Options For A Single Guy To Purchase Property?

[madforit]

Hi All

First post to Thai Visa, but not a newb in LOS. Spent 3 years of the last 8 in Thailand and although back in UK at the moment will be heading out to LOS by end Feb 2006 to (hopefully) stay permanently.

Have read with interest most recent posts on the forum regarding buying a house in the LOS, and all the various difficulties involved in doing so. Have also taken legal advice (from one of the big companies advertising in the Bangkok Post) whilst over there last October. The house would be financed entirely from the UK.

There seem to be a few options on what to do ... my issue is that I am a single guy, and plan to remain so (Naive????). I have no wife / partner. My primary interest is to be able to ensure that the house eventually purchased remains in my name/company and reverts to my relations when I die). What I want to avoid is any claim on the property by anyone else.

So, having considered all the options, my current favourite seems to be to purchase a house through a Thai shell company (of which I have the voting shares), and ensure that the company remains active (by paying rent to the company and pay tax to the taxman) so hopefully avoiding any nasty questions.

Do any of you guys out there have an opinion? Have you already gone this route (or another)?

I'm putting this post up as I haven't yet found a thread which specifically deals with the issue of a single guy purchasing somewhere. So I don't have the option of putting it in a Thai partners' name (and wouldn't want that anyway).

Thanks in advance for any advice

Paul

[lopburi3]

In all honesty can only reply stay in the UK if property security is your main concern. The options are iffy at best. The only real option I would consider as a single guy would be a good quality condo that can be owned by a foreigner (although I don't really think highly of most condos). But I may be on the fringe group that believe there is no legal way to own land as long as the law says you can not own land and that those involved in company ownership could have a very rude awakening. With luck that may be 200 years from now however.

[astral]

You must consider your reasons for wanting to own property.

If it is for capital gain, then remember to factor in the exhange rate.

Until 1996 it was pegged at $1 - 25 baht.

The current rate is $1 - 40+ baht.

Investment to produce income will also be dubious for similar reasons.

On your death the company would need to be wound up and it is my understanding

that there will be a capital gain tax on the baht value of the property.

Unless you can find a buyer for the entire company, including the property.

You are probably better off investing in property in the UK and using

the income to rent in Thailand. It leaves you free to move on quickly

if financial or political matters go sour in Thailand.

Edited January 6, 2006 by astral

[Bobcat]

In order to set up a Thai company, you'll need a Thai person or company to own 51% of your company's shares. Once you find that person/entity, you can work out the two tier share structure to give yourself control. This is done on a regular basis by all of the major law firms (and some not so major) in Bangkok and elsewhere in Thailand.

[madforit]

Hi All, thanks for the replies so far.

Just to clarify a few things that others have brought up....

1. I've no intention of buying a condo, first off there aren't many in Phuket, secondly as I'm a bit more noise sensitive than most what I'm looking for is a nice peaceful, quiet house. I did look into buying in Bangkok, but I'm a coastal sort of person! My other love is diving so I want to be by the sea.

2. I'm not buying for any sort of investment, I'm buying a place to live in, permanently (or at least for the forseeable future!). Of course, it would be nice if it appreciated in value, but it's not a major concern, so long as I can sell it again if plans do go astray.

3. I'm well aware already of the option of using a company. As I said in my original post, I've already taken legal advice so know the options - just wondering what everyones opinions on here are!

As there are a lot of ex-pats out there, there must be people who've bought / built their own places - surely they're not all flouting the law??

I really don't want to rent - as I see it it's money down the drain, and whilst OK for short periods of time, that's exactly what I consider it to be, a short-term solution, and I'm looking for a long-term one.

A friend of mine has a place in Minburi - it's all been purchased in his Thai wife's name - house, car, the lot. She's a lovely girl and I doubt there will be any problems, but that sort of thing scares me silly. He's sold his house in the UK so if it did go pear-shaped he has nowhere to run.

Anyway, thanks again. Looking forward to some more replies!

Cheers

Paul

Edited January 6, 2006 by madforit

[Dragonman]

Hi All, thanks for the replies so far.

Just to clarify a few things that others have brought up....

1. I've no intention of buying a condo, first off there aren't many in Phuket, secondly as I'm a bit more noise sensitive than most what I'm looking for is a nice peaceful, quiet house. I did look into buying in Bangkok, but I'm a coastal sort of person! My other love is diving so I want to be by the sea.

2. I'm not buying for any sort of investment, I'm buying a place to live in, permanently (or at least for the forseeable future!). Of course, it would be nice if it appreciated in value, but it's not a major concern, so long as I can sell it again if plans do go astray.

3. I'm well aware already of the option of using a company. As I said in my original post, I've already taken legal advice so know the options - just wondering what everyones opinions on here are!

As there are a lot of ex-pats out there, there must be people who've bought / built their own places - surely they're not all flouting the law??

I really don't want to rent - as I see it it's money down the drain, and whilst OK for short periods of time, that's exactly what I consider it to be, a short-term solution, and I'm looking for a long-term one.

A friend of mine has a place in Minburi - it's all been purchased in his Thai wife's name - house, car, the lot. She's a lovely girl and I doubt there will be any problems, but that sort of thing scares me silly. He's sold his house in the UK so if it did go pear-shaped he has nowhere to run.

Anyway, thanks again. Looking forward to some more replies!

Cheers

Paul

If you do not want to rent I feel your only option is the Company route with you taking a 30 year lease with option to extend. At least you will be able to control whether your Company will still be around at that date. Check out the thread "owning house with company". monty has some good advice which hopefully you will already have received from your lawyer.

[SamuiRes]

There seem to be a few options on what to do ... my issue is that I am a single guy, and plan to remain so (Naive????). I have no wife / partner. My primary interest is to be able to ensure that the house eventually purchased remains in my name/company and reverts to my relations when I die). What I want to avoid is any claim on the property by anyone else.

Reverting to the original question - the important issue is to make a will, valid under Thai Law, and as you have no relations here, suggest this is deposited with your Lawyer who should be the executor. Your estate will therefore be dealt with in accordance with your wishes.

I am not convinced that the company would have to be wound up in the event of your death as the shares would, IMHO, pass to whoever you left them to but if someone has better information on that please say so.

[udon]

Monty's post.

[MyNameIsFarang]

Is it legal for a company to buy a house as an investment not related to its chartered purpose and then give the Managing Director the right to live in it as part of his compensation package?

[SamuiRes]

Is it legal for a company to buy a house as an investment not related to its chartered purpose and then give the Managing Director the right to live in it as part of his compensation package?

I guess this is going to open up a can of worms!

My first inclination is that it probably can - but you would need to look closely at the Articles of Association of the Company. Whilst they would probably be related to the principal activity of the Company, most Articles of Association are so broadly written that they allow the shareholders to agree to anything that promotes the business of the company. Most would also allow the acquisition of property for the purpose of the business. If the shareholders are in agreement and the requisite Memorandum of Shareholders Meeting is filed, from a company point of view I would see that as valid.

The implication of the question is that this is a trading company and therefore legitimate in its own right and not formed in itself for the purpose of owning land so I do not see that it is circumventing any laws in doing so.

There has been enough discussion on these boards as to the rights and wrongs of owning land through a Thai Company and at the end of the day everyone must make up their own mind how to go about it.

[astral]

Is it legal for a company to buy a house as an investment not related to its chartered purpose and then give the Managing Director the right to live in it as part of his compensation package?

At the present time it appears to be OK, but the MD cannot live rent free.

A rental agreement is needed with a sensible rent (Thai level)

and this must be declared for tax purposes.

My total company expenses are 20K per annum for accounting, tax etc.

[johnnyk]

With regard to keeping the property in your family, make one or more other family members, brother etc (age 20+) board directors. There must be a way they can take over after you croak. Maybe just make your brother the Managing Director when you are old but you have the right to rent the house from the company until you pop off.

The company you form to buy the house MUST NOT be more than 39% falang-owned. The Land Office investigates land-owning companies that have 40+% falang ownership. No worries, structure the articles of association with preferred shares so you have all control.

[SamuiRes]

With regard to keeping the property in your family, make one or more other family members, brother etc (age 20+) board directors. There must be a way they can take over after you croak. Maybe just make your brother the Managing Director when you are old but you have the right to rent the house from the company until you pop off.

The company you form to buy the house MUST NOT be more than 39% falang-owned. The Land Office investigates land-owning companies that have 40+% falang ownership. No worries, structure the articles of association with preferred shares so you have all control.

Not any more. 49% is now accepted without further investigation. You are right that that used to be the case though.

[kenk3z]

You should probably strike a compromise with yourself and negotiate the idea of renting for the first one or two years. The worst thing I can think of is coming in to Thailand with a load of cash and buying a house quickly, only to find out the agent told you nothing of the issues with the neighbors, etc. etc.

If you come in and rent, you can try out a few different areas and pick a situation that you'll like for a long time. I'm hoping that you are not going to transfer a household full of valuable property and keepsakes from the UK to Thailand. You'll lose it within the first year, because when you're out, someone will break in. Nobody cares about the single farang and nobody will look out for your house and property. The other ex-pats have local family to do these things.

Rent.

kenk3z

[Steve2UK]

You should probably strike a compromise with yourself and negotiate the idea of renting for the first one or two years. The worst thing I can think of is coming in to Thailand with a load of cash and buying a house quickly, only to find out the agent told you nothing of the issues with the neighbors, etc. etc.

If you come in and rent, you can try out a few different areas and pick a situation that you'll like for a long time. I'm hoping that you are not going to transfer a household full of valuable property and keepsakes from the UK to Thailand. You'll lose it within the first year, because when you're out, someone will break in. Nobody cares about the single farang and nobody will look out for your house and property. The other ex-pats have local family to do these things.

Rent.

kenk3z

I agree about the renting suggestion for the same reasons and others. But - isn't the comment about property safety a tad sweeping? Sure, as in the UK, it will depend on the neighbourhood - but are you really saying that getting to know your neighbours and becoming part of the community is a] impossible and b] of no use when it comes to having a friendly eye kept on your house?

[johnnyk]

With regard to keeping the property in your family, make one or more other family members, brother etc (age 20+) board directors. There must be a way they can take over after you croak. Maybe just make your brother the Managing Director when you are old but you have the right to rent the house from the company until you pop off.

The company you form to buy the house MUST NOT be more than 39% falang-owned. The Land Office investigates land-owning companies that have 40+% falang ownership. No worries, structure the articles of association with preferred shares so you have all control.

Not any more. 49% is now accepted without further investigation. You are right that that used to be the case though.

I hadn't heard, when was this changed?

[udon]

You should probably strike a compromise with yourself and negotiate the idea of renting for the first one or two years. The worst thing I can think of is coming in to Thailand with a load of cash and buying a house quickly, only to find out the agent told you nothing of the issues with the neighbors, etc. etc.

If you come in and rent, you can try out a few different areas and pick a situation that you'll like for a long time. I'm hoping that you are not going to transfer a household full of valuable property and keepsakes from the UK to Thailand. You'll lose it within the first year, because when you're out, someone will break in. Nobody cares about the single farang and nobody will look out for your house and property. The other ex-pats have local family to do these things.

Rent.

kenk3z

Good advice, rent for a minimum of 18 months and you will learn a lot! and maybe save a lot of probs and $$$$$$.

[Dragonman]

With regard to keeping the property in your family, make one or more other family members, brother etc (age 20+) board directors. There must be a way they can take over after you croak. Maybe just make your brother the Managing Director when you are old but you have the right to rent the house from the company until you pop off.

The company you form to buy the house MUST NOT be more than 39% falang-owned. The Land Office investigates land-owning companies that have 40+% falang ownership. No worries, structure the articles of association with preferred shares so you have all control.

Not any more. 49% is now accepted without further investigation. You are right that that used to be the case though.

I hadn't heard, when was this changed?

It hasn't strictly changed, it's just that the Land Office can't be bothered as everyone knows it is a "Mickey Mouse" Company when they see you are a property rental company. As it's only internal policy it can change back any time, and I would still see it better to follow the 39% route.

Is it legal for a company to buy a house as an investment not related to its chartered purpose and then give the Managing Director the right to live in it as part of his compensation package?

I see nothing wrong with this, as long as the tax implications for Company and Managing Director are considered by the Company Accountant.

[Sumitr Man]

Is it legal for a company to buy a house as an investment not related to its chartered purpose and then give the Managing Director the right to live in it as part of his compensation package?

I see nothing wrong with this, as long as the tax implications for Company and Managing Director are considered by the Company Accountant.

On this note, one area that is often overlooked is the Transfer Pricing Regulation No. Paw. 113/2545 (dated May 16, 2003). In short, the TPR determines what is considered an "acceptable" charge for services performed between "related" parties. As such, to avoid the TPR, as director of the company and rentor of the propert, to be safe you need to have an estate agent provide you with a market rental rate for the property.

SM

[Bobcat]

Not any more. 49% is now accepted without further investigation. You are right that that used to be the case though.

This is correct. It was the case in the past that the Land Department would not register land to a company with foreign ownership of 40% or more without getting the okay from the big wigs at the land Department. The rule was, however, abolished in 2003.

[Dragonman]

Not any more. 49% is now accepted without further investigation. You are right that that used to be the case though.

This is correct. It was the case in the past that the Land Department would not register land to a company with foreign ownership of 40% or more without getting the okay from the big wigs at the land Department. The rule was, however, abolished in 2003.

Whilst I understand the concept of the law regarding the 49% and how it should be applied countrywide, my experience does not follow the logic that all land offices should work under the same rules. Is there some 2003 Memorandum from the Central Land Office giving instructions for the abolition of investigations, or as normal is it just word of mouth and "up to you".

[Bobcat]

It hasn't strictly changed, it's just that the Land Office can't be bothered as everyone knows it is a "Mickey Mouse" Company when they see you are a property rental company. As it's only internal policy it can change back any time, and I would still see it better to follow the 39% route.

The regulation was formally abolished in 2003. I have seen the written notice of abolishion and can assure you that this rule is no longer on the books. However, I do not know if all branches of the Land Department outside of Bangkok and the other major centres are aware. I regularly transfer land to 49/51 companies in Bangkok, Chiang Mai, Hua Hin and Phuket and the Land Department in all of these places accepts the 49/51 structure.

regards,

Bob

Edited January 8, 2006 by Bobcat

[madforit]

kenk3z - I'm finding the following quite depressing news :-

"I'm hoping that you are not going to transfer a household full of valuable property and keepsakes from the UK to Thailand. You'll lose it within the first year, because when you're out, someone will break in. Nobody cares about the single farang and nobody will look out for your house and property. The other ex-pats have local family to do these things."

Have you had a problem? I lived in Thailnd for 3 years, by myself, and never had a problem. Is it something I should be worried about.

Whilst I appreciate the sentiment about renting, I'm already comfortable with the situation over there - the only thing that is a concern at the moment is the work, and so long as I can get a job I like then everything else is already ok. Yes, I'll rent for a short while, but I reckon I'll be buying within 6 months, so long as the job is ok. I need some stability in my life at the moment, so owning a place is very high up on my list of priorities.

Anyway, thanks all for the advice.

Cheers

Paul

[udon]

Paul.

A job might give you some stability but I fail to see how buying a house wihin 6 months will.

If you buy a house within 6 months of arrival, I think you are in for a bad time.

Just my 2 satang.

[madforit]

Paul.

A job might give you some stability but I fail to see how buying a house wihin 6 months will.

If you buy a house within 6 months of arrival, I think you are in for a bad time.

Just my 2 satang.

Ok, the stability issue is a personal one, nothing really to do with this forum, you'll have to trust me on that one What I'm not sure about is why waiting any longer would apparently give me more stability - after all, I'm happy with livign in the country, so it's only the job that's an issue - if I'm still happy in the job after 4 months or so then I know that I'll be happy with everything else.

In any case, we're digressing - my original question was intended to explore the option for owning a property, not renting!

Thanks for the input anyway.

Cheers

Paul

[silk123]

Screw this house thing with company loopholes.

Everytime i get interested in buying a house here all the acting like a snake with laws push me away from buying.

It just makes more common sense to leave the money in the uk earning the 5% and continue renting even if it's nice to own where we stay.

I've looked at condos also but the small size and noise just isn't for me and i know i think i would likely just move away from the condo after buying back to a decent rental house.

Sorry for being negative but that having to snake ass with laws just seems patethic in this day and age. I know it's to protect the Thai's interest so that's fair enough. English people wouldn't feel comfortable if all their neighbours moved away and if all dark skinned real africans from africa maybe that struck oil with machine guns shouting jehad moved in.

What about relaxing the laws on samui or Phuket island and letting foreigners buy houses for real rather than a half ass company owning it.

ah screw it.

[madforit]

Screw this house thing with company loopholes.

Everytime i get interested in buying a house here all the acting like a snake with laws push me away from buying.

It just makes more common sense to leave the money in the uk earning the 5% and continue renting even if it's nice to own where we stay.

I've looked at condos also but the small size and noise just isn't for me and i know i think i would likely just move away from the condo after buying back to a decent rental house.

Sorry for being negative but that having to snake ass with laws just seems patethic in this day and age. I know it's to protect the Thai's interest so that's fair enough. English people wouldn't feel comfortable if all their neighbours moved away and if all dark skinned real africans from africa maybe that struck oil with machine guns shouting jehad moved in.

What about relaxing the laws on samui or Phuket island and letting foreigners buy houses for real rather than a half ass company owning it.

ah screw it.

Well, yeah, I know you're right..I know all the posts on this subject that say "Rent, don't buy" are right. It's a pain in the you-know-what to buy in Thailand. I can understand the government not wanting foreigners to own land in the LOS but why not automatically issue, say a 100 year lease when you buy a property, with a loophole that the government can buy back, at market rate, the property at any time (with suitable notice) ??? That would give them the security of knowing they could kick out all the franags if they wanted, but would at least let people come and buy a house without all the current mucking around that has to go on.

I'm planning to settle in the country, I won't be on a high wage, so don't want the monthly outgoing of rent. I also will only be able to work for a certain amount of years so wouldn't be able to afford rent once retired, so buying is really the only sensible option for me. I also want a place I can work on to make my own, not possible with a rented property, and I don't want to be at the mercy of a landlord.

Ah well, another couple of months left in the UK to earn enough cash to pay my tax bill then I'm off. I'll worry about it when I get there!

Cheers

Paul

[N&M]

Well, being single and wanting to own land, I would in the end settle for either a condo or a villa in Phuket. You said there are not many, bullcrap, there are hundreds and you can arrange them with whatever setup they recommend and you consider ok. Many of these are in developments and have leases and yadda yadda via offshore companies yadda yadda.

But as for owning a slice of LAND with a house on it seperate from all around. I would forget it.

I have land here, I had the choice of going purely in the wifes name or via the company and least etc etc route. I chose the missus. I trust her more than I do the officials and governments departments in this country. The simplest ruel here seems to be, that with Chanote title, once her name appears on the deed with no encumberances against it listed on the title, then it is hers in its entirety and she can do what she wnats with it.....shit, scary really

[madforit]

Well, being single and wanting to own land, I would in the end settle for either a condo or a villa in Phuket. You said there are not many, bullcrap, there are hundreds and you can arrange them with whatever setup they recommend and you consider ok. Many of these are in developments and have leases and yadda yadda via offshore companies yadda yadda.

But as for owning a slice of LAND with a house on it seperate from all around. I would forget it.

I have land here, I had the choice of going purely in the wifes name or via the company and least etc etc route. I chose the missus. I trust her more than I do the officials and governments departments in this country. The simplest ruel here seems to be, that with Chanote title, once her name appears on the deed with no encumberances against it listed on the title, then it is hers in its entirety and she can do what she wnats with it.....shit, scary really

Hi. I've looked already looked extensively into the housing (not condo) market, done the research. I already have arranged to view several houses when I'm out there in March. I don't want a condo as I don't like living in an apartment due to noise, communal areas etc. I have mainly been looking at places on gated estates as I like the extra security and the communal facilities offered by these places.

But, going back to my original post, the thread title is "Options for a SINGLE guy to purchase property", so telling me about your missus, nice though it is, doesn't really help me a great deal, thanks.

Paul

P.S. Don't appreciate the bullcrap comment by the way!

[silk123]

I'm single and at moment am considering a house for sale nearby. I have the asking price and the gf knocked it down about 10% so it could go further.

The company thing smells bad so if i was to put it in the gf name and then lease from her it is max of 30 years and not life i take it. If i broke up with her down the road as people do could she upset me in the house some way. Like burn it or something.

The company thing is a mess from this side and that confusion between life and 30 years.

Them chinese runners of this country think westerners are evil. Some of us have things to give. they should take them things. That does sound like chinese talk alright. I still like the chinese guys even if they do think terrible things like that.

Shame we can't invest in the contry right without all the underhand laws and silliness throw at us.