Can I Still Buy A Condo If The Source Of Funds Occurred Sometime In The Past?

[funlovinkid]

I moved some substantial cash into Thailand at various points in the past when the exchange rate was favorable, with the intention of either using the funds for living expenses or buying a condo. At the time, I was under the impression that, as long as I kept my copy of the Bank of Thailand Foreign Exchange Transaction form to prove the original source of funds, I would have no problem either buying a condo or moving the funds back out of the country if I so chose.

A friend recently informed me of two potential problems with my assumptions above:

1) the Land Office might not approve the purchase transaction for the condo if the BoT FET form is beyond a certain date;

2) moving the funds back out of the country could result in a 30% tax on the funds transferred.

In addition, I'm concerned with the "Purpose" code which was used on the FET form for each transaction, as they're all a bit different:

1) 318131 Others (please specify details): to which was written "For living expenses or investment"

2) 318131 Others (please specify details): to which was written "Living expenses"

3) 318052 Gratuity of Private Sectors: to which was written "For living expenses or investment"

I selected the code in the first two transactions above (and provided the written description), but in the last transaction above, the transacting bank chose the code and typed in my description of the purpose. Since I didn't have access to the official description for each code at the time, I naively assumed that the bank would choose the correct code to match the written description that I provided them at the time. Now that I consider the meaning of the official description for the code they used, I'm getting a bit paranoid.

Does anyone out there have any experience which might clarify the situation a bit?

[ballbreaker]

Try taking the forms you have down to the main bank office and ask if they will issue FET or multiple FET's you need for condo purchase.

[PattayaParent]

None of those codes are for the purpose of purchasing a condo.

I can't remember what the code is but I know it's not them.

I would think that if the stated purpose was "for living expenses" and the money was imported some time ago they would expect you would have spent it by now? especially if followed up by another transfer stating the same purpose?

But then TIT and logic is not often applied.

[Langsuan Man]

I was always under the impression that there were no restrictions on how you obtained the funds to purchase a condo, you just had to have the Foreign Exchange Certificate if you wanted to repatriate the money later on

[Puccini]

I remember a post on this forum saying that for a remittance to a Thai bank account for the purpose of buying a condo the message to the beneficiary on the payment order given to the foreign bank and subsequently the information on the FETF must indicate the name of the condo building or project and the number of the condo unit being bought. In the end, though, it will depend on how the official at the Land Registration Department handles it and this may vary from one department and/or one official to the next.

When I bought a condo last year the Bank of Ayudhya gave me the FETF to fill out and under "4. Please specify" I wrote "Purchase of condo unit [number] at [condo building name], [postcode] Bangkok". I haven't got the copy countersigned by the bank at hand at the moment and thus can't say what code the bank entered under paragraph 4 on the form.

[Puccini]

I had a quick look at the Condominium Act just now and see that it does not require specifics of the condo unit being bought, nor does it mention any time limit during which the money must have been brought into Thailand:

Section 19¹⁷ Aliens and juristic persons regarded by law as aliens may hold ownership of an apartment if they are the following:

...

(5)¹⁸ Aliens or juristic persons regarded by law as aliens who have brought in foreign currency into the Kingdom or withdraw money from Thai baht account of the person who have residence outside the Kingdom or withdraw money from a foreign currency account.

Section 19 ter²⁰ In transferring of ownership of an apartment to an alien or juristic person as specified in Section 19 shall the applicant for transfer of ownership of apartment shall notify the Competent Official of the name of the alien or juristic person as specified in Section 19 together with the proportion of space of apartments already owned by such aliens or juristic persons, and the alien or juristic person who applies for holding the ownership of apartment shall present the following evidence to the Competent Official;

...

(5)²¹ For juristic persons stipulated in Section 19 (5), they shall produce evidence of bringing in foreign currency into the Kingdom or evidence of withdrawal of money from Thai Baht account of the person who have residence outside the Kingdom or withdrawal of money from foreign currency account in the amount of not less than the price of the apartment to be purchased

¹⁷ Amended by Condominium Act (No. 2) B.E. 2534 (1991)

¹⁸ Amended by Condominium Act (No. 3), B.E. 2542 (1999)

²⁰ Added by Condominium Act (No. 2), B.E. 2534 (1991)

²¹ Amended by Condominium Act (no. 3), B.E. 2542 (1999)

[Jingthing]

Here's a wrinkle.

Supposing an import of 3 million baht 10 years ago for a condo purchase.

Then selling the condo and using that same 3 million baht for a new condo purchase.

Could those funds still be used to buy a condo and qualify for external transfer?

I reckon not, but I am curious.

[wpcoe]

Related to JT's scenario, I have some questions about what I was told by various agents when I bought my condo six years ago.

Unamimously they said that when the time came to sell my condo, if/when I wanted to reinvest, the proper way was to export from Thailand and re-import the money, getting a new TorTor3 (at the time, now it's a FETF) for the new purchase. In order to export the money with minimal hassles, I would need the original TorTor 3, but I forget just what those hassles were? Taxation, I guess?

However, a couple agents said the "unofficial" way was to take a bag full of the actual THB proceeds from the sale to a money exchanger -- or certain "cooperative" bank branches -- and they will convert it to foreign currency and then convert it back to THB and issue a TorTor 3 for that conversion back to THB. The incentive for the money exchanger/bank is commissions on both conversion transactions.

Since I may well sell my condo, I wonder if the above "unofficial" method is totally illegal, or just a grey area, and if the same thing can be done these days with FETFs.

[Fgis]

Very easy to get the right form at some banks if you pay the fee...

[PattayaParent]

Here's a wrinkle.

Supposing an import of 3 million baht 10 years ago for a condo purchase.

Then selling the condo and using that same 3 million baht for a new condo purchase.

Could those funds still be used to buy a condo and qualify for external transfer?

I reckon not, but I am curious.

I would agree that it's not possible as you need to present the original FETF to the Land Office which they keep.

BUT

In many cases the amount of incoming funds is greater than the amount declared to the Land Office so if you have split the transfers over a few FETF then you may be able to use an old one.

However 10 years might be pushing it because if they were bothered to do their job properly and check they could easily request proof that your money has sat in a bank account for that time waiting for you to find the right condo and not been spent already.

[wpcoe]

Very easy to get the right form at some banks if you pay the fee...

Ah, so it is a legal practice, then? Somehow I was left with the impression it was a shady transaction.

I would agree that it's not possible as you need to present the original FETF to the Land Office which they keep.

Oh. I didn't know the Land Office kept the FETF. When I bought my condo, I had the bank mail the Tor Tor 3 directly to my realtor since I was going to be out of the country. I thought in order to export the money back out of the country, I needed to show the original Tor Tor 3. Can a bank re-issue an Tor Tor 3/FETF for an old transaction?

[PattayaParent]

^no the bank won't re-issue the FETF but you can get a copy of it from the Land Office.

[funlovinkid]

I remember a post on this forum saying that for a remittance to a Thai bank account for the purpose of buying a condo the message to the beneficiary on the payment order given to the foreign bank and subsequently the information on the FETF must indicate the name of the condo building or project and the number of the condo unit being bought. In the end, though, it will depend on how the official at the Land Registration Department handles it and this may vary from one department and/or one official to the next.

When I bought a condo last year the Bank of Ayudhya gave me the FETF to fill out and under "4. Please specify" I wrote "Purchase of condo unit [number] at [condo building name], [postcode] Bangkok". I haven't got the copy countersigned by the bank at hand at the moment and thus can't say what code the bank entered under paragraph 4 on the form.

For what it's worth, I did find the correct code for buying a condo. It reads: "318069 Purchasing condominium".

[dksharron]

I was at the land office several months ago, and there was a foreign man in a very bad mood.

He had just sold a condo recently, and was using the cash from the sale to buy another one.. NO NO NO NO NO, HE WASN'T

He must send the money out of the country and then bring it in again.

That money was already used to buy a condo, another condo.

HE MUST BRING IN MONEY TO BUY THIS SPECIFIC CONDO

He was a very unhappy man.

Here's a wrinkle.

Supposing an import of 3 million baht 10 years ago for a condo purchase.

Then selling the condo and using that same 3 million baht for a new condo purchase.

Could those funds still be used to buy a condo and qualify for external transfer?

I reckon not, but I am curious.

[Jingthing]

Yeah, I knew that was the rule. Sadly. Because that's too much hassle for me, enough to never buy a new condo in Thailand (Stupid rule.)

[funlovinkid]

Well, I had a chat with someone at the Chiang Mai Land Office about my situation, and his response was that, as long as the price paid for the condo is less than the total amount of funds transferred into Thailand, he would approve the condo registration request. So I intend to go there, meet the guy, show him my three FETF's, and confirm what he says before entering into any condo purchase contract. So, this is a hopeful new development.

However, I'm still not sure about the possibility of encountering a problem in the future, if and when I decide to sell the condo, and choose to move the funds back out of Thailand. I believe I would still need to use my existing FETF's to prove the original source of the funds, but because none of them indicate plans to buy a condo, would the local bank disallow my request for the outbound transfer? Or would the same situation as above apply, in which they would allow the outbound transfer as long as it were less than the sum total of the three FETF's? Any feedback would be appreciated!

[PattayaParent]

^the bank will make a transfer based on the value stated on the tax reciept from the land office when you sell.

This may be less than what you actually recieve though.

My bank would not transfer the excess based on the FETF as it did not state the purpose was to buy a condo.

[Langsuan Man]

Well, I had a chat with someone at the Chiang Mai Land Office about my situation, and his response was that, as long as the price paid for the condo is less than the total amount of funds transferred into Thailand, he would approve the condo registration request. So I intend to go there, meet the guy, show him my three FETF's, and confirm what he says before entering into any condo purchase contract. So, this is a hopeful new development.

However, I'm still not sure about the possibility of encountering a problem in the future, if and when I decide to sell the condo, and choose to move the funds back out of Thailand. I believe I would still need to use my existing FETF's to prove the original source of the funds, but because none of them indicate plans to buy a condo, would the local bank disallow my request for the outbound transfer? Or would the same situation as above apply, in which they would allow the outbound transfer as long as it were less than the sum total of the three FETF's? Any feedback would be appreciated!

The original FETF's are retained by the Land Office and stay with the Chanote paperwork. All you get back from the Land Office is a Copy signed by them

[funlovinkid]

Update: I went to the Land Office in Chiang Mai, and spoke with the guy referred to above (as he is apparently one of the few people in the office whose English was relatively good). So I showed him my three FETF's, and he conferred with his superior. The answer I received back: I couldn't use any of them for the purchase of a condo. The Land Office wants to see funds transferred into the Kingdom (in what I believe should be an amount which fairly closely matches the stated purchase price of the condo, probably a little more would be OK), and the purpose for the funds transfer stated on the FETF should be not only for purchasing a condominium, but it should state the name of the condo building, and also the room number (or condo unit number) being purchased.

These FETF's are required to be used if the transfer amount is in excess of $50,000 USD, or equivalent. Does anyone know if a different form is used if the amount is less, and does this form also require a statement of purpose for the transfer? If I decide to buy an inexpensive condo, I'm wondering what paperwork I should expect to be dealing with. Also, does anyone happen to know if a Foreign Exchange transaction must occur for the incoming funds (i.e. from some particular currency into Thai Baht), or if I happen to already have Thai Baht sitting in an offshore account, would it be OK to transfer it in for the purpose of buying a condo?

So many issues to consider here!

[PattayaParent]

^if the amount of the incoming transfer is less than US$50,000 then you ask the bank for a Bai Rap Rong.

State that the purpose of the transfer is for the purchase of a condo.

I'm pretty sure the funds coming from overseas should be in a foreign currency?

[yoshiwara]

Related to JT's scenario, I have some questions about what I was told by various agents when I bought my condo six years ago.

Unamimously they said that when the time came to sell my condo, if/when I wanted to reinvest, the proper way was to export from Thailand and re-import the money, getting a new TorTor3 (at the time, now it's a FETF) for the new purchase. In order to export the money with minimal hassles, I would need the original TorTor 3, but I forget just what those hassles were? Taxation, I guess?

However, a couple agents said the "unofficial" way was to take a bag full of the actual THB proceeds from the sale to a money exchanger -- or certain "cooperative" bank branches -- and they will convert it to foreign currency and then convert it back to THB and issue a TorTor 3 for that conversion back to THB. The incentive for the money exchanger/bank is commissions on both conversion transactions.

Since I may well sell my condo, I wonder if the above "unofficial" method is totally illegal, or just a grey area, and if the same thing can be done these days with FETFs.

Does the unofficial method have the foreign currency sent from abroad?

There is another method which takes a bit of time. It is permitted to take up to $20k in foreign currency out of Thailand at any one time.

Convert the baht to $USD or GBP in Thailand. Take it overseas and deposit in account.

Rinse and repeat until total for purchase reached (3/4 trips?).

Then send the money back for a 'straight' purchase.

[funlovinkid]

I was always under the impression that there were no restrictions on how you obtained the funds to purchase a condo, you just had to have the Foreign Exchange Certificate if you wanted to repatriate the money later on

Based on my recent conversation with the Chiang Mai Land Office, that's not true at all (see what I wrote a bit further up the thread). Because the Land Office retains the FETF (or any other official statement from the bank that the incoming funds are for the purpose of buying a condo), and because they want this documentation to be tied to a specific condo purchase, it needs to be consistent in terms of purchase price and condo specifics (i.e. condo building name and condo unit number). As I expressed concern about at the start of this thread, it turns out that none of my FETF's would be accepted by the Land Office because they aren't specifically for the purchase of a particular condo at a particular price. Hence, I'm moving cash back out of the country so that I can transfer it in as needed whenever I actually have a condo purchase contract in effect (which will hopefully be soon).

Why do I get the feeling I've become a circus dog?

Edited May 28, 2012 by funlovinkid