Have to transfer some money from europe to Thailand .. is the baht will go on get lower ?

[alex777]

Hello there,

I'm far from being an expert concerning money stuff and my knowledge is very limited. So excuse me if my question may sound dumb.

I have to make a transfer of 5.000 euros from Europe to my Thai saving account.

The fact is I am not in a hurry.

On one side the actual situation in Thailand is quite sad, on the other hand the Baht is definitely tumbling down. I follow the situation everyday, and everyday it is getting lower.

So as you may already understand, my question is to know if I have to launch my transfer now, or should I wait a little more as the Thai baht may decrease even more in the coming days ?

My guess is that it will decrease again and again at least until the february voting, but then again, I'm far far far from being an economy and poltical expert.

best regards,

Alex

[Asiantravel]

No one can know for sure but you only need to ask yourself what reasons are there for the baht to appreciate or even stabilise while the prospects of serious violence seem to be increasing every day? There may not even be an election so if you can it may pay you to wait and see.

[davejones]

I'd wait and the transfer when it seems to be turning the other way. You'll never get it right, but might get close. On the other hand it may turn down and then back up to 70. How long can you wait? A month, a year, a decade. All depends really. The longer your timeframe, the more up and down t's likely to go. Does an extra few % really matter to you?

[fish fingers]

the baht may drop further before the election against other currencies in general, BUT the euro is now getting stronger so you have to take that into account

Edited December 27, 2013 by fish fingers

[fish fingers]

copied from Siam legal, what concerns me is whilst everyone seems to do this in thailand, if I'm signing a contract with the agent with one figure, and signing a land registry declaration with another.. is my main contract worthless?

WHY UNDER-DECLARE?

The practice of under-valuing the price of a property is not an isolated phenomenon. Many countries around the world such as Spain, Bulgaria and other popular foreign property markets have been doing this for decades. Authorities have a challenging goal of balancing sustainable growth in prices versus the actual exponential growth caused by heated foreign investment. Property markets can very easily burst its bubbles if prices are not kept in line with the rate of growth in the country’s per capita Gross Domestic Product (GDP) rate. Another aspect to consider is the PPP or Price Purchasing Parity in line with the GDP. This measures the buying power of locals within the market. If property prices become too high, local citizens would find it difficult to afford a house. These are just some of the many issues economists and bureaucrats have to consider.

Economics aside, the reason for individual parties are much simpler. To reduce the tax burden. Sellers often insist on using the assessed value because they will end up paying less tax on the transfer, particularly if they also have to pay a Specific Business Tax for owning the property for less than five years. Something similar to a capital gains tax. You may think this is not such a bad deal either because your share of the tax burden is significantly reduced as well. So the question remains, does the fact that it is common practice make it a good practice?

POLITICAL CLIMATE

.

Your estate agent or seller will most likely tell you that this is just how things are done in Thailand. The person who sold the property to them did it and now they’re doing it and in the future, you would do it too. The cycle just continues. But what if the cycle ends with you? Thailand is undergoing some serious tax amendments following the 73.3 billion baht sale of Shin Corp to Temasek Holdings in 2006. There were a number of allegations regarding tax fraud which hitherto had been largely acceptable and practiced widely. Public opinion on the matter has shifted widely since and the courts also have an obligation to take public policy into account.

Imagine the government begins to clamp down on under-declaring prices next year so when you sell your property in the future you can only declare the true value. Your capital appreciation would be quite substantial and even though Thailand has no capital gains tax per se, the appreciations are calculated as part of your income with progressive rates of up to 37%. You may just find yourself short-changed at the end of the day.

LEGAL IMPLICATIONS

If that’s not enough, under declaring the value of a property may have some legal implications. Tax attorneys anywhere will tell you that there is a fine line between tax avoidance and tax evasion. That is largely true and probably why they get paid so much. Despite this, under the Revenue Code of Thailand, it defines tax evasion as the act of making a false statement, giving false answers, or producing false statements with the view of evading payments of tax. Although no precedents exist for the false declaration of the price on property transfers, it could only be a matter of time.

Section 104 of the Land Code also aims to curb this practice. In it, it states that any persons recording any rights with regards to land for the purpose of paying the fees shall show the true value in accordance with the market price at that time. It also allows the competent official the power to assess this by obtaining any relevant witnesses and evidence required. Under both codes, fines and imprisonment may ensue if proven.

IS IT WORTH IT?

There are a few considerations involved. If you opt to go with common practice, you may be able to save yourself some money at the start. There is also the mentality which may be difficult to change. Local sellers, for example, may insist on using the assessed value and would not go ahead with the deal otherwise. It may take some time for this to change but it is perhaps only a question of time. At the end of the day, it is a question of risk. Is the fact that it is common practice reason enough for you to do it or do the legal and financial implications in the future outweigh any benefits you will gain in the short term? Whether to accept the cultural and dominant practice or insist on following the letter of the law is a delicate choice for any foreign buyer. However, for any astute buyer, it is always considered wise to follow the legal procedures, even if the locals don’t think it’s necessary. It’s just a simple matter of protecting your own interest.

[moradave]

Wait to see how election turns out and how Obamacare fares before divesting yourself of Euros.

[koo]

I would wait. The xfer rate is now about 45 baht to the euro, and the political turmoil in Thailand seems to estimate that it may go to even 47 soon.

[redcardave]

when you send £ to thailand you get a better rate ive just sent money over to thailand dont let the bank exchange it till it gets to thailand the uk bank offered me 42bht / £ when it got to thailand then exchanged it i got 47.26 bht to the £ hope this helps.

[cassde]

The exchange rate for baht is plummeting, now at 54 baht to each £ - it is likely to go down further with the political uncertainty, but you have also to weigh up the strength of the Euro which will effect the baht also.

[SheungWan]

hold the euros.

[garyk]

I imagine most farang are thinking the same thing.

[i claudius]

I long for the day that there is no such thing as a Euro, and every country goes back to being their own master.

[Pinot]

You can't predict the baht or any other currency. You can see the trend now but that can change overnight. Rather than try and time the buy, I would do what financial people recommend when someone wants to buy a stock. Buy it gradually with smaller purchases until you reach your goal. This method is called dollar cost averaging. Bring in 10k a month or stretch it out over a year. A bird in the hand...

[jingjoke]

^ 'A bird in the hand...' will do you dirt.

[MeowBundit]

Nothing to discuss about such a small amount. If you need them here in THB for living, why not to transfer. If you not need them here just do not do this.

[Gonsalviz]

I'd wait and the transfer when it seems to be turning the other way. You'll never get it right, but might get close. On the other hand it may turn down and then back up to 70. How long can you wait? A month, a year, a decade. All depends really. The longer your timeframe, the more up and down t's likely to go. Does an extra few % really matter to you?

If I transfer $9500 at 32.7 and 9500 at 30.0 there is a difference of 25,650 Baht. I'd say that is significant.