapped-out 'walking'-tractors. (It only takes a bit of labour to get feed for the buffalo, whereas fuelling a tractor takes cash money).

[Simpleton]

we are 2nd class citizens

<{POST_SNAPBACK}>

No, you're not a citizen at all.

[quiggs]

When I first joined this forum, I was advised against basically everything. You cannot find a job" I found one

"you cannot make money buying rental properties" I have made back my investment in my first rental in less than three years.

I will say this....buying expensive condos with a mortgage seems suicide...Thais cannot afford them, and as stated, foreign investors are up and down.

[EVO]

Nice post quiggs.

Its allways nice to read a post that has a positive note, rather than the negative notes that make up 70 or 80 per cent of the forum.

IMHO, for those staying here long term, and wanting to live in the condo rather than buying to rent, this makes sense.

If, like me your paying 40,000/month for a house in Bangkok, it would certainly be worth looking at.

[charles]

over the next 12 months 1000's of houses and apartments are coming onto the market

add to this the downturn in places like Phuket, SARS, Chicken Flu VIrus, increasing AIDS problem, price of oil US$60 PB, over priced real estate market, unbelievable per capita personal debt (up 10 fold over last year), subsidized deisel price (2 years now and rising borrowed money) etc etc

get the picture

All inidcators are saying hold off on buying - catch the bargains next year

SARS?

Increasing AIDS problem?

10 fold increase in per capita personal debt in ONE year??? !!!

Yes, it is very likely Thailand will face some economic problems and this will weigh down on real estate but lets keep things realistic.

Buying a condo is not such a mad thing to do as long as:

1) You are buying something to live in and plan staying a long time

2) You carefully research the available projects/buildings and developers and pay a price you are comfortable with.

Personally I'd say look at stuff that is affordable to middle class urban Thais but out of the range of the lower classes. Probably most chance of a serious bubble in the upper class property (much higher rate of buying for "investment"/speculation/money laundering(?) in these places rather than buying simply to live in.

Probably the biggest source of potential fluctuation in real estate prices here for foreigners is the EXCHANGE RATE. And for many Western currencies this is at present extremely good (esp. GBP).

[expatinasia]

"Blackjack says (and I agree):

"over the next 12 months 1000's of houses and apartments are coming onto the market

add to this the downturn in places like Phuket, SARS, Chicken Flu VIrus, increasing AIDS problem, price of oil US$60 PB, over priced real estate market, unbelievable per capita personal debt (up 10 fold over last year), subsidized deisel price (2 years now and rising borrowed money) etc etc"

Things must be tough in rural Udon Thani: "SARS, Chicken Flu VIrus, increasing AIDS problem".

With a population of almost 60 million, the economic base can use "1000's of houses and apartments". If you were in the US, you'd be holed up in a shack in Oklahoma, waiting for either the apocalypse or the rapture. But according to your intellectually stimulating missive, all of the problems will be solved in a year. Woohoo!

[เพลง]

BBL offering condo mortgages to foreigners

I'm confused at just who this offer is supposed to appeal to.<p>

I personally am desperate to invest in a condo in Thailand. House prices in the UK make it impossible for me to get on the bandwagon here and as I plan to live in Thailand eventually I will at least have somewhere to live should the "investment" side of things not go according to plan.<p>

Anybody with a property in thier name in the UK (and, I suspect, most other countries) can raise the capital for a property in Thailand against their own home and can presumably get a much better package through finaciers in thier home land.<p>

So we're left with first time buyers such as myself as a potential market. Now Bangkok Bank are only offering a 70% mortgage, so a deposit of 30% is required. The property I'm looking at is 1.6Mbt, or £25,000. 30% of this is £7500. On top of this there is a fee of $5000 singapore dollars, or £2000. The total cash up front therefore required for a £25,000 (1.6Mbt) property is £9,500 (or 665,000bt). Where on earth is a first time buyer supposed to raise that kind of cash?

[Bobcat]

It could simply be because in order for you to have your deed registered, the money for the condo needs to come from outside Thailand, and to be transferred in foreign currency. If you borrowed the money from a Thai Branch of Bangkok Bank, you probably wouldn't be able to get a certificate of remittance (formerly TT3).

This is the correct answer.

Bob

[Firefan]

I do understand your frustration but if you do not have the about $15k to your name it might not make much sense to buy anything here anyway. Banks here are slowly opening up to foreigners taking out loans - but it will be a long road.

Also note, that in order to get the BKK Bank loans you will have to have all the paperwork in order when it comes to income proof/work permits/visas Etc. One can not just land here with a tourist stamp + $15k and walk to the bank to obtain the loan.

I.e. the loans (initially at least) target expats living and working here.

On the other thread on this subject a new loan broker (British/offshore) is mentioned as an upcoming alternative.

Cheers!

BBL offering condo mortgages to foreigners

I'm confused at just who this offer is supposed to appeal to.<p>

I personally am desperate to invest in a condo in Thailand. House prices in the UK make it impossible for me to get on the bandwagon here and as I plan to live in Thailand eventually I will at least have somewhere to live should the "investment" side of things not go according to plan.<p>

Anybody with a property in thier name in the UK (and, I suspect, most other countries) can raise the capital for a property in Thailand against their own home and can presumably get a much better package through finaciers in thier home land.<p>

So we're left with first time buyers such as myself as a potential market. Now Bangkok Bank are only offering a 70% mortgage, so a deposit of 30% is required. The property I'm looking at is 1.6Mbt, or £25,000. 30% of this is £7500. On top of this there is a fee of $5000 singapore dollars, or £2000. The total cash up front therefore required for a £25,000 (1.6Mbt) property is £9,500 (or 665,000bt). Where on earth is a first time buyer supposed to raise that kind of cash?

[Firefan]

He,he - good one expatinasia!

There are lots of arguments on both side of the fense - for some positives; new airport(s), baby boomers(in the West) retire and wants to move to warmer (and cheaper) climates and so forth.

I do personally have my money on further increases. Will see if I am right or not. If not you will see me with a banjo begging around Ploenchit .

Cheers!

"Blackjack says (and I agree):

"over the next 12 months 1000's of houses and apartments are coming onto the market

add to this the downturn in places like Phuket, SARS, Chicken Flu VIrus, increasing AIDS problem, price of oil US$60 PB, over priced real estate market, unbelievable per capita personal debt (up 10 fold over last year), subsidized deisel price (2 years now and rising borrowed money) etc etc"

Things must be tough in rural Udon Thani: "SARS, Chicken Flu VIrus, increasing AIDS problem".

With a population of almost 60 million, the economic base can use "1000's of houses and apartments".  If you were in the US, you'd be holed up in a shack in Oklahoma, waiting for either the apocalypse or the rapture.  But according to your intellectually stimulating missive, all of the problems will be solved in a year.  Woohoo!

[thaigene2]

Lots of really misinformed comments and a few rather naive questions (no offence, I've asked many a wierd one myself..)

Some Fast Facts (correct if you are SURE you're right):

1. Bangkok Bank is offering the loans to foreigners because there is a growing market of retirees and internationally mobile expats who work out here (often on Thai baht salaries) but are inelligible to buy property/houses in our own names, and do not have the 100% purchase price waiting in a bank overseas to transfer - so there is the business case.

2. The Bank of Thailand (BOT - the central bank) require 100% of condo price to be paid by importing the money from abroad in a foreign currency. So the branch of Bangkok Bank in Singapore can effect this by lending you Sing or US dollars from down there. Money comes into Thailand, BOT's rules are met and the Land Registry gets its Tor Tor 3 form (it's called someting else now, but same same).

3. The condo and property market (in BKK and Phuket I think - IMHO) is probably overheated and so it's in the Bank (and the country's) best interest to let this little loohope widen, as the number of thai-chinese, merchant class kids, etc, with cash to buy expensive new properties is finite. So the bank needs fresh sources of potential loan customers, thus farangs and japanese, etc. Again there's the business case. (you can see the desparation of developers in the frantic glossy ads everywhere..they're competing hard for a few remaining buyers..and it looks like they've even given up on the glossy ads for Thai language papers..notice the high priced condo ads are mostly in English now?)

4. Don't expect to be able to get local loans anytime soon on the strength of your work permit and salary..some have, but have had trouble registering their condo cause of no Tor Tor 3s..but a few have managed usually through ignorance (or 'tipping'?) of civil servant.

[เพลง]

2. The Bank of Thailand (BOT - the central bank) require 100% of condo price to be paid by importing the money from abroad in a foreign currency. So the branch of Bangkok Bank in Singapore can effect this by lending you Sing or US dollars from down there. Money comes into Thailand, BOT's rules are met and the Land Registry gets its Tor Tor 3 form (it's called someting else now, but same same).

<{POST_SNAPBACK}>

While the BOT's rules are met, should anybody ever wish to sell thier property and take the finds back out of Thailand they will only be able to prove that the money came from Singapore. Now I'm no expert in currency import/export but that sounds dangerous to me. To get your money back to (for example) England, would you not have to transfer it BACK to singapore before sending it back to England? You're therefore relying on currency export regulations of TWO countries being in your favour, and hence have twice the risk of a foul up.

Not that I have any desire to sell a property and take the money back out of Thailand but it's a though for those who may one day wish to.

[Firefan]

I don't think BOT cares WHERE abroad the money goes to. They worry about their jurisdiction being Thailand only. Cheers!

[westcoastnative]

20M baht for a condo? Thats one heck of a condo! Considering you can build a house up country for 300,000 baht upwards. This is just silly pie in the sky talk. Anyone who takes  this as a serious financial deal needs there head examining.

<{POST_SNAPBACK}>

One can build a house for 300,000 bht? Really? That sounds very cheap. Does that include a pot to piss in?

[retirednavyman]

But if you're gonna sell after living there for several years, all that equity builds up and you can come away with a nice chunk of change, unless the rules are different in Thailand.....food for thought

Mike

[เพลง]

I don't think BOT cares WHERE abroad the money goes to. They worry about their jurisdiction being Thailand only. Cheers!

<{POST_SNAPBACK}>

I'm not suggesting that they do care... simply suggesting that any farrang thinking of buying a property with the intention of selling it and moving back OUT of Thailand may want to excercise caution with Bangkok Bank's "offer".

[Sumitr Man]

Some Fast Facts (correct if you are SURE you're right):

2. The Bank of Thailand (BOT - the central bank) require 100% of condo price to be paid by importing the money from abroad in a foreign currency. So the branch of Bangkok Bank in Singapore can effect this by lending you Sing or US dollars from down there. Money comes into Thailand, BOT's rules are met and the Land Registry gets its Tor Tor 3 form (it's called someting else now, but same same).

<{POST_SNAPBACK}>

I don't think this is correct. While I would agree that in most cases foreigners buying condos in Thailand will need to bring money in, I think the current law states:

"(5) Aliens or juristic persons regarded by law as an alien who bring in foreign currency into the Kingdom or withdraw money from the Baht account of a non-resident or withdraw money from a foreign currency account."

Source: Apartment Building Act (No.3) B.E. 2542 (1999), as published in Ministerial Information Bulletin No. 9060 as of 21st June 1999.

[Heng]

20M baht for a condo? Thats one heck of a condo! Considering you can build a house up country for 300,000 baht upwards. This is just silly pie in the sky talk. Anyone who takes  this as a serious financial deal needs there head examining.

One can build a house for 300,000 bht? Really? That sounds very cheap. Does that include a pot to piss in?

You can build what most would consider a shack up country for 300,000 Baht upwards. Just make sure the first construction materials you buy is not a 300,000 Baht plasma tv.

[Dragonman]

20M baht for a condo? Thats one heck of a condo! Considering you can build a house up country for 300,000 baht upwards. This is just silly pie in the sky talk. Anyone who takes  this as a serious financial deal needs there head examining.

<{POST_SNAPBACK}>

One can build a house for 300,000 bht? Really? That sounds very cheap. Does that include a pot to piss in?

<{POST_SNAPBACK}>

You can build what most would consider a shack up country for 300,000 Baht upwards. Just make sure the first construction materials you buy is not a 300,000 Baht plasma tv.

<{POST_SNAPBACK}>

My 400,000 baht shack Though must admit built large 5metre x 5 metre kitchen extension on rear(not in picture) for 120,000 baht fully fitted. 3 bedrooms, 2 showers.