Land Crackdown Targets Thai Shareholders

[BlackJack]

if you have a legit company and the financial proof that the company was set up correctly then you can buy and own land

its the punters with the worthless paper companies that cant buy anymore

the pms family has also been buying up land around the new airport

just like monopoly

oh you just landed on my property and so you need to pay taxes and rent of xxx

[Levent]

If all the worries are about foreigners buying up property to resell again, why can't the land office follow up on purchases by checking whether the house is indeed being used to live in? It's not hard to do and this way the honest people investing their life savings in a home to live in permanently won't have to suffer.

Edited June 19, 2006 by Levent

[Heng]

...but I really don't understand the second story. What's going on in these two islands? I thought all land transactions were grinding to halt as far as foreigners were concerned. Maybe someone can explain.

Simple, you're assuming the only people buying and selling real estate are either foreigners or foreigners using front companies to buy and sell real estate. That leaves out (in your assumption) locals and foreigners who buy and sell real estate through their local spouses, friends, or relatives.

[Thaible]

Sop our beloved PM's sister is planning to sell expensive houses to foreigners. Very interesting.

This will stop as soon as the election campaigning begins.

One of the biggest complaints against Thaksin is selling out to foreigners. While selling a company is one thing, selling Thailand's very own land takes it to a whole new level.

You can bet that the opposition parties will pound this home this everyday. And Thaksin, while only having so much control over his sister, can still change the laws to prevent his sister from selling out and making him look bad.

[Steph1012]

Sop our beloved PM's sister is planning to sell expensive houses to foreigners. Very interesting.

This will stop as soon as the election campaigning begins.

One of the biggest complaints against Thaksin is selling out to foreigners. While selling a company is one thing, selling Thailand's very own land takes it to a whole new level.

You can bet that the opposition parties will pound this home this everyday. And Thaksin, while only having so much control over his sister, can still change the laws to prevent his sister from selling out and making him look bad.

What is going to stop? Is she going to put the company on hold, sell it off, give it to the poor? Will she stop accepting payments, lay off all the architects, salesmen, office staff, publicity agents, site staff, formen, drivers, designers, suppliers, accountants, lawyers etc? All of whom we must assume are Thai Nationals and who surely are benefitting directly from foreign investment. Its one thing to talk and knock foreigners to gain votes and its quite another to turn away the hard money.

The point here is just how engrained the greed amongst the ruling elite is in Thailand. The absolute brass neck of them to even discuss it, let alone brag and promote it in the National Press. In the midst of all this, you would expect total silence on this front.

I do agree that foreign companies should not be able to come in and trade real estate. However, this selling land to foreigners is a red herring and only useful for garnering a few votes here and there. The land, espescially in Phuket would remain under cultivation earning only a small amount of money for the economy as opposed to the billions that are pouring in to the country with the high healed residents arriving here. ALL this money ends up in Thai pockets!

A recent comment about un-productive retirees also missed a point. A small pension payable for life from the west would be in the order or 30,000 baht per month. 70,000 Baht per month is not at all unusual and I am sure it is most useful to the local Thai economy. There are after all thousands of Thai sole traders and small business men setting up here. Ask them if they want the falangs to go home and I am sure that as in the west, they will vote with their wallets, not their conscience!

[number6]

hi all i posted this in land property but now also here because i want to see (as newcomer) how it works - anyway its relevent

I think a lot of the problems people have here is that they want to believe it works same here as in west – it does not – I have been in property investment in UK for over 30 years and of course have done very well out of it there – when I first came to Thailand (15+ years ago) I though it would be much the same here – so my first plan was to buy quite a lot of property and live on rents etc – luckily or because I researched reasonably well I soon realized that it was completely different here – first they don’t really have a rental market except for parts of Bangkok – second standards of build, maintenance and care are in a lot of cases by western standards appaling. Third few Thais look after their property – just look around at perfectly good buildings that even in good areas look like shxxxxx.

So lots of forangs looked at incredibly low prices here and thought wow and the whole thing exploded in popular tourist and forang areas – I have 2 houses (sorry my Thai wife has them and she’s welcome to lock the door but I don’t think will) and had 2 condos (all legally in my name as allowed) – I don’t regret these purchases after all they cost in total a small fraction of my previous house in UK. 1 condo we have now put in our childs name and since its in a high sought after area in a well managed block in central BKK I am 100% sure will appreciate a lot over the years. The other Condo is our BKK home and again I am 100% sure being in a central well maintained block will appreciate a lot. 1 House in Ciang Mai but local house (not overpriced foreigner estate) will probably depreciate but maybe not after all being older it was a bargain at 1.5 million bath (4 beds 2 bath 100 sq wa lovely place in hills) – point is its our sort of second home and cost less than a car so what can we loose really – second house – ok new 3 bed 2 bathroom for 1 million bath has a shop that my thai wife’s mum runs – it is on a thai only estate – will probably look a dump in 10 years but maybe not – I notice the new middle class Thais seem to be starting to look after their places better. My main property investment is still in west where I get a decent return and know long term it will also appreciate (ive ridden through 2 property crashes and by sitting tight won in end). Im still tempted to buy more here but when I feel urge I just drive around new estates and complexes and note how many are for rent for ages and how many owners are quite keen (almost desperate to sell) – that usually cures me and if not my lovely Thai wife always brings me back to reality with words “you always told me forget Thailand for property except central BKK etc).

So whats my advice – keep to law – don’t try fancy tricks like company purchase – remember this is not the west - property here often devalues not appreciates ( except as always prime location prime best quality build) – if you want to invest do it in best BKK locations not cheaper places and u have a chance – if its to live in buy second hand much cheaper (not like west Thais don’t like older buildings) – don’t get carried away by supposedly cheap deals theirs a good reason why by western standards their cheap.

AND LIKE EVERYONE SAYS DON’T PUT MORE INTO HERE THAS YOU CAN AFFORD TO LOOSE THEN YOU WONT WORRY – HERE ITS STILL A GAMBLE _ YOU CAN WIN BIG AND LOOSE BIG

AND FINALLY BE CAREFUL OF WHAT ADVICE YOU GET HERE A LOT OF IT IS CRxxxxxxxxx CHECK FACTS YOURSELF CAREFULLY BUYER BEWARE

[Martin]

When I first came to Thailand, an 'old hand' who had been here 30 years told me that there were two rules that I would be wise to obey:

Rule 1. Don't think you can make any money here, unless it is by doing something that Thais can't do.

Rule 2. Never invest a baht more than you can cheerfully walk away from.

By both of these rules, it would be wise to keep out of property speculation.

[Arkady]

Replies to some comments in posts above.

1. Thaksin's sister, Kanana's, development in Phuket Town doesn't seem targeted at foreigners as nearly all want to live on the coast. On the other hand it is not clear which local Thais want to buy 18 million baht houses in town but it is a small development and probably done because of getting a piece of land cheap in a sweet deal.

2. It's not so relevant for the Land Dept to inspect houses owned by farang controlled companies to see if they are just being lived in rather than being held for speculation. It's more relevant to check whether the company is using it for business purposes i.e. as an office or renting it out. the latter can be cross checked with the Revenue Dept and Commerce Ministry.

3. The new floor area ratio FAR regulations should enhance further quality designed and built freehold condos in central Bkk and land prices there. Beyond Sukhumvit Soi 71 it will require a very large plot of land to build a high rise. But beyond the initial flip up in the recent mini condo bull market from 2003 to 2005 it will probably still only be the real quality buildings in prime locations that appreciate. Thais like something new and all believe in ghosts etc. I have seen several people in difficulties trying to sell what seem quite nice condos in low numbered Sukhumvit sois. Bear in mind the mentality of valuing houses based on the land value only as buyers immediately knock down houses under 20 years old that look perfectly OK from the outside.

[BlackJack]

the 49% rules for condo owners is ok to work within as foreigners dont mind a second hand property as they can get it cheap, renovate it and either live in it or sell it for a profit

In my building i am happy as the foreigners are happily renovating and generally improving the quality of the complex. So its value is going up

[david350uk]

End of the Farang Ghettos: ?

From The Pattaya Mail

One of the hot topics discussed at the monthly Pattaya Business and Tourism Association meeting was the recent enforcement of land ownership laws. The changes in company ownership rules, specifically with foreign, nominally minority, shareholders has led to housing project developers allegedly losing billions.

Sanga Kijsamrej, PBTA vice president and head of the property developers club in Pattaya said: Many housing project owners are facing serious financial problems over changes concerning foreigners holding shares in a Thai company and owning property.

Sanga said that as a result of the enforcement of the laws government and land department officials in the area are very reluctant to issue title deeds as a result of the Ministry of Interior’s directive: This has already affected around 70 housing projects in Pattaya who are unable to transfer ownership to companies with 49% foreign and 51% Thai holdings as was done in the past.This is causing losses of billions of baht for project owners. We will see a number of these projects fold in the future.

A letter has been sent to the Ministry of Interior to request an expert on the issue to clarify the law in question, specifically concerning those foreigners with Thai spouses who wish to buy a home, as to the true legal standing on the issue.

A meeting with land department and tax officials, local, provincial and national parliamentary members is scheduled. The aim is to clarify the current MOI laws and directives and have ministerial officials explain the real situation.

[Arkady]

A letter has been sent to the Ministry of Interior to request an expert on the issue to clarify the law in question, specifically concerning those foreigners with Thai spouses who wish to buy a home, as to the true legal standing on the issue.

They should know that the 1999 amendments to the Land Code were originally going to allow foreigners with Thai spouses to own land but this provision got chucked out by Parliament.

Maybe not an end to the farang ghettos but a beginning to them i.e. a few hardy farangs sticking it out in unfinished developments with no services or security trying to fight back the jungle and marauding thieves.

[BlackJack]

A letter has been sent to the Ministry of Interior to request an expert on the issue to clarify the law in question, specifically concerning those foreigners with Thai spouses who wish to buy a home, as to the true legal standing on the issue.

They should know that the 1999 amendments to the Land Code were originally going to allow foreigners with Thai spouses to own land but this provision got chucked out by Parliament.

Maybe not an end to the farang ghettos but a beginning to them i.e. a few hardy farangs sticking it out in unfinished developments with no services or security trying to fight back the jungle and marauding thieves.

at least the street dogs will have somewhere nice to live