Can Foreigner Buy A House And Land? Same Question Again But Just To Be Sure I Am Not Getting Scammed

[Naam]

I think Naam owns his land and house through a company and starting to feel uncomfortable.

No worries just slip a few K to the inspector.

why would ridiculous statements based on thin air illogical assumptions make me feel uncomfortable? yes we built our house, owned by us in our names, on land owned by a company which is 100% Thai owned without any Farang shareholder or Farang director. the prevailing setup was neither easy nor inexpensive because of the changes from the initial setup. the running cost (administration, corporate tax, audit, annual return) are quite high but still only a fraction of the 10,735 US-Dollars property tax we paid for our former house in Florida plus a (much) lower property tax amount levied on our home in Germany, not to mention other direct or indirect taxes.

if i add to the property taxes the fancy German income tax (later a lower U.S. federal income tax) we pay peanuts in Thailand. i am of course aware that the route we chose is not an option for each and everybody. but there are a number of ways to skin a cat own landed property in Thailand besides a condo based on "foreign allocation" or a Thai partner.

i also admit that the rental option is the best way to go for people who shy away from capital outlay or don't have the dough and/or are happy with the "taste" their landlord provides. to each his own, one size does not fit all. rendering advice whether owning, renting or whatever is as nonsensical as telling a stranger what partner to select.

Edited March 21, 2012 by Naam

[Naam]

Whats your point Naam? I don't really think the Thai authorities will worry too much about the missing grass cuttings etc. they would already have plenty to use and give a v hard time to anyone who can't prove a company is genuine..at ANY time in the future, Thai law is quite clear on this.

my point is that "genuine" companies do exist. but my rebuttal was directed at your posting which contained "all assets have to be sold off.. including of course any vehicles & family home that are registered to that company" and similar irrelevant insinuations based on the wrong assumption that home, vehicles, etc. are owned by a company. when a company is sold no individual company assets have to be sold as the assets remain company property.

facit: it is advisable to do a wee bit of logical thinking or gather information before posting.

[Khun Jean]

So you own a house in your name but don't own the land, another Thai entity or Thai person(s) own that.

In short you have a lease on the land (30 years with unenforceable renewals maybe!),or a usufruct.

Would not be my first choice, it would not even be my last. If it makes you comfortable, well why not at least i assume you went in with the knowledge necessary.

[Khun Jean]

Whats your point Naam? I don't really think the Thai authorities will worry too much about the missing grass cuttings etc. they would already have plenty to use and give a v hard time to anyone who can't prove a company is genuine..at ANY time in the future, Thai law is quite clear on this.

my point is that "genuine" companies do exist. but my rebuttal was directed at your posting which contained "all assets have to be sold off.. including of course any vehicles & family home that are registered to that company" and similar irrelevant insinuations based on the wrong assumption that home, vehicles, etc. are owned by a company. when a company is sold no individual company assets have to be sold as the assets remain company property.

facit: it is advisable to do a wee bit of logical thinking or gather information before posting.

The point is that if a company is found to make no profit or not performing business you would have to close down the company.

Transferring (selling) assets at market value to you privately or to a Thai person or entity will cost taxes, not only transfer tax but also personal income tax.

So having land or land with a house in a company has the additional risk that when it needs to be closed down the cost of doing that will be higher then most expect.

Only when shares are sold/transferred you can avoid those taxes, but then you don't own the company anymore and as such don't own the land and/or house anymore.

[Naam]

The point is that if a company is found to make no profit or not performing business you would have to close down the company.

Transferring (selling) assets at market value to you privately or to a Thai person or entity will cost taxes, not only transfer tax but also personal income tax.

So having land or land with a house in a company has the additional risk that when it needs to be closed down the cost of doing that will be higher then most expect.

Only when shares are sold/transferred you can avoid those taxes, but then you don't own the company anymore and as such don't own the land and/or house anymore.

the point is that you are spreading personal ass-umptions which have neither a legal nor an actual basis. besides, mentioning income tax (which assumes profit was made in context with a forced sale) is nothing but ridiculous. period!

[PattayaPhom]

Cant believe this thread is still going with the same few doomsdayers posting the same old rubbish................buying a property through a company is safe and legal if done properly. Simples

[rayinkrabi]

Cant believe this thread is still going with the same few doomsdayers posting the same old rubbish................buying a property through a company is safe and legal if done properly. Simples

I personally have nothing against buying land etc. through a legit company..it obviously suits some to do it this way and good luck to 'em. But if you read the first post by Radiola it's clear he/she was 'advised' to form a company with the sole purpose of buying property...nothing safe & legal there. All too obvious and a bit fishy anyway so I'm outa here :-)

[Khun Jean]

The point is that if a company is found to make no profit or not performing business you would have to close down the company.

Transferring (selling) assets at market value to you privately or to a Thai person or entity will cost taxes, not only transfer tax but also personal income tax.

So having land or land with a house in a company has the additional risk that when it needs to be closed down the cost of doing that will be higher then most expect.

Only when shares are sold/transferred you can avoid those taxes, but then you don't own the company anymore and as such don't own the land and/or house anymore.

the point is that you are spreading personal ass-umptions which have neither a legal nor an actual basis. besides, mentioning income tax (which assumes profit was made in context with a forced sale) is nothing but ridiculous. period!

Well the legal AND actual basis is that a company has to perform 'business'.

If no or little profit is made then your story has to be a good one. Sending 12 invoices to yourself for rent is not one of them.

It all has to do with taxes. When little taxes are paid, an inquiry will take place. If you are lucky and they are busy that can take a long time.

If something irregular is found, it is time to pay or even ordered to make the company legitimate within a certain time frame, usually one year.

How do i know this?

Experience.

Bought land first with a company, knowing the rules, for development. Not for living on it ourselves.

No nominees or anything else fishy.

Started to slowly develop the land, like removing trees, filling in land, put in a road etc.

No profit was made, as shareholders we put in the money for it.

Taxes filed 0 baht. For a few years.

Did not take long (3 years) before the books had to be checked. Nothing wrong there, it has all the transactions and as we wanted to develop slow with cash and not borrow our 'excuse' was accepted with the warning that we better start make profit soon otherwise the company would be seen as one holding land for a alien.

Soon after we started buying small condos (Thai quota) and rent these out. This meant more money put in by shareholders but now at least there was some profit. Sure enough they came back the following years to check if we complied with the laws. This continued for 4 more years, in the meantime we added more condos and profits were made. From then on until now we are not checked.

When a forced sale happens, assets of a company have to be transferred to someone else or to another company. Transfer tax has to be paid, if the bank account of the company is positive that money has to be transferred to the previous shareholders. That money is taxed as personal income. Deductions are allowed when terminating a company.

Don't believe me, check with your accountant.

BAM!!!

He, what was that? Yep it was your 'period' blowing up!

[Khun Jean]

Cant believe this thread is still going with the same few doomsdayers posting the same old rubbish................buying a property through a company is safe and legal if done properly. Simples

Read the OP, that means Original Poster if that was not clear, then consider your answers.

I think it is in everybodies interest you stop posting without some things to back it up. You were called out a few times, but the answers are always like 'doomsdayers','rubbish' etc?

Better stay within that group of hundreds with a company in the bar on your barstool and talk in a circle to make you feel better.

Don't forget the alcohol, what would be said would otherwise not make sense at all.

Edited March 21, 2012 by Khun Jean

[craigt3365]

The point is that if a company is found to make no profit or not performing business you would have to close down the company.

Transferring (selling) assets at market value to you privately or to a Thai person or entity will cost taxes, not only transfer tax but also personal income tax.

So having land or land with a house in a company has the additional risk that when it needs to be closed down the cost of doing that will be higher then most expect.

Only when shares are sold/transferred you can avoid those taxes, but then you don't own the company anymore and as such don't own the land and/or house anymore.

the point is that you are spreading personal ass-umptions which have neither a legal nor an actual basis. besides, mentioning income tax (which assumes profit was made in context with a forced sale) is nothing but ridiculous. period!

Well the legal AND actual basis is that a company has to perform 'business'.

If no or little profit is made then your story has to be a good one. Sending 12 invoices to yourself for rent is not one of them.

It all has to do with taxes. When little taxes are paid, an inquiry will take place. If you are lucky and they are busy that can take a long time.

If something irregular is found, it is time to pay or even ordered to make the company legitimate within a certain time frame, usually one year.

How do i know this?

Experience.

Bought land first with a company, knowing the rules, for development. Not for living on it ourselves.

No nominees or anything else fishy.

Started to slowly develop the land, like removing trees, filling in land, put in a road etc.

No profit was made, as shareholders we put in the money for it.

Taxes filed 0 baht. For a few years.

Did not take long (3 years) before the books had to be checked. Nothing wrong there, it has all the transactions and as we wanted to develop slow with cash and not borrow our 'excuse' was accepted with the warning that we better start make profit soon otherwise the company would be seen as one holding land for a alien.

Soon after we started buying small condos (Thai quota) and rent these out. This meant more money put in by shareholders but now at least there was some profit. Sure enough they came back the following years to check if we complied with the laws. This continued for 4 more years, in the meantime we added more condos and profits were made. From then on until now we are not checked.

When a forced sale happens, assets of a company have to be transferred to someone else or to another company. Transfer tax has to be paid, if the bank account of the company is positive that money has to be transferred to the previous shareholders. That money is taxed as personal income. Deductions are allowed when terminating a company.

Don't believe me, check with your accountant.

BAM!!!

He, what was that? Yep it was your 'period' blowing up!

Hmmm....I know quite a few who have had their company setup for many years...well over 10 years...and never a problem. I'll stop by my accountants office and ask just in case.

[radiola]

so if you are not generating and pforit with company, you are screwed, will the gov come looking at your papers?

The guy who wants to sell ahouse told me all is cool, no problem whatsoever

And if they come and see your papers and tell you to sell the house, how much time do you have?

[soi41]

The realestate guys here must be really desperate now, trying to push a sale with a client like OP, for a profit of max 300-400k. Radiola stay whereever you are, Thailand is way to dangerous for you, if you are for real. Personally I think MR Troll is having a good time !

[PattayaPhom]

If people dont want to buy...then dont, just rent, simple...whats wrong is people that have missed the boat and are jealous of others or ones that can still afford to purchase...these same people will be the ones knocking the price of gold as again missed the boat or buying into the FTSE when it was down under 4000.....so, horses for courses...each to their own......

[Khun Jean]

Buy or rent, who cares.

But if you buy make sure you know what you are doing.

You are in another country with a whole set of other rules and customs.

Nothing is alike. That actually makes it interesting.

Know the rules of the game before playing.