Land Law Clarification

[tornado40]

Its funny now ,how all this legal advice is just flowing out now! Why didnt lawyers tell anybody about the obvious pifalls of ltd cos. when first instructed. (barr the odd exeception). As I have said before watch developers and agents go to the wall (bust) and leave people high and dry. I forecast at least a 20% drop in home prices during the next 6 months. Who, in their right mind would sign over ownership to their Thai wife ,only to be thrown out shortly after! We all know of or heard of somebody who has been in this situation. All in my opinion

Pepi I agree with you completely. Having got the Ltd co. route and also a lease so pay tax - I have considered signing over to the TGF who lives in the house whilst I'm in UK! I purchased nearly 3 years ago when there were no sign of any problems.

Having given a lot of consideration to the comments on this forum and else where - my personal view is that as this seems to affect people who are registering land to companies ongoing - I'm going to sit tight and do nothing. Keep the audit accounts and tax paid as required.

I'm 46 - and my view was to retire with the TGF in a few years time - no intention of selling - just somewhere to live. It would be a great shame if other's in a similar position were 'kicked out'

[eddy-ham]

Hi,

Prehaps you can explain this little chapter from a developer who I was thinking of buying from.

Are you a natural or juristic person?

Under the Civil and Commercial Code of Thailand a juristic person enjoys the same rights and is subject the same duties as a natural person.

The Alien Business Operations Acts and Section 97 of the Land Code provide that alien person includes a juristic person with half of the shares constituting its capital held by alien. Therefore, a company has the same rights as a Thai Person.

Under Section 1144 of the Civil and Commercial Code, every limited company shall be managed by a director or directors under the control of the general meeting of shareholders and according to the by-law of the company.

Tax aspects

A company is liable to corporate tax only if it makes profit from the business in any fiscal year. A dormant company will not pay any tax but the returns and the balance sheet have to be filed as usual, once annually for the balance sheet and twice for tax returns.

There is no property tax on your property if you keep the property for your own use and not for commercial purposes.

Mortgage

Foreigners are entitled to acquire mortgages in their favour as collateral for financial support to Thais. There is no period limit on such mortgage. Again, the mortgage fee is 1% of the amount involved.

Now in plain English...........please

[Dragonman]

However there is a fine for not following Land Department rules!

No doubt. But we sure don't lose any sleep over anything coming of this.

Somewhat relatedly, I bet a lot of land was bought fraudently before the law was changed about being married to a foreigner -- many no doubt using their Thai maiden names to disguise their new foreign surnames (assuming they never changed their names on their Thai ID cards, which many didn't). But I would think this situation would never come to the attention of the Land Office, or ever be of any real concern to them, particularly with the subsequent law change.

But, out of curiosity, could the chanote remain indefinitely in the maiden name -- or does Thai law require it to eventually be changed to one's legal (married) name?

I am sure that the concealment of information frequently took place with no action from the Land Office prior to the Land Law Amendment. As normal in Thailand, little action takes place until someone complains( good example in recent enforcement of Company Property ownership). The problem is that if the law is not complied with any contract is void. Hence the property would be treated as if no purchase took place I would not want even the possibility of this happening to be considered by a Thai Judge.

The chanote would still be legal in maiden name if all laws were complied with at time of purchase!

A wife needs to place Mrs on the ID card, and the Tabien Baan needs amending, are the only legal requirements.

[pepi1]

I should think various Embassies are reading this web site with interest. It is only a matter of time when Thai Imm. Dept contact them via computer with names of people who cannot explain where initial funds came from to buy property or lend to Thai shareholders. Maybe this will help clean up Thailand. IMO

[Mobi]

I should think various Embassies are reading this web site with interest. It is only a matter of time when Thai Imm. Dept contact them via computer with names of people who cannot explain where initial funds came from to buy property or lend to Thai shareholders. Maybe this will help clean up Thailand. IMO

You've totally lost me - and the plot, I daresay.

What on earth have embassies and immigration got to do with this land crackdown? Are you seriously suggesting that immigration have a list of names of farangs who cannot explain where the money came from to buy their Thai houses and that they will pass on this information to the embassies?

A bit far fetched - even for this forum.

[Dragonman]

I should think various Embassies are reading this web site with interest. It is only a matter of time when Thai Imm. Dept contact them via computer with names of people who cannot explain where initial funds came from to buy property or lend to Thai shareholders. Maybe this will help clean up Thailand. IMO

You've totally lost me - and the plot, I daresay.

What on earth have embassies and immigration got to do with this land crackdown? Are you seriously suggesting that immigration have a list of names of farangs who cannot explain where the money came from to buy their Thai houses and that they will pass on this information to the embassies?

A bit far fetched - even for this forum.

I presume this comment is alluding to money laundering! Immigration and Embassies have only limited involvement. The Anti-Money Laundering Prevention & Suppression Office has received detailed information from banks(on transactions over 2 million baht) and the Land Offices ( on transactions over 5 million baht) since 2000. They may investigate anyone they wish.

[David H]

What I don't understand is, once the company owns the house why would you ever need to go back to Land and House again? In a sale it's just the company shares changing hands, the house remains owned by the same company?

hello I was wondering if someone has bought a condo,that is not finished,such as view talay6 on beachroad. I was told that i can own the condo in my name when it is complete and i make the final payment. How can i be sure right now before i make any more payments ? I do not want anyhting to do with a company.

[Schooner]

After my initial panic at the news article I've had a chance to mull this over and feel relieved that this will blow over.

My TGF reminds me that "this is Thailand" where prostitution is illegal and motorbike riders are required to wear helmets.

Apparently there have been other shake ups like this and life goes on. Houses are still selling and gaining 6% - 8% per year. I've decided to put my house on the market and buy a bigger one because there is just no way that this market is going to cool off for any length of time. This last scare did bring things to a standstill but here it is a few weeks and the market is already comming back. It would not do that anywhere else.

I have a friend who made a bundle investing. When I asked him how he did it he said simple, I do what the big guys do. The big guys are still investing in Pattaya big time.

I made a bundle in the real estate boom in the states in the 80's because I was inexperenced and just bought everything I could. I sat out this latest boom and made nothing because I analyzed it to death and never could make a move.

I'm putting my house on the market and buying a more expensive one in the same development. Quality will always sell and if the person who buys my place enjoys it half as much as I have than hw will be happy.

Of course there is risk in this market and all the rules of investing apply. If it scares you that much than pay rent or buy in a safer environment and watch your investment stay flat.

[Dragonman]

What I don't understand is, once the company owns the house why would you ever need to go back to Land and House again? In a sale it's just the company shares changing hands, the house remains owned by the same company?

hello I was wondering if someone has bought a condo,that is not finished,such as view talay6 on beachroad. I was told that i can own the condo in my name when it is complete and i make the final payment. How can i be sure right now before i make any more payments ? I do not want anyhting to do with a company.

Just ask to see a draft contract. If it doesn't mention anything about 49% foreign ownership, beware! Anything you are told in Thailand doesn't count. It must be in writing.

[malcolminthemiddle]

What I don't understand is, once the company owns the house why would you ever need to go back to Land and House again? In a sale it's just the company shares changing hands, the house remains owned by the same company?

When the buyer is a Thai or any other juristic entity that doesn't want and/or has no need for a company.

[Pakboong]

In 1975 the Americans were asked to leave Thailand largely because they were upsetting the socio-economic structure. Thais wanted status quo and were willing to pass on the billions to be spent. This is an important aspect to all of this and may be the only true constant.

[Dragonman]

In 1975 the Americans were asked to leave Thailand largely because they were upsetting the socio-economic structure. Thais wanted status quo and were willing to pass on the billions to be spent. This is an important aspect to all of this and may be the only true constant.

Sorry you've lost me! Who asked them there Yanks to leave? Why has Thailand kept giving preferential treatment to Americans under Amity if they were desperate for them to leave? Allowing all those American professionals must upset the socio-economic structure. Did you know that whilst only 5% of the world's population are American, 65% of the world's lawyers are American.

[Deadcert]

After my initial panic at the news article I've had a chance to mull this over and feel relieved that this will blow over.

My TGF reminds me that "this is Thailand" where prostitution is illegal and motorbike riders are required to wear helmets.

Apparently there have been other shake ups like this and life goes on. Houses are still selling and gaining 6% - 8% per year. I've decided to put my house on the market and buy a bigger one because there is just no way that this market is going to cool off for any length of time. This last scare did bring things to a standstill but here it is a few weeks and the market is already comming back. It would not do that anywhere else.

I have a friend who made a bundle investing. When I asked him how he did it he said simple, I do what the big guys do. The big guys are still investing in Pattaya big time.

I made a bundle in the real estate boom in the states in the 80's because I was inexperenced and just bought everything I could. I sat out this latest boom and made nothing because I analyzed it to death and never could make a move.

I'm putting my house on the market and buying a more expensive one in the same development. Quality will always sell and if the person who buys my place enjoys it half as much as I have than hw will be happy.

Of course there is risk in this market and all the rules of investing apply. If it scares you that much than pay rent or buy in a safer environment and watch your investment stay flat.

I take it that your friend isn't Thai and it is just these sort of people that this "crack down" is targeting. Although I believe this will pass for now, it is foriegners trying to make big money in Thailand that will bring this crashing around all our heads. This all came about because someone complained about the development in Hua Hin by foriegners.

There will be new chapters in this saga !

[Deadcert]

I should think various Embassies are reading this web site with interest. It is only a matter of time when Thai Imm. Dept contact them via computer with names of people who cannot explain where initial funds came from to buy property or lend to Thai shareholders. Maybe this will help clean up Thailand. IMO

watching to many X files no doubt

[Pakboong]

I should think various Embassies are reading this web site with interest. It is only a matter of time when Thai Imm. Dept contact them via computer with names of people who cannot explain where initial funds came from to buy property or lend to Thai shareholders. Maybe this will help clean up Thailand. IMO

You've totally lost me - and the plot, I daresay.

What on earth have embassies and immigration got to do with this land crackdown? Are you seriously suggesting that immigration have a list of names of farangs who cannot explain where the money came from to buy their Thai houses and that they will pass on this information to the embassies?

A bit far fetched - even for this forum.

During the renewal of my retirement visa yesterday, I was asked if I owned the home in which I am living. Never been asked that before.

[niggle]

I should think various Embassies are reading this web site with interest. It is only a matter of time when Thai Imm. Dept contact them via computer with names of people who cannot explain where initial funds came from to buy property or lend to Thai shareholders. Maybe this will help clean up Thailand. IMO

You've totally lost me - and the plot, I daresay.

What on earth have embassies and immigration got to do with this land crackdown? Are you seriously suggesting that immigration have a list of names of farangs who cannot explain where the money came from to buy their Thai houses and that they will pass on this information to the embassies?

A bit far fetched - even for this forum.

During the renewal of my retirement visa yesterday, I was asked if I owned the home in which I am living. Never been asked that before.

[niggle]

I should think various Embassies are reading this web site with interest. It is only a matter of time when Thai Imm. Dept contact them via computer with names of people who cannot explain where initial funds came from to buy property or lend to Thai shareholders. Maybe this will help clean up Thailand. IMO

You've totally lost me - and the plot, I daresay.

What on earth have embassies and immigration got to do with this land crackdown? Are you seriously suggesting that immigration have a list of names of farangs who cannot explain where the money came from to buy their Thai houses and that they will pass on this information to the embassies?

A bit far fetched - even for this forum.

During the renewal of my retirement visa yesterday, I was asked if I owned the home in which I am living. Never been asked that before.

[niggle]

And what happened then ?

[Pakboong]

And what happened then ?

Rent!!

[pepi1]

AS I have mentioned in a previous post,a similar thing happened in Mallorca Spain about 6 years ago. Spainish Gov. let the Germans buy, buy buy. Many with Ltd offshore Cos. Germans built very nice houses and I mean nice! Then, they pounced. A lot of the injected money was found to be BLACK. Check facts for yourself, Mass exodus of Germans. Properties sold quickly before caught. Guess who picked up many properties -yes- the Spainish. Thailand is al aw unto its self. Everybody knows deep down they were skiming the edge when trying to work around the Thai law. Sorry to be a doom and gloom guy but the writing is on the wall. If these Thai girls were ugly we would not have this problem! You know what I mean guys.

[number6]

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

[sleepyjohn]

Did you know that whilst only 5% of the world's population are American, 65% of the world's lawyers are American.

Dragonman you're a never ending source of amazement to me.

I just got a pencil out and I reckon from what you say it means that there are 35.2 times as many lawyers per soul in the US.

I wonder if they realise how much this must add to their household budgets in terms of....well everything. Selective execution would seem appropriate.

[Colonel_Mustard]

These new regulations don't seem to have had any effect in Phuket and companies are still being formed and are buying land without muc/any hassle from the land offices.

I was chatting to one of the better lawyers on the island and he pretty much said that if you set up the company properly it shouldn't be a problem. Exactly what he meant by properly I'm not sure.

Personally I think it's the government posturing and it will all blow over soon (probably once the government realize how much money they stand to lose if people stop buying).

[Gary A]

Lawyers are the reason medical care is WAY overpriced in the USA. They will sue doctors and drug companies for huge amounts of money. They have seriously crippled manufacturers and have made the insurance companies very wealthy. The worst part is when a lawyer is not smart enough to steal enough to get wealthy the others make him a judge or a politician. The smarter crooked lawyers are then able to manipulate the judges and politicians.

Yes, I think a national bounty on scumbag lawyers would be a great thing.

Did you know that whilst only 5% of the world's population are American, 65% of the world's lawyers are American.

Dragonman you're a never ending source of amazement to me.

I just got a pencil out and I reckon from what you say it means that there are 35.2 times as many lawyers per soul in the US.

I wonder if they realise how much this must add to their household budgets in terms of....well everything. Selective execution would seem appropriate.

[Dragonman]

Lawyers are the reason medical care is WAY overpriced in the USA. They will sue doctors and drug companies for huge amounts of money. They have seriously crippled manufacturers and have made the insurance companies very wealthy. The worst part is when a lawyer is not smart enough to steal enough to get wealthy the others make him a judge or a politician. The smarter crooked lawyers are then able to manipulate the judges and politicians.

Yes, I think a national bounty on scumbag lawyers would be a great thing.

Did you know that whilst only 5% of the world's population are American, 65% of the world's lawyers are American.

Dragonman you're a never ending source of amazement to me.

I just got a pencil out and I reckon from what you say it means that there are 35.2 times as many lawyers per soul in the US.

I wonder if they realise how much this must add to their household budgets in terms of....well everything. Selective execution would seem appropriate.

And now the "sue" society has reached Thailand with the Medical association of Thailand reporting dramatic increases in litigation in recent years.

More facts: Average salary for Partner in American Law Firm---$650,000 per annum

1st year Associate ---------------$110,000 per annum

My salary----- 50,000 baht per annum allowance from wife.

[sleepyjohn]

More facts: Average salary for Partner in American Law Firm---$650,000 per annum

1st year Associate ---------------$110,000 per annum

My salary----- 50,000 baht per annum allowance from wife.

[billaaa777]

You have problems. The law has changed, more than likely since you have been here. Read the thread below to get a good idea of the new enforcement of the law. Before I signed any thing or gave them one more cent I would come back to Thailand and see a real good lawyer who specialize in property law.

http://www.thaivisa.com/forum/index.php?showtopic=71212

[Ralph56]

why are we as foreigners...settling for 49% anyway...my wife can buy in the united states...100%..of land and house...stop buying in thailand until we can own 100%...just like thais can in the countries were from..i will not invest another dime here..until i can go to the land office myself..and deed the property in my own name...100%..i bought land and built a house here...now that i live here...my brother-in law does not want to register the land and house in my name...never,never again will i go through this....until they change the law...and sign an agreement with each foreign government first....we as foreigners need to have property rights the same as thais do in our countries...there are other countries that would love our foreign money..

I hope you're not suggesting that it is all on a level playing field for foreigners and American citizens to acquire land in The United States. There are a number of Federal and State Laws, particularly the Foreign Investment in Real Property Tax Act 1980 that make this not the case. Although of course there is no outright ban such as in Thailand.

Hi Dragonman:

I respect all of your activity on the boards and good advice. However, I respectfully disagree with you on this one. I think your use of the Foreign Investment in Real Property Tax Act (FIRPT) is misleading and inaccurate.

FIRPT was not intended to be a restriction on the transfer of real property by foreigners. Rather, FIRPT was intended to prevent foreigners from selling real property at a capital gain and then repatriating the money to their countries of origin without paying tax. In essence, it is a tax avoidance law rather than a law restricting the transfer of land by foreigners. The same thing happens if you hold securities, bonds, or other financial instruments at a brokerage and do not have a social security number (or the brokerage house does not have yours on file.) The brokerage house is required to withhold a certain percentage of any securities sold in your account.

In fact, it would probably be unconstitutional for any state or the federal government to pass such a law (restricting the transfer of land by foreigners) under the Due Process and Equal Protection clauses of the US Constitution. If there are other such laws or restrictions as you claim, please name them.

Edited September 18, 2006 by Ralph56

[Ralph56]

In fact, the Fair Housing Act (a federal law) states, in pertinent part (all emphasis added),

Sec. 804. [42 U.S.C. 3604] Discrimination in sale or rental of housing and other prohibited practices

As made applicable by section 803 of this title and except as exempted by sections 803( and 807 of this title, it shall be unlawful--

(a) To refuse to sell or rent after the making of a bona fide offer, or to refuse to negotiate for the sale or rental of, or otherwise make unavailable or deny, a dwelling to any person because of race, color, religion, sex, familial status, or national origin.

( To discriminate against any person in the terms, conditions, or privileges of sale or rental of a dwelling, or in the provision of services or facilities in connection therewith, because of race, color, religion, sex, familial status, or national origin.

© To make, print, or publish, or cause to be made, printed, or published any notice, statement, or advertisement, with respect to the sale or rental of a dwelling that indicates any preference, limitation, or discrimination based on race, color, religion, sex, handicap, familial status, or national origin, or an intention to make any such preference, limitation, or discrimination.

(d) To represent to any person because of race, color, religion, sex, handicap, familial status, or national origin that any dwelling is not available for inspection, sale, or rental when such dwelling is in fact so available.

(e) For profit, to induce or attempt to induce any person to sell or rent any dwelling by representations regarding the entry or prospective entry into the neighborhood of a person or persons of a particular race, color, religion, sex, handicap, familial status, or national origin.

[homehunter]

It is all very well forming a Ltd Co.at the start, everything appears great. THai shareholders with no powers, only the foreigner as director has the control. Sounds great does it not. Well,in opinion this as I have said before is a SHAM. Thai lawyers should go on to explain that if investigated theThai gov. will IMO close that Co and seize assets i. e house. I have seen this done in Mallorca Spain 6 years ago. THe Germans Nearly took over the Island with all sorts of Cos formations. Spainish and German govs. pounced and many people lost assets and homes. Some traced back to discover dodgy money brought in to buy. Mass exodos of Germams took place. Finally, IMO, when a Ltd Co. is sold the assets are divided between the shareholders, who ,are the Thai shareholders you broght in at the start!!! OUCH I think I know who has got it right.

The Thai shareholders are only entitled to share in the listed capitalisation of the company which in most cases is 1 million baht total providing they have first paid up there share of capital. The additional funding required to build a home or improve land is usually a loan from the foreign shareholder to the company, at a recorded rate of interest to the company of course. These loans need to be officially recorded in the minutes of the company at the meeting of the shareholders and a loan agreement signed on behalf of the company by the elected director. This is my understanding please correct me if I'm wrong.