Phuket Land Transfers Drop Dramatically

[george]

Land transfers drop dramatically

PHUKET: -- Phuket Provincial Land Office (PPLO) has reported a significant drop in land transfers since the announcement on 27 June that companies with foreign shareholdings seeking to transfer land will be thoroughly investigated. According to PPLO chief, Supot Suwannachote, land transfers applied and approved by PPLO over recent months are: 20 companies in March; 17 companies in April; 24 companies in May; 17 companies in June; and just five companies in July – of which all five have 100% Thai shareholders.

K Supot explained that investigations had been stepped up since the the well-publicised Bandidos case in Samui. According to press reports, the Bandidos were a gang whose three members were charged in July with extortion, money laundering and six counts of illegal sale of public land. A police spokesman was quoted in a Thai newspaper as claiming the suspects brought more than 79 million baht into Thailand over the past two years and laundered it through various tourist-related businesses. A six-month investigation by police found that the Bandidos had a network that extended to Bangkok, Pattaya, Samui and Phuket.

The PPLO issued an official letter dated 27 June to inform local companies with foreign shareholders of its stricter adherence to existing land law. “We are checking for any suspicious cases in which companies have increased their capital shares or are changing managing committees to hold company shares for foreigners,” explained K Supot, “and are conducting business concerning properties in Thailand, such as buying, leasing, operating a hotel or building a resort.”

“Companies only have to present the evidence to prove that Thai shareholders are doing the land transfer and not a foreigner,” K Supot said. “If a Thai shareholder receives a loan to do the land transfer, evidence must be presented to officers. This should not be difficult for those who are legally transferring land.”

-- Phuket Post 2006-08-30

[womble]

interesting, I havn't heard of a single land sale in samui in the last four weeks eigher, does anyone know of any land transactions involving foriegn owned companys in the last month anywhere in Thailand?

[Bush]

Yes, I do. We bought 3 rais and house for our personal residence. Location Bangkok.

Bush

Edited August 30, 2006 by Bush

[Laulen]

Yes, I do. We bought 3 rais and house for our personal residence. Location Bangkok.

Bush

When you say 'we' do you mean your Thai partner and you? If so, is it not true that Thai Land Laws allow your Thai partner to purchase land, but not you?

Land ownership I seem to recall is an emotive issue with most Thais.

Laulen

[Bush]

Yes, I do. We bought 3 rais and house for our personal residence. Location Bangkok.

Bush

When you say 'we' do you mean your Thai partner and you? If so, is it not true that Thai Land Laws allow your Thai partner to purchase land, but not you?

Land ownership I seem to recall is an emotive issue with most Thais.

Laulen

Please check the law. There are several exemptions.

Bush

[geoffphuket]

Yes, I do. We bought 3 rais and house for our personal residence. Location Bangkok.

Bush

So you've bought this as a holding of a registered company in Thailand?...which is what this thread is all about

[F1 Visa Runner]

Land transfers drop dramatically

A police spokesman was quoted in a Thai newspaper as claiming the suspects brought more than 79 million baht into Thailand over the past two years and laundered it through various tourist-related businesses. A six-month investigation by police found that the Bandidos had a network that extended to Bangkok, Pattaya, Samui and Phuket.

The correct would be 79 million US, 450 million DKK or 3 billion THB.

Edited August 30, 2006 by F1 Visa Runner

[george]

Several off topic posts re how bad it is in Thailand, and alternative countries moved to a new topic in the General section here..

Topic now is: " Phuket Land Transfers Drop Dramatically"

Please keep on topic, thanks!

/Admin

[VanZam]

Yes, I do. We bought 3 rais and house for our personal residence. Location Bangkok.

Bush

When you say 'we' do you mean your Thai partner and you? If so, is it not true that Thai Land Laws allow your Thai partner to purchase land, but not you?

Land ownership I seem to recall is an emotive issue with most Thais.

Laulen

Please check the law. There are several exemptions.

Bush

Bit vague, care to explain how you purchased land in Bkk? What laws exempt you?

EDIT- Sorry.. little off topic, just trying to find out if he used the company purchase approach, as it seems to be near impossible these days.

Edited August 30, 2006 by VanZam

[geoffphuket]

Yes, I do. We bought 3 rais and house for our personal residence. Location Bangkok.

Bush

When you say 'we' do you mean your Thai partner and you? If so, is it not true that Thai Land Laws allow your Thai partner to purchase land, but not you?

Land ownership I seem to recall is an emotive issue with most Thais.

Laulen

Please check the law. There are several exemptions.

Bush

Bit vague, care to explain how you purchased land in Bkk? What laws exempt you?

EDIT- Sorry.. little off topic, just trying to find out if he used the company purchase approach, as it seems to be near impossible these days.

Thats what I asked - but have received no reply. Exactly on topic

[LaoPo]

Land transfers drop dramatically

-- Phuket Post 2006-08-30

Hmmmm, if this continues it's bad news for a lot of developers/agents/suppliers but even more for thousands and thousands of workers in the real estate-/contruction- and related fields and beyond that.

If this is Nation-wide it is dramatic for all those workers and so many more.

Better it is though if there, finally, would be some intelligent lawmakers in the capital to set up new laws, especially also environmental laws to protect the 'green' country to stop the 'greedy' developers.

But, with the elections coming up............an Utopia

If the trains, busses and trucks are leaving the island FULL of workers without a job...maybe....just maybe a bell starts ringing in Bangkok.

LaoPo

[VanZam]

The answer he gave to the question "Please check the law, there are several exemptions" sounds like he has no clue what he's talking about.

I suspect there probably was no 3 rai in bkk to begin with.

With regard to Phuket, are there still ways to transfer/purchase land without using the company approach or putting it in a Thai name?

Is the purchase of land by farang in LOS now non-existant?

Edited August 30, 2006 by VanZam

[LaoPo]

The answer he gave to the question "Please check the law, there are several exemptions" sounds like he has no clue what he's talking about.

I suspect there probably was no 3 rai in bkk to begin with.

With regard to Phuket, are there still ways to transfer/purchase land without using the company approach or putting it in a Thai name?

Is the purchase of land by farang in LOS now non-existant?

Was it ever?

LaoPo

[VanZam]

Is the purchase of land by farang in LOS now non-existant?

Was it ever?

LaoPo

Well, with regard to any legal ways around the law that leave you in control and protected.

[LaoPo]

Is the purchase of land by farang in LOS now non-existant?

Was it ever?

LaoPo

Well, with regard to any legal ways around the law that leave you in control and protected.

I don't think so...but maybe there's someone* who has 'any legal ways around the law'....? not me!

* that someone could become rich...very rich indeed

LaoPo

[Chua]

Absolute number figures on land transfer title, even relative to the previous month are almost meaningless unless you also consider the # of farrang in Thailand for any given month. Remember July is pretty much low season, so of course there's going to be less business involving farrangs. It happens EVERY year.

The land office on Samui had been closed for a few weeks while the DSI boys went through, but's its been open again now for over two weeks. They claimed they were checking every title issued here in the last five years. BS. They left after several weeks with no new arrests, no new pronouncements, not even any new "claims" other than that they were going to "expand" their search. Ie, they came up empty handed, so now they have to justify their jobs by hunting elsewhere. Their claims had been wildly exaggerated all along in a conspiracy with the Thai media to justify the DSI's own existence and simultaneously scare away farrang buyers. So far, despite all the hubbub, land deals there are now continuing again, and the situation has already returned to normal. But it's still only mid season now, dropping down again as the rainy period comes up, so there's never a lot of activity this time of year.

Other than the "Peak" project, whose land titles were cleared within days, the only other published report is about supposed encroachment onto forest preserve land, which represents less than 1/10th of the land area of Samui. All media hype is STILL portraying the issue of Bandidos drugs, money-laundering, and their land grabs as a Thailand wide problem, when, in fact, it isn't. Sure these guys did some bad things, but all the while their business deals pumped a lot of money into the hands of local Thai land owners, architects, construction workers, etc. Not defending their crimes, just the fact that as far as the land deals go, nobody got hurt, they all benefited.

The supposed "encroachment" into forest areas is a very limited, unrelated problem. The problem is that the Thai government "protected forest" areas is just not as big as they thought (hoped). It's only been mandated as a relatively small, isolated area, in the interior of the island, closest to the native port city of Nathon. The problem these DSI guys are finding though (I have it from an inside source) is that all roads lead back to TRT politicians who are still in power. They've made sure the process was smooth as silk. Even the Bangkok Post quoted a senior official who said essentially, even if we find what appears to be a 'dodgy' title, there's virtually no way to prove it is fake. This is because, if land office officials in Bangkok & Samui & Surrathani all signed off on it, and all the records are in the files, it's absolutely no different from any other 'real' land title.

I've not read or even heard of any new arrests, no new charges, and no other land owners affected. And only ONE Thai land official was named, and all that happened to him was a transfer. It's all been a bunch of media hype designed to scare farrang away from buying up the land, so that the local Thais can get in on the deals while the prices are still affordable. Remember, before the bandidos thing came out, the "Peak" 'scandal' really all started because of complaints by local Samui residents who didn't like the fact that some of their local Thai friends were getting rich selling their land to 49% foreign controlled companies who were then building ugly white, flat roofed buildings on *their* island. The Thais are very nationalistic (read: racist) and only want Farrang money, not farrang controlled land, and certainly not farrang houses. That's what this was really all about. But money talks louder than a bunch of whining Thais, so now that they've changed the zoning laws to restrict buildings to Thai style roofs & colors, and shuffled a few heads around at the land office, things there are back to business as usual. After all, high season is coming in just a few months, and the land office officials & real estate moguls here wouldn't dare miss it.

[VTR1000]

Good news in my eyes ..... why should a country like this have so many (rich?) foreigners coming in and buying (cheap?) land that most locals can only dream about owning???

Where I used to live in London, the local area got literally taken over by Japanese and Middle Eastern landlords. What happened ... ? As prices soared, property prices and rents went through the roof and the locals (their kids especially), those who had lived in the area all their lives couldn't afford to live there anymore and were forced to move on to less desirable areas. The same is happening here for sure. Big foreign bucks are moving in ... land prices to a certain extent go up pricing poor Somchai and his family out ... not good! Just MHO.

With the state of the laws here and the volatile situation of SE Asia, I still can't understand how (foreign) people can invest millions of Baht here that could be totally wiped away by a simple change of Government. Beggars belief.

[engism]

Dear Chua,

Everyone in the Phuket property market is just waiting and wondering what will be, there is optimistic talk but at the same time realisation that the bubble has burst, The only people still going ahead are those already in too far to walk away, The feeling is widespread of a giant pyramid scheme collapsing. I could go on but want to keep within the subject matter however I am watching closely the market and find almost everyone I speak to who had previously planned to invest in Thailand for retirement already looking at options in other countries.

You have seen it written so often about Thailand....only invest what you are happy to loose, follow that and you will always be happy in the land of smiles.

Good Luck to all.

[ArtfulD]

I was in Phuket at start of the year for 2 months looking at property...this one we looked at was going for something like 10.5 Million baht...anyways, we left came back home but I stayed in touch with the estate agent..

Last week I got an email from her saying that a hot deal was available on the project...

"

Please be informed that yesterday the developer called me and told me that

Plot No. 5 which was originally bought by her friend is for sale now.

The developer's friend thought that she would like to buy it for investment

but later she has financial problem so she has to release it urgently.

So the price is very cheap now. The house is almost completed and you can

move in soon.

The original price is 7,200,000 THB. She wants to sell for 6,000,000 THB

(84,550 GBP) now. (please see the attached price list and size of the plot)"

[Pattayasam]

I live in Pattaya......but on topic

Live in SPvillage (rent) and I am suddenly flavor of the month at being shown houses of people looking to sell and I have seen people cut B500k off the price if I dont seem interested. Down the road SP village5 is under construction and it has, I think, 150+ plots of land. To date 15, again I hear but not 100% sure, have been sold.

Talk to people I know involved in development hear and its no problem....all normal again. I had one company genius contacted me to set up a second Thai company as "if its done by August 15th it will be exempt and OK to register land" what crap! Drive down past many developments here daily and I dont see this changing ....Thais here being priced from their land so if its not enforced 100% now, it will be at some point.

I am guessing the way around this will be register land to company and then change company shareholding after land registered so look for land to come already with company title to be transferred. That may work....for a while. Problem would come buying property and company from someone else and what liabilities are attached to the company and will that still be an option later on or that changed when its time to sell.

Rents here are high and people will still want to buy and I see them keeping on trying to get around the law. However, what works to get you in may not work to get you out and someone else in. Even if the developer can fix the problem I doubt he will be around and inclined to fix in 5 to 10 years if needed.

I am in the market to buy....and I dont have a Thai wife..... but I am under no illusions that selling may be interesting at some point in the future ....and what I am prepared to pay is dropping fast

[Ollie]

I have no interest in Phuket, but do you know what I would really like? A thread about whats happening with sales, prices. sales, Co. routes, lease etc without the involvement of those with a vested interest on this forum getting involved and selling their slant, fitted to their own needs.

However, I realise that is impossible.

Thats why my money is staying out of LOS until this whole process comes to its natural conclusion and everyone knows where they stand.

[wilko]

Absolute number figures on land transfer title, even relative to the previous month are almost meaningless unless you also consider the # of farrang in Thailand for any given month. Remember July is pretty much low season, so of course there's going to be less business involving farrangs. It happens EVERY year.

The land office on Samui had been closed for a few weeks while the DSI boys went through, but's its been open again now for over two weeks. They claimed they were checking every title issued here in the last five years. BS. They left after several weeks with no new arrests, no new pronouncements, not even any new "claims" other than that they were going to "expand" their search. Ie, they came up empty handed, so now they have to justify their jobs by hunting elsewhere. Their claims had been wildly exaggerated all along in a conspiracy with the Thai media to justify the DSI's own existence and simultaneously scare away farrang buyers. So far, despite all the hubbub, land deals there are now continuing again, and the situation has already returned to normal. But it's still only mid season now, dropping down again as the rainy period comes up, so there's never a lot of activity this time of year.

Other than the "Peak" project, whose land titles were cleared within days, the only other published report is about supposed encroachment onto forest preserve land, which represents less than 1/10th of the land area of Samui. All media hype is STILL portraying the issue of Bandidos drugs, money-laundering, and their land grabs as a Thailand wide problem, when, in fact, it isn't. Sure these guys did some bad things, but all the while their business deals pumped a lot of money into the hands of local Thai land owners, architects, construction workers, etc. Not defending their crimes, just the fact that as far as the land deals go, nobody got hurt, they all benefited.

The supposed "encroachment" into forest areas is a very limited, unrelated problem. The problem is that the Thai government "protected forest" areas is just not as big as they thought (hoped). It's only been mandated as a relatively small, isolated area, in the interior of the island, closest to the native port city of Nathon. The problem these DSI guys are finding though (I have it from an inside source) is that all roads lead back to TRT politicians who are still in power. They've made sure the process was smooth as silk. Even the Bangkok Post quoted a senior official who said essentially, even if we find what appears to be a 'dodgy' title, there's virtually no way to prove it is fake. This is because, if land office officials in Bangkok & Samui & Surrathani all signed off on it, and all the records are in the files, it's absolutely no different from any other 'real' land title.

I've not read or even heard of any new arrests, no new charges, and no other land owners affected. And only ONE Thai land official was named, and all that happened to him was a transfer. It's all been a bunch of media hype designed to scare farrang away from buying up the land, so that the local Thais can get in on the deals while the prices are still affordable. Remember, before the bandidos thing came out, the "Peak" 'scandal' really all started because of complaints by local Samui residents who didn't like the fact that some of their local Thai friends were getting rich selling their land to 49% foreign controlled companies who were then building ugly white, flat roofed buildings on *their* island. The Thais are very nationalistic (read: racist) and only want Farrang money, not farrang controlled land, and certainly not farrang houses. That's what this was really all about. But money talks louder than a bunch of whining Thais, so now that they've changed the zoning laws to restrict buildings to Thai style roofs & colors, and shuffled a few heads around at the land office, things there are back to business as usual. After all, high season is coming in just a few months, and the land office officials & real estate moguls here wouldn't dare miss it.

So in comparison what were the figures for July the previous year?

[smilingjim]

Is the purchase of land by farang in LOS now non-existant?

Was it ever?

LaoPo

Well, with regard to any legal ways around the law that leave you in control and protected.

I don't think so...but maybe there's someone* who has 'any legal ways around the law'....? not me!

* that someone could become rich...very rich indeed

LaoPo

[smilingjim]

Is the purchase of land by farang in LOS now non-existant?

Was it ever?

LaoPo

Well, with regard to any legal ways around the law that leave you in control and protected.

I don't think so...but maybe there's someone* who has 'any legal ways around the law'....? not me!

* that someone could become rich...very rich indeed

LaoPo

As I underastand it the only way around this problem is to buy the land through a 100% owned Thai Company and then transfer the shares up to the 49% limit for a foreigner but you need a good Thai lawyer to structure it all from start ot finish - in advance!

[Jiminthesun]

The interesting twist about the Peak development in Samui is that if an individual wants to buy, the legal solution that is being offered, is to hold your funds and the title deeds of your property in an Escrow account here in Bangkok. i.e you dont really hold title but you still hold control. Interestingly the preferred legal soultion on 3 other developments over on the Phuket side (ON topic!), is to sell freehold on the house but only leasehold (30*2*2) on the land. Although as I understand it there is still no legal precedent for what happens if a lease expires with a freehold property. I understand that they are including a clause stating that if the law changes then freehold will automatically pass to the buyer.

There is no doubt that recent press coverage has put off buyers, amplified by the additional mess about "Nominees", but my clients in Europe are still keen, drawn by Thailands exotic allure.

The other big issues for Phuket, in my view is the number of high end properties coming on line at the same time. As soon as you start selling property over 20M Baht, clients ask you about the mortgage issue, and with interest rates around 8.75% and up, unless the development owner has a heavyweight contact at the Singapore Branch of the Bangkok Bank, the whole thing becomes a hard sell.

[brahmburgers]

it's assumed that land transfers dropped only because of Thai authorities (supposedly) taking a closer look at questionable ownerwhip arrangements by proxy corporations, etc. The original article mentioned 'land transfers' without specification so it appears to cover all transfers.

If you look at all transfers among foreigners, you'll find that the majority are in the buyer's wife's name - so that precludes the proxy biz shenanigans. Even so, a dramatic lessening of land transfers in Phuket could well have much more to do with the increasing awareness among (some) foreigners that quality of life in Thailand is declining. It's particularly true in places like Phuket where locals are getting more surly, prices padded, environment detriorating and noise increasing.

[wolfmanjack]

Everone is talking about rich falangs raising the prices of land. I live in Chiang Mai and it is the rich Thais from Bkk that are raising the prices here. I paid 300K per rai for the land I have and now the prices are skyrocketing. The bangkok thais bought the land in front of me for 400K per rai and now are asking 2mill per rai. Crazy. Go anywhere in the mountains around chiang mai and look for land that has a nice view. Then ask who owns it. The answer will be Rich Bangkok people. Any one have a link to how many $Millionaires$ there are in thailand ?? using US$ not thai baht as a guide.

[wilko]

If you look at all transfers among foreigners, you'll find that the majority are in the buyer's wife's name

Are you sure? where do you get that info from?

Of course technically that's not foreigners buying land it's Thais - the wife is the buyer.

Most people I know don't have a wife or don't want it in their wives' names.

[KRNN]

As a slave in Property Business, I can say that all purchase transactions in Phuket has been halted since May.

Last time I check, an official in Land Office told me that they would not register the purchase of Farang-owned, Farang-directed companies with Thai nominees.

Land buyers are going crazy around here.

They had to find a Thai person, as in individual, to be a transferee and take the title.

So, all this began when someone in the Government thought that Farangs are buying more and more land using Thai company name that they own, with Thai nominees.

Then, July 20, over a month ago, Ministry of Commerce just issued directive said that if a Farang wants to open a company with Thai shareholders, those Thais must provide their bank statement or guarantee letter from bank showing they have enough money to invest in such company. Or in case Thais said they borrowed money to invest in the company, they should provide loan agreement.

This is like the end of the land purchasing transaction for farangs, at least for the time being, I think.

But I believe, like many officials in many government offices I talked to, that once Thaksin return to power after October election, things will ease up.

What we do now in Phuket about this transaction is we get the buyers to take 30 years lease with 2 30-year extention. It's a little bit reluctant between us and buyers, but there's nothing else we can do.

[h90]

interesting, I havn't heard of a single land sale in samui in the last four weeks eigher, does anyone know of any land transactions involving foriegn owned companys in the last month anywhere in Thailand?

what my wife explained for me was, that there is a very big case, Thaksin or his group took 400 rai aof land in Koh Samui, with bending the laws till it is formal legal. As it is legal they are punishing a other group in Koh Samui who are foreigner and broke the law in hugh scale.

Don´t expect that I understand that....

But this is the explanation I got and for everyone in Thailand that makes perfect sense