Userfruct And Paying Tax To The Tessaban?

[vistana]

Hi

I am hoping some of the forum members here with userfructs can offer a comment or advice on something that has just been told to my wife when she went to our local Tessaban.

Our house and land are owned by my wife with a chanote and we added on a userfruct agreement about 4 years ago and got it noted etc with the local land office, no problem, but the Tessaban are now saying that because we have a userfruct for the farang living in the house its similar to if a farang owned the house using a limited company and so we are liable to pay 9,000 baht tax every year the same as people with limited companies, and they will back date it from the date of the userfruct!

Something else the lady said to my wife was that if she came to the office early she would only have to pay the current years tax and she would write off the earlier years..... does this sound a bit of a scam to you guys as well?

I would be grateful for any advice and info other members who know about userfructs could give us and if this is just a scam or have they recently change the law!

Thanks guys

[cardholder]

SCAM.

I have never paid a Satang in 5 years...

[BEVUP]

I take it Tessaban is same as amphur

Same here never paid anything in 5 yrs

SCAM

[harrry]

Not necescarily a scam.

My MIL has her home and two other homes on a block She was renting the two homes and lives in one. She had to pay tax on the two rental ones.

We converted one of the rental homes into a more comfortable place for us and my wife when she went to pay taxes for her mother asked about not paying tax on it and was told as the chanote was still in her father's name she had to pay (400baht on a rental value 0f 1500b a month) as only the person named on the chanote gets the tax concession in one house.

It is quite possible they look on a userfruct in the same way.

With this kind of tax most people do not pay every year...it mounts up till the land is transferred etc but there still is tax due.

Edited February 2, 2013 by harrry

[jamescollister]

It may very well not be a scam, many taxes are not collected here, but are on the books.

Usufruct is a right to enjoy and profit from land, profit is make money. No reason they could not deem the profit and then tax the deemed profit.

Get your wife to go and cancel the usufruct, it's useless anyway, gives no protection to a farang if it is land owned by the wife. Jim

[Pib]

I take it Tessaban is same as amphur

Same here never paid anything in 5 yrs

SCAM

Ditto also...5 years also...I'm in Bangkok.

Edited February 2, 2013 by Pib

[TommoPhysicist]

Do you trust your wife?

She could be lying in order to manipulate you.

Edited February 2, 2013 by TommoPhysicist

[jamescollister]

Can't find the tax rules for usufruct, but here are the rules for lease hold, may very well be the same for usufructs.

The bit about otherwise put it to commercial use my cover it. Usufructs are not about housing, but using the land.

Thailand Property Taxes

Housing and Land tax in Thailand

BUILDING OR HOUSING AND LAND TAX is collected yearly by the local government where the property is located. For individual property owners if they lease out their property (or otherwise put to commercial use) Housing and Land Tax shall be collected at the rate of 12.5% of the yearly rental according to the lease agreement or the annual assessed value by the local authorities, whichever is higher. This means that if the owner's self-declared value is too low the local authories have the authority and calculation methods to adjust the amount. Owner-occupied residences are exempt from building and land tax, however the second and more properties are not automatically exempt.

It is the owners responsibility to inform the local authorities (Or.Bor.Tor) if the property is leased out or otherwise is put to commercial use and pay this 'rental tax' before the end of February each year. Generally this tax burden in Thailand is passed on to the tenant/ lessee in the lease agreement.

Note that the current building and land tax will be replaced (expected 2011) by a new asset based property tax read more

[vistana]

Thanks guys for all your advice and comments please keep them coming, I think we might need to consult a reputable lawyer soon, provided we can find a good one here in Hua Hin!

I don't really want to take off the userfruct but if it that is what it takes then that might be our best option.... and pay the 9,000 baht for this years tax and have the earlier years wiped off!..... or is this a scam and the 9,000 baht goes in the ladies pocket.... and there never was any earlier years to worry about....

Keep the advice coming, and thank again to everyone who have made helpful comments.

[Khun Jean]

Get a receipt with a stamp. Hard for the lady to put it in her pocket that way.

No receipt, no money.

Edited February 2, 2013 by Khun Jean

[jamescollister]

Thanks guys for all your advice and comments please keep them coming, I think we might need to consult a reputable lawyer soon, provided we can find a good one here in Hua Hin!

I don't really want to take off the userfruct but if it that is what it takes then that might be our best option.... and pay the 9,000 baht for this years tax and have the earlier years wiped off!..... or is this a scam and the 9,000 baht goes in the ladies pocket.... and there never was any earlier years to worry about....

Keep the advice coming, and thank again to everyone who have made helpful comments.

Doubt it's a scam, Government here is just enforcing rules and laws more often. Just like the west they want their tax.

You must remember that many laws here are just copies of western laws and I would bet you would be paying a lot more in the west.

As said usufruct gives no protection for a farang, just avoid it [cancel], pay the tax you owe. You don't want Government looking into things. It could mean more problems down the line. Jim

[diddums]

Do you know how easy it is here to get copy receipt books and stamps made ?

[cardholder]

Thanks guys for all your advice and comments please keep them coming, I think we might need to consult a reputable lawyer soon, provided we can find a good one here in Hua Hin!

I don't really want to take off the userfruct but if it that is what it takes then that might be our best option.... and pay the 9,000 baht for this years tax and have the earlier years wiped off!..... or is this a scam and the 9,000 baht goes in the ladies pocket.... and there never was any earlier years to worry about....

Keep the advice coming, and thank again to everyone who have made helpful comments.

Doubt it's a scam, Government here is just enforcing rules and laws more often. Just like the west they want their tax.

You must remember that many laws here are just copies of western laws and I would bet you would be paying a lot more in the west.

As said usufruct gives no protection for a farang, just avoid it [cancel], pay the tax you owe. You don't want Government looking into things. It could mean more problems down the line. Jim

Jim, I suspect that Isaan Lawyers would disagree with your assertion. Did you have some specific evidence, or experience, to support the above comment ?

Regards CC

[jamescollister]

Thanks guys for all your advice and comments please keep them coming, I think we might need to consult a reputable lawyer soon, provided we can find a good one here in Hua Hin!

I don't really want to take off the userfruct but if it that is what it takes then that might be our best option.... and pay the 9,000 baht for this years tax and have the earlier years wiped off!..... or is this a scam and the 9,000 baht goes in the ladies pocket.... and there never was any earlier years to worry about....

Keep the advice coming, and thank again to everyone who have made helpful comments.

Doubt it's a scam, Government here is just enforcing rules and laws more often. Just like the west they want their tax.

You must remember that many laws here are just copies of western laws and I would bet you would be paying a lot more in the west.

As said usufruct gives no protection for a farang, just avoid it [cancel], pay the tax you owe. You don't want Government looking into things. It could mean more problems down the line. Jim

Jim, I suspect that Isaan Lawyers would disagree with your assertion. Did you have some specific evidence, or experience, to support the above comment ?

Regards CC

I would think they just forgot to mention section 1469 of the Thai civil and commercial code as they take your money.

Section 1469. Any agreement concluded between husband and wife during marriage may be avoided by either of them at any time during marriage or within one year from the day of dissolution of marriage; provided that the right of third persons acting in good faith are not affected thereby.

If you ask about this, then they will say it has never been tested in court. I wonder why it has never been tested.

Could be that you would not be contesting the usufruct, but a high court challenge to the law. Snow balls chance in hell of telling the high court that the law is wrong and you as a farang are right, never mind the cost. Jim

[robblok]

Thanks guys for all your advice and comments please keep them coming, I think we might need to consult a reputable lawyer soon, provided we can find a good one here in Hua Hin!

I don't really want to take off the userfruct but if it that is what it takes then that might be our best option.... and pay the 9,000 baht for this years tax and have the earlier years wiped off!..... or is this a scam and the 9,000 baht goes in the ladies pocket.... and there never was any earlier years to worry about....

Keep the advice coming, and thank again to everyone who have made helpful comments.

Doubt it's a scam, Government here is just enforcing rules and laws more often. Just like the west they want their tax.

You must remember that many laws here are just copies of western laws and I would bet you would be paying a lot more in the west.

As said usufruct gives no protection for a farang, just avoid it [cancel], pay the tax you owe. You don't want Government looking into things. It could mean more problems down the line. Jim

Jim, I suspect that Isaan Lawyers would disagree with your assertion. Did you have some specific evidence, or experience, to support the above comment ?

Regards CC

I would think they just forgot to mention section 1469 of the Thai civil and commercial code as they take your money.

Section 1469. Any agreement concluded between husband and wife during marriage may be avoided by either of them at any time during marriage or within one year from the day of dissolution of marriage; provided that the right of third persons acting in good faith are not affected thereby.

If you ask about this, then they will say it has never been tested in court. I wonder why it has never been tested.

Could be that you would not be contesting the usufruct, but a high court challenge to the law. Snow balls chance in hell of telling the high court that the law is wrong and you as a farang are right, never mind the cost. Jim

This is also what i know.. only when you do it before the marriage it will work else its not worth the paper its printed on.

[diddums]

Jim, I suspect that Isaan Lawyers would disagree with your assertion. Did you have some specific evidence, or experience, to support the above comment ?

Regards CC

I suspect a 1k baht fee might have something to do with it.

This is also what i know.. only when you do it before the marriage it will work else its not worth the paper its printed on.

Common law relationship comes to mind to argue further

[mackes]

I believe that it is some ubersmart officer at the land office trying to refresh his budget. Unfortunatly there are a high grade of room for personal initiative everywhere here in Thailand.

I doubt that the argument you mentioned in the OP will be valid in a courtroom, the question is do you want to go there.

I believe the best you can do is to tell them that you spoked to your lawyer and he instructed you not to pay as it is an illegal request.

Then see what happen, if the guy have balls to drive it through. I doubt. If so, the situation is not worse than before.

This is a kind of blackmailing so often used against farangs, they are rich, they don't care...

[TommoPhysicist]

I believe the best you can do is to tell them that you spoked to your lawyer and he instructed you not to pay as it is an illegal request.

Unfortunately it is the OP's wife doing the business, and I doubt she would say BOO to anyone in a government office.

[jamescollister]

Robblok, I have read a fair bit on the subject, doing it through a G/F or other person has problems.

Not heard or read of banks or building companies giving usufructs. They are really for farming, quarry's and mining, nothing to do with rights of habitation.

Thailand does not allow foreigners to own or control land and all the schemes in the world will not change that.

Worse is the fact that in trying to do so, you maybe breaking criminal laws and some day in the future that person may be held accountable.

Trust your wife, G/F or rent. Jim

[jamescollister]

I believe that it is some ubersmart officer at the land office trying to refresh his budget. Unfortunatly there are a high grade of room for personal initiative everywhere here in Thailand.

I doubt that the argument you mentioned in the OP will be valid in a courtroom, the question is do you want to go there.

I believe the best you can do is to tell them that you spoked to your lawyer and he instructed you not to pay as it is an illegal request.

Then see what happen, if the guy have balls to drive it through. I doubt. If so, the situation is not worse than before.

This is a kind of blackmailing so often used against farangs, they are rich, they don't care...

That's an approach that may see the OP in handcuffs. If he signed a statement saying the money for the land was a gift and he made no claim to the land. Then went and made a claim by usufruct, he signed a false statement. That's a crime anywhere in the world.

Local Government person could report that to his/her husband, wife, brother, cousin, friend, cop. The cuffs could go on, don't make waves unless you have family or friends in high places.

Remember most of us are guests in the country, visas or extension of stay do not have to be given and an arrest for a criminal charge may see you deported or no new visa issued.

Stay legal and say safe. No some people who have been refused entry into Thailand other than a 30 day tourist visa. Jim

[robblok]

Robblok, I have read a fair bit on the subject, doing it through a G/F or other person has problems.

Not heard or read of banks or building companies giving usufructs. They are really for farming, quarry's and mining, nothing to do with rights of habitation.

Thailand does not allow foreigners to own or control land and all the schemes in the world will not change that.

Worse is the fact that in trying to do so, you maybe breaking criminal laws and some day in the future that person may be held accountable.

Trust your wife, G/F or rent. Jim

James, i am agreeing with you. But if you do it before they are married, then it is valid. As far as i heard that is.

[jamescollister]

Robblok, I have read a fair bit on the subject, doing it through a G/F or other person has problems.

Not heard or read of banks or building companies giving usufructs. They are really for farming, quarry's and mining, nothing to do with rights of habitation.

Thailand does not allow foreigners to own or control land and all the schemes in the world will not change that.

Worse is the fact that in trying to do so, you maybe breaking criminal laws and some day in the future that person may be held accountable.

Trust your wife, G/F or rent. Jim

James, i am agreeing with you. But if you do it before they are married, then it is valid. As far as i heard that is.

Maybe valid if you did not pay for the land, if the G/F owned it before you met her. If you gave her money to buy the land different story. You are not allowed to use a Thai to buy land for a foreigner to control.

Some big land buys using Thais have been confiscated by Thai courts and we are talking big. If they can not get away with it not much chance of little house owner wining.

As said have a house and over 100 rai, looked at everything. Have a limited Partnership Company. In reality I would be lucky to keep the toilet seat.

Have 2 small kids and if things went bad so sad, wife, kids number one, I can live in a hut in one of the plantations. Jim

[robblok]

Robblok, I have read a fair bit on the subject, doing it through a G/F or other person has problems.

Not heard or read of banks or building companies giving usufructs. They are really for farming, quarry's and mining, nothing to do with rights of habitation.

Thailand does not allow foreigners to own or control land and all the schemes in the world will not change that.

Worse is the fact that in trying to do so, you maybe breaking criminal laws and some day in the future that person may be held accountable.

Trust your wife, G/F or rent. Jim

James, i am agreeing with you. But if you do it before they are married, then it is valid. As far as i heard that is.

Maybe valid if you did not pay for the land, if the G/F owned it before you met her. If you gave her money to buy the land different story. You are not allowed to use a Thai to buy land for a foreigner to control.

Some big land buys using Thais have been confiscated by Thai courts and we are talking big. If they can not get away with it not much chance of little house owner wining.

As said have a house and over 100 rai, looked at everything. Have a limited Partnership Company. In reality I would be lucky to keep the toilet seat.

Have 2 small kids and if things went bad so sad, wife, kids number one, I can live in a hut in one of the plantations. Jim

Jim, i am talking about if she had the land before. Anyway i am just an accountant and no legal expert. I wont go into a discussion that is futile. I would say unsfructs would work if the land was not of your gf, Thing is otherwise like you said you have odds stacked against you.

[Morden]

Tessaban and Land Office are not the same. The Amphur has nothing to do with land ownership and taxes. If the land is registered at the Tessaban then the title is not Chanoet but something less.

We have chanoet land and have never been asked to pay tax of any kind. We also have some land registered at a Tessaban and the annual tax is THB50 for three rai worth THB1m per rai.

Despite what one poster wrote, usufruct is well worth having for several reasons. It entitles you to occupy and care for the property during your lifetime. It's also a useful device, for those who feel they may need it, to put off would be buyers and money lenders and is perfectly legal. You can enter into a usufruct agreement with any landowner, not just a wife or girlfriend.. Now, even if you trust your wife as much as I trust mine, there may still be a problem if she predeceases you. The family and scooter boy husbands of daughters will be round the property like flies around a dustbin. Usufruct is a contract between you and the land owner, registered at the Land Office and noted on the Chanoet. Copies of the standard wording are available at land Offices and can be amended as required.

There is no tax for registering the usufruct other than the initial processing fee. What you were told about tax at Tessaban is nonsense unless there's something I have yet to encounter. Usufruct is a private contract registered at the Land Office. It does not state or imply that ownership has changed and, other than registration, has nothing to do with any government department.

I can't say whether usufruct contracts are accepted for registration at Tessaban as they are at the Land Office. If they are not, then the other option is a 30 year renewable lease. I believe that involves a small annual tax.

You, the OP, have said that the land has chanoet and is registered at Tessaban rather tnha the Land Office. You need to get that clear. The chanoet document is large format, two sided and the paper is eggshell blue.

I hope that helps.

Edited February 2, 2013 by Morden

[jamescollister]

Robblok, I have read a fair bit on the subject, doing it through a G/F or other person has problems.

Not heard or read of banks or building companies giving usufructs. They are really for farming, quarry's and mining, nothing to do with rights of habitation.

Thailand does not allow foreigners to own or control land and all the schemes in the world will not change that.

Worse is the fact that in trying to do so, you maybe breaking criminal laws and some day in the future that person may be held accountable.

Trust your wife, G/F or rent. Jim

James, i am agreeing with you. But if you do it before they are married, then it is valid. As far as i heard that is.

Maybe valid if you did not pay for the land, if the G/F owned it before you met her. If you gave her money to buy the land different story. You are not allowed to use a Thai to buy land for a foreigner to control.

Some big land buys using Thais have been confiscated by Thai courts and we are talking big. If they can not get away with it not much chance of little house owner wining.

As said have a house and over 100 rai, looked at everything. Have a limited Partnership Company. In reality I would be lucky to keep the toilet seat.

Have 2 small kids and if things went bad so sad, wife, kids number one, I can live in a hut in one of the plantations. Jim

Jim, i am talking about if she had the land before. Anyway i am just an accountant and no legal expert. I wont go into a discussion that is futile. I would say unsfructs would work if the land was not of your gf, Thing is otherwise like you said you have odds stacked against you.

One thing to remember is a usufruct only covers immovable property, soil, dirt, trees and plants, etc. For the purposes of a usufruct houses and buildings are movable. Land owner can move them to the side of the road, no court order needed.

As said on another thread, look at habitation rights, haven't read up on them, but they may have more promise. Jim

[mackes]

I believe that it is some ubersmart officer at the land office trying to refresh his budget. Unfortunatly there are a high grade of room for personal initiative everywhere here in Thailand.

I doubt that the argument you mentioned in the OP will be valid in a courtroom, the question is do you want to go there.

I believe the best you can do is to tell them that you spoked to your lawyer and he instructed you not to pay as it is an illegal request.

Then see what happen, if the guy have balls to drive it through. I doubt. If so, the situation is not worse than before.

This is a kind of blackmailing so often used against farangs, they are rich, they don't care...

That's an approach that may see the OP in handcuffs. If he signed a statement saying the money for the land was a gift and he made no claim to the land. Then went and made a claim by usufruct, he signed a false statement. That's a crime anywhere in the world.

Local Government person could report that to his/her husband, wife, brother, cousin, friend, cop. The cuffs could go on, don't make waves unless you have family or friends in high places.

Remember most of us are guests in the country, visas or extension of stay do not have to be given and an arrest for a criminal charge may see you deported or no new visa issued.

Stay legal and say safe. No some people who have been refused entry into Thailand other than a 30 day tourist visa. Jim

It seems to me that you do not know what you talking about and certainly not about usufructs.

There is a reason why it is allowed for foreigner to register a usufruct, there is nothing illegal about that. However some Thai officials interpret the law in their own way.

The case is that a women owns land and married to a foreigner. As the foreigner is not allowed to take the ownership of the land if his wife passes away before him the jucyfruct will protect him during his lifetime from other relatives sell the land and throw him out.

If you read the paperwork on the usufruct there is no mentions about taxes and that was not what the official claim, they made a comparison with a company wich in my ear is very farfetched. To say no to this or to ask to have it proven will not put you in handcuffs.

[jamescollister]

Tessaban and Land Office are not the same. The Amphur has nothing to do with land ownership and taxes. If the land is registered at the Tessaban then the title is not Chanoet but something less.

We have chanoet land and have never been asked to pay tax of any kind. We also have some land registered at a Tessaban and the annual tax is THB50 for three rai worth THB1m per rai.

Despite what one poster wrote, usufruct is well worth having for several reasons. It entitles you to occupy and care for the property during your lifetime. It's also a useful device, for those who feel they may need it, to put off would be buyers and money lenders and is perfectly legal. You can enter into a usufruct agreement with any landowner, not just a wife or girlfriend.. Now, even if you trust your wife as much as I trust mine, there may still be a problem if she predeceases you. The family and scooter boy husbands of daughters will be round the property like flies around a dustbin. Usufruct is a contract between you and the land owner, registered at the Land Office and noted on the Chanoet. Copies of the standard wording are available at land Offices and can be amended as required.

There is no tax for registering the usufruct other than the initial processing fee. What you were told about tax at Tessaban is nonsense unless there's something I have yet to encounter. Usufruct is a private contract registered at the Land Office. It does not state or imply that ownership has changed and, other than registration, has nothing to do with any government department.

I can't say whether usufruct contracts are accepted for registration at Tessaban as they are at the Land Office. If they are not, then the other option is a 30 year renewable lease. I believe that involves a small annual tax.

You, the OP, have said that the land has chanoet and is registered at Tessaban rather tnha the Land Office. You need to get that clear. The chanoet document is large format, two sided and the paper is eggshell blue.

I hope that helps.

Amphor collects land taxes, not the land department. Land Department only registers who owns the land. ownership, lessees etc.

If your wife dies you will have 12 months to sell the land or the land office will wil sell it for you.

You pay taxes on all land, many areas do not bother to collect the land taxes as they are not worth the effort for such a small fee, in may case some land works out at 20 Baht a rai.

More than one usufuruct can be put on a piece of land and it does not cover housing. It's a right to use land for mining or farming.

Think you want to have a look at the civil code, you as a foreigner have not rights at at all, you can not make amendments to the usufruct agreement.

Think things have gone from stories the urban belief. Read the civil code and show where a farang can keep, own or control land. It ain't there. Jim

[vistana]

Morden.... Just to clarify things the userfruct was registered at the land office and not the Tessaban, sorry my mistake in the op.

Does that make any difference?.

And at present no business is being carried out at the house by my wife.... and certainly not me.It was just an idea my wife had to work from home.

Thanks

[Morden]

Morden.... Just to clarify things the userfruct was registered at the land office and not the Tessaban, sorry my mistake in the op.

Does that make any difference?.

And at present no business is being carried out at the house by my wife.... and certainly not me.It was just an idea my wife had to work from home.

Thanks

That would make sense. A chanoet is registered at the Land Office. An usufruct would then be registered at the same place. You take the usufruct document and the chanoet with copies and ID/Passport with copies and some cash. But not THB9,000!

If the officer persists in demanding a huge fee because a farang benefits from the usufruct, you should refuse.

[mackes]

Tessaban and Land Office are not the same. The Amphur has nothing to do with land ownership and taxes. If the land is registered at the Tessaban then the title is not Chanoet but something less.

We have chanoet land and have never been asked to pay tax of any kind. We also have some land registered at a Tessaban and the annual tax is THB50 for three rai worth THB1m per rai.

Despite what one poster wrote, usufruct is well worth having for several reasons. It entitles you to occupy and care for the property during your lifetime. It's also a useful device, for those who feel they may need it, to put off would be buyers and money lenders and is perfectly legal. You can enter into a usufruct agreement with any landowner, not just a wife or girlfriend.. Now, even if you trust your wife as much as I trust mine, there may still be a problem if she predeceases you. The family and scooter boy husbands of daughters will be round the property like flies around a dustbin. Usufruct is a contract between you and the land owner, registered at the Land Office and noted on the Chanoet. Copies of the standard wording are available at land Offices and can be amended as required.

There is no tax for registering the usufruct other than the initial processing fee. What you were told about tax at Tessaban is nonsense unless there's something I have yet to encounter. Usufruct is a private contract registered at the Land Office. It does not state or imply that ownership has changed and, other than registration, has nothing to do with any government department.

I can't say whether usufruct contracts are accepted for registration at Tessaban as they are at the Land Office. If they are not, then the other option is a 30 year renewable lease. I believe that involves a small annual tax.

You, the OP, have said that the land has chanoet and is registered at Tessaban rather tnha the Land Office. You need to get that clear. The chanoet document is large format, two sided and the paper is eggshell blue.

I hope that helps.

Amphor collects land taxes, not the land department. Land Department only registers who owns the land. ownership, lessees etc.

If your wife dies you will have 12 months to sell the land or the land office will wil sell it for you.

You pay taxes on all land, many areas do not bother to collect the land taxes as they are not worth the effort for such a small fee, in may case some land works out at 20 Baht a rai.

More than one usufuruct can be put on a piece of land and it does not cover housing. It's a right to use land for mining or farming.

Think you want to have a look at the civil code, you as a foreigner have not rights at at all, you can not make amendments to the usufruct agreement.

Think things have gone from stories the urban belief. Read the civil code and show where a farang can keep, own or control land. It ain't there. Jim

This comments that a foreigner in Thailand has no rights at all is totally nonsens! We are appplying to the same law as the Thais. However, when the law is not clear and it comes to a judgement of a court you are not in favour. But the usufruct agreement is clear without room for interpretations, you have the rights of this even if you are a foreigner.

Noone will buy a land he can not use, which is the case with a land wich have a usufruct agreement, so in practice it is not possible to sell the land before the usufruct expires.