Am I getting screwed by my land lady?

[fatdrunkandstupid]

I rent a big old commercial property in the heart of phuket town.

I rent from an elderly Thai Chinese lady who owns all of the buildings in my street. She is easily a multimillionaire in US dollars, but that is another issue.

Because I am in the very heart of old town there are no other farangs around. So I was a bit, hesitant about the area and signing a long term lease. I also didn't know the land lady.

Any way I signed a 3 month lease and every thing went alright (with the exception of Thais parking in my space, but that is business as usual).

The old lady has been good, and we only pay the government rate for our water and the government rate for electricity. Monthly water is ridiculouly cheap...about 60 baht. And the electricity is also cheap....usually under 700THB.

Anyway, after the first 3 month lease we signed another 3 month lease (because were not sure if we had to move for my girl's job).

That 3 month lease has just come to an end and, this morning we signed a six month lease with the old lady. She pressed for a lease longer than 3 months (it is a commercial property a big double storey shophouse) and I agreed but on the provision I could include an early termination (without penalty) clause in the contract. She agreed and we signed the new contract this morning.

After signing, she then advised my (Thai) girlfriend that we also must pay an annual (Land Tax?) which is 4500THB.

She owns the property so why should I paying a government land tax?

Anyway if anyone else has some experience with this same issue please post your views and advice.

Thanks in advance.

Cheers

FD&S

[JesseFrank]

I assume that she's the head of the office that collect that " land tax " .

[Briggsy]

What is the name of this tax in Thai?

[Sheryl]

Absolutely not customary for tenant to pay the land tax, it is the property owner who does this. And, of course, presumably takes that expense into account in calculating the rent that is charged.

If the rent you are paying is unusually low then you might agree to this, otherwise, should not.

[CharlieH]

Find out the name of that Tax in thai and check it out as suggested, but look at it this way, you have had a good relationship, yes she might be trying to tuck you up, but given how cheap everything else is (by your own admission), is 4500 baht worth arguing about and potentially rocking what has been a comfortable boat?

If its the principal then you do what you think is right, but me, check it out and for the sake of such a small amount its really not worth arguing or getting upset about. But that's just me.

[fatdrunkandstupid]

Had another look at the contract just then with my girl. There is a clause that when translated from Thai refers to Tenant paying any billboard tax and licence fees (eg a grog licence), but in this same clause there are the words "local tax".

So by the contract it would appear that I am liable for this local tax.

Anyone know whether this would be land tax?

[I Like Thai]

If it's not in the contract, then it doesn't exist as far as you are concerned.

Looks like it is in the contract after all

[Farma]

You mention the building is in the heart of Phuket town.

In a lot ot Thai cities the business districts are crown land. The buildings on that crown land can be bought and sold with the building owner long term leasing the land from the crown.

I wonder if the land tax is the crown land lease fee for the period you signed your lease.

[fatdrunkandstupid]

Find out the name of that Tax in thai and check it out as suggested, but look at it this way, you have had a good relationship, yes she might be trying to tuck you up, but given how cheap everything else is (by your own admission), is 4500 baht worth arguing about and potentially rocking what has been a comfortable boat?

If its the principal then you do what you think is right, but me, check it out and for the sake of such a small amount its really not worth arguing or getting upset about. But that's just me.

Yep, I hear you regarding not rocking the boat. However there is also the thin edge of the wedge concern. Don't want them to think the Farang is an easy touch. The charge is not a deal breaker, but I don't want to appear that I don't know my rights.

It also seems odd that the land lady only just mentioned this tax this time an not on the previous two occassions when we signed the 3 month leases.

Also we may be commencing a business here moving forward and so potentially we may well have a long relationship with the land lady.

When I originally took the place on, she gave me the lease that she used with the previous (Thai) tenant who was here for 10 years. I was happy about that because I am paying the same rent as that previous tenant and so their is no RAKA FARANG.

My girl is well educated with a bachelors and a masters degree. I also speak reasonable Thai. We translated the original lease in to english, and then I spent a good deal of time going through each clause to ensure we were happy with the content. We even changed some of the more onerous claused to soften them up in our favour.

However, I missed these two words "local tax" that are embedded in the clause that refers to other business related taxes or fees, which, of course should be paid by the person conducting business from the property.

At my behest, my girl will meet with the land lady tomorrow to discuss the details of this tax further. I will post a summary of the outcome of that discussion.

In the interim if anyone has anything to add. I am grateful for your input and advice.

[wym]

Yep, even if you weren't legally obligated to I'd still recommend it if you feel the deal's reasonable overall.

But in this case looks like you missed the clause.

FFR should always have such important contracts translated, even if only informally verbally by someone you trust.

I haven't signed a lease for ten years without penciling in negotiated modifications, always require the right to sub-lease if they don't have an early release, also ability to run a business there.

[speedtripler]

What is the name of this tax in Thai?

" farang tax "..........

[fatdrunkandstupid]

You mention the building is in the heart of Phuket town.

In a lot ot Thai cities the business districts are crown land. The buildings on that crown land can be bought and sold with the building owner long term leasing the land from the crown.

I wonder if the land tax is the crown land lease fee for the period you signed your lease.

No not crown land. The old duck owns most of my soi and the two behind it. Her great grandfather was one of the orginal tin miners here in Phuket. There are about 12 families that control the bulk of all property here in this island. All of them are the descendants of the successful miner ancestors. The property in question is right in the commercial district.

Among the properties she owns near me are two large Thai style apartment blocks. These each have more than fifty rooms. They are mid to upper price range rooms rented by young Thai people who work in the Banks, Malls and other such jobs. The rent on these rooms starts at 4k a month and some of the large rooms are 5k5 a month. So the old duck collects at least a half million baht a month in rent just on the apartments.

And get this, her husband gets around on a 30 year old honda dream (bald tyres no headlight), no shirt, shorts and flip flops.

Anway I am just a small fish in her pond. And the reason I want some input on this issue is as much for my own commercial knowledge moving forward.

Thanks again for the input so far, and please make a post if you have anything to add.

Cheers

FD&S

[casualbiker]

So you got a prime position rental on a short term rent BUT are paying cheaper long term rental prices and then when she pushes you for a longer contract you baulk at it. But go on about how much money she has (as if that's relevant)

She has made it clear she want's a long term tenant.. The tax is just her way of seeing if your serious, which it sounds like your not!

You have been there 6 months and your still not sure it's right for you? Really! will you EVER know?

[i claudius]

Are you geting screwed by your landlady? well to give you the answer to that we would all have to come around and watch.

[fatdrunkandstupid]

So you got a prime position rental on a short term rent BUT are paying cheaper long term rental prices and then when she pushes you for a longer contract you baulk at it. But go on about how much money she has (as if that's relevant)

She has made it clear she want's a long term tenant.. The tax is just her way of seeing if your serious, which it sounds like your not!

You have been there 6 months and your still not sure it's right for you? Really! will you EVER know?

The lack of conviction stems from the fact that my girl is currently invterviewing for positions with other companies outside of Phuket.

The prime position is irrelevant as I have converted the entire commercial space into a giant warehouse style house. We also have a massive commercial kitchen outback. I also rent the vacant block next door from her. So even though we live in the heart of old town, we have a massive living space, amazing kitchen and lots of offstreet parking for my cars and motorbikes. We also have a courtyard with a herb garden.

Sure the property is right for us...if we stay...But I just want to get to the bottom of this mysterious tax and why it has only just popped up for mention by her today.

[sirineou]

$140 a year $11 a month.....

I dont mean to be making light f the situation, but is this an amount making trouble over?

[Beetlejuice]

Had another look at the contract just then with my girl. There is a clause that when translated from Thai refers to Tenant paying any billboard tax and licence fees (eg a grog licence), but in this same clause there are the words "local tax".

So by the contract it would appear that I am liable for this local tax.

Anyone know whether this would be land tax?

according to your post, I guess you are running some sort of company in your Thai girlfriend`s name.

Who`s name is the premises rented under? Because unless you have some sort of registered company that includes you as a director of whatever sort of company this is, including the correct number of Thai directors as imposed by Thai law, plus your company is registered with the tax office and you have a work permit, than you are running this business illegally and have no official say in the matter regarding the premises owner and any disputes arising from the said property renting agreements.

So in actuality the woman is not your land lady, unless your name is on the rental agreement or lease.

Local tax could mean land tax or property tax and the only way to find out is to visit the local land office and make your inquiries with them, that is if you have no problems with that or with any officials looking into the matter on your behalf? Or if it is a case that you prefer to remain in the background than unfortunately no one can really answer your questions on here without fully knowing the full story regarding your situation.

[vtjforyou]

Never rent, only buy !

[vtjforyou]

If it's not in the contract, then it doesn't exist as far as you are concerned.

Looks like it is in the contract after all

It exists if the owner wants, that's all !

[Scottythai]

Just my opinion for 4500 she seems like a pretty good person to have on your side. She owns a lot and would have many good people in her pocket as friends, Your rent is not too high and it seems you are getting a good deal is it worth a potential rift between you and her for 4500?

[maccaroni man]

It is not uncommon on long term commercial rentals to be asked to pay the sign tax and or property tax. It's 4500 baht and you have a good deal, no need to make problems just pay and be happy

[chrisinth]

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Quote

Had another look at the contract just then with my girl. There is a clause that when translated from Thai refers to Tenant paying any billboard tax and licence fees (eg a grog licence), but in this same clause there are the words "local tax".

So by the contract it would appear that I am liable for this local tax.

Anyone know whether this would be land tax?

There is a possibility that what she is trying to say, especially if she mentions billboard and licence fees, that you are responsible for any extra fees if setting up a business, which is normal. That said, I am not sure what the 4,000 odd baht 'tax' would be for unless she would have to register that property (as owner) as a business?

If it is in a commercial area and you do not plan to start a business, it might be an idea to look for a town house. If however you are happy where you are, then 4,000 odd baht should be a small price to pay for a cordial relationship.

[Briggsy]

What is the name of this tax in Thai? Not English.

[fatdrunkandstupid]

Ok...the plot has thickened.

My girl spent all of last night on the internet. She is bright, with two degrees, but with no business experience, well no previous experience translating a commercial lease. I have lots of experience with commercial leases but my written Thai is hopeless.

Anyway, the issue comes down to just one word in the contract (local) tax. Unfortunately this word is also in the clause that refers to the orbortor taxes for billboards, garbage and licenses such as to sell cigarettes or alcohol. As I stated earlier in this thread, I heavily edited out all of the onerous clauses in the contract prior to signing. But I missed this "local" tax because of the poor translation by my girl, and the fact that it is embedded in clause that refers to other (council) taxes and fees that should of course be paid by the person trading from the property. Back home the local government takes care of licencing etc and so I thought this referred to a local council (orbortor) charge or tax such as garbage collection.

So there you have it, I have, with the (help) of my girl, strapped myself up to pay my landlords property tax.

But here is where the plot gets thicker...and even more disasterous for me.

The relevant tax rate here is 12.5 percent (I also had my girl check this on the internet). And the Land Lady has requested 4500 THB for the (annual) payment. So this means she is not declaring the full amount she is receiving to the tax man. In fact the amount she is declaring to the tax man is TWENTY times less than our actual rent.

So she has requested 4500 THB, BUT the correct amount owing to the taxman is 90,000 THB.

Ooops, really put my neck in the noose.

If the taxman comes a knocking she can just say she made a mistake (because she is old...and Thai Rak Thai...of course) and the tax man can come a knocking for me to pony up another 86,500 THB.

Well there you have it, now back over to the Thai Visa brains trust to give me some advice, or to tell me how stupid I am.

Thanks in advance for any constructive comments you have.

Cheers

FD&S

[wym]

From a practical POV just pay it.

However as you have negotiated an early termination, I would proceed in a timely fashion to go ahead and terminate when it suits you.

Present a re-worked lease that increases your rent by B500 - so she doesn't lose on the status quo.

But specifically defines exactly what taxes are payable by you, and specifically excluding the tax on her rental income.

So if she gets caught out on the under-declared rent, the onus for that is on her.

[fatdrunkandstupid]

From a practical POV just pay it.

However as you have negotiated an early termination, I would proceed in a timely fashion to go ahead and terminate when it suits you.

Present a re-worked lease that increases your rent by B500 - so she doesn't lose on the status quo.

But specifically defines exactly what taxes are payable by you, and specifically excluding the tax on her rental income.

So if she gets caught out on the under-declared rent, the onus for that is on her.

Yes my thoughts exactly.

And here is a little tidbit of information that is sure to raise a few eyebrows her on TV.

My girl went to discuss this matter further with the Landlady this morning to get final clarification. Unbeknownst to me she also took 4500 THB with her, and upon her return she gave me a receipt for payment of the tax.

My girl explained that she felt the mistake was her fault because of the poor translation she had given and her lack of knowledge about leases. So she paid the tax out of her own money.

I think I have a keeper...

[Datebayo]

Listen dude, the answer is simple, but you won't like it because you are this ''type of farang''. As other already stated, 4500 is not much to be cordial with the landlady. This is Thailand. Nonone declares 100% of taxes, nobody follows all the rules and regulations 100% all the time, this is Thailand. It is irrelevant to tell us that your girl is bright and has 2 degrees etc. And then on the next line you say you missed this local tax because of poor translation by your girl... oops you slipped... I still give you the benefit of doubt though... about your girl you keep mentioning with 2 degrees and high intellect... she has been all night looking for tax regulations? ... yeah... I can't imagine a Thai lady doing that...ROFL

The answer is simple, This is Thailand, just go with the flow. It is not the case that the landlady is making you loose face, she is actually being nice to let you stay, so that 4500 comes with it. You would even make her loose face if you would fight this with her... goodluck dude.

[wym]

Nothing is permanent but change, nothing certain but death and taxes.

And not really proof, but a positive sign anyway, certainly keep her for now 8-)

[fatdrunkandstupid]

Listen dude, the answer is simple, but you won't like it because you are this ''type of farang''. As other already stated, 4500 is not much to be cordial with the landlady. This is Thailand. Nonone declares 100% of taxes, nobody follows all the rules and regulations 100% all the time, this is Thailand. It is irrelevant to tell us that your girl is bright and has 2 degrees etc. And then on the next line you say you missed this local tax because of poor translation by your girl... oops you slipped... I still give you the benefit of doubt though... about your girl you keep mentioning with 2 degrees and high intellect... she has been all night looking for tax regulations? ... yeah... I can't imagine a Thai lady doing that...ROFL

The answer is simple, This is Thailand, just go with the flow. It is not the case that the landlady is making you loose face, she is actually being nice to let you stay, so that 4500 comes with it. You would even make her loose face if you would fight this with her... goodluck dude.

You lost me at dude...

[eyecatcher]

I rent a big old commercial property in the heart of phuket town.

I rent from an elderly Thai Chinese lady who owns all of the buildings in my street. She is easily a multimillionaire in US dollars, but that is another issue.

Because I am in the very heart of old town there are no other farangs around. So I was a bit, hesitant about the area and signing a long term lease. I also didn't know the land lady.

Any way I signed a 3 month lease and every thing went alright (with the exception of Thais parking in my space, but that is business as usual).

The old lady has been good, and we only pay the government rate for our water and the government rate for electricity. Monthly water is ridiculouly cheap...about 60 baht. And the electricity is also cheap....usually under 700THB.

Anyway, after the first 3 month lease we signed another 3 month lease (because were not sure if we had to move for my girl's job).

That 3 month lease has just come to an end and, this morning we signed a six month lease with the old lady. She pressed for a lease longer than 3 months (it is a commercial property a big double storey shophouse) and I agreed but on the provision I could include an early termination (without penalty) clause in the contract. She agreed and we signed the new contract this morning.

After signing, she then advised my (Thai) girlfriend that we also must pay an annual (Land Tax?) which is 4500THB.

She owns the property so why should I paying a government land tax?

Anyway if anyone else has some experience with this same issue please post your views and advice.

Thanks in advance.

Cheers

FD&S

you finally found it! Yes you are spot on with the tax fiddle.

My landlord does the same and I was advised to keep quiet about it because our rent is well below market rate.

I pay 9000bt a year, and I think my landlord is paying tax on around 9 or 10k rent receipts.

it may explain why I managed to negotiate another 3yr lease for the same rent as the last 3 in what is the highest rental area in the city.

Its not your problem, you pay the rent that is asked for....what you will never see or get is the statement for the building tax.

Its the landlord who is being fraudulent to the tax office, you only have contract with landlord and you do not file tax returns.

Its always interesting to know when the tax is due though...you could be paying for the same months as the previous tenant.

Best to pay monthly....she save enough by cheating she can afford 4500 in one go.