Buying a leased land for 30 years and building a house

[parafareno]

Is this safe, buying a lease on land for 30 yaars, I mean only that way you can be sure you can build a house

But how much do these leases go for usually with quite some land?

Also do owners of the lnd usually extend the lease, or they just take your house etc?

I was thinking of builing something that can be moved later on, like a wooden house

Do these thai owner usually mess with you, so they give you fake costs of electricity, water etc??

Basically what are the dangers of leasing the land

[simon43]

I have done this process 4 times over the past 10 years, for building my little house and 4 small guesthouses/hotels on different plots of land.

When leasing 'bare' land (ie no existing buildings or business), you are leasing, not buying. So there should be no upfront payment required, except for the tax to be paid at the land office - you simply agree with the land owner for the lease period and monthly/quarterly lease amount, then sign the lease document and then register it at the local land office.

Do not listen to anyone who tries to convince you to pay 'key money' or some other charge to lease a plot of vacant land.

And before you lease, check with the OrBorTor that it is ok to build whatever you intend to build on that land.

[parafareno]

but are they willing to extend the lease after 30 years or they just want you gone? So they can keep the house?

how much is the usual amount to pay per month? 1000 bht or more?

[Bulldozer Dawn]

I have done this process 4 times over the past 10 years, for building my little house and 4 small guesthouses/hotels on different plots of land.

When leasing 'bare' land (ie no existing buildings or business), you are leasing, not buying. So there should be no upfront payment required, except for the tax to be paid at the land office - you simply agree with the land owner for the lease period and monthly/quarterly lease amount, then sign the lease document and then register it at the local land office.

Do not listen to anyone who tries to convince you to pay 'key money' or some other charge to lease a plot of vacant land.

And before you lease, check with the OrBorTor that it is ok to build whatever you intend to build on that land.

Hey Simon. Do you know what the minimum length lease is that can be registered at the land office. My understanding is that it is 5 years. Is that correct?

And does your hotel lease have a clause in it regarding land tax if that is implemented in the future? I imagine during a 30 year lease period there is at least some risk that a land tax will be introduced.

[simon43]

Hey Simon. Do you know what the minimum length lease is that can be registered at the land office. My understanding is that it is 5 years. Is that correct?

And does your hotel lease have a clause in it regarding land tax if that is implemented in the future? I imagine during a 30 year lease period there is at least some risk that a land tax will be introduced.

All leases over 3 years have to be registered at the land office.

I don't have any such clause, and to be honest, it doesn't worry me. I pay 16,000 baht per month for my half rai of land, with that monthly rent not increasing at all over the lease period. I'm just about to lease a further rai of land to build more rooms. The total monthly lease for the 1.5 rai will be 31,000 baht

[PattayaPhom]

I have done this process 4 times over the past 10 years, for building my little house and 4 small guesthouses/hotels on different plots of land.

When leasing 'bare' land (ie no existing buildings or business), you are leasing, not buying. So there should be no upfront payment required, except for the tax to be paid at the land office - you simply agree with the land owner for the lease period and monthly/quarterly lease amount, then sign the lease document and then register it at the local land office.

Do not listen to anyone who tries to convince you to pay 'key money' or some other charge to lease a plot of vacant land.

And before you lease, check with the OrBorTor that it is ok to build whatever you intend to build on that land.

Good advice and the best way of doing it, however some people pay a one off lump sum with no other payments rather than monthly for the term of upto 30 years.

[Paul944]

1.5 rai for 31,000 baht a month? that is 11.16 million baht over 30 years. Must be a very nice location.

Before thinking about leasing land and building a house I suggest to start with renting a house in the neighborhood you plan to live. If after some time you decide you like the area you live you can look for land if you really want to build your own place.

You did not mention where you want to lease. Land price can vary from 100,000 baht for 1 rai rice field in Isaan to 550 million baht a rai on Sukhumvit road in Bangkok.

Instead of a lease you can also get an usefruct on a property for live.

[simon43]

1.5 rai for 31,000 baht a month? that is 11.16 million baht over 30 years. Must be a very nice location.

No, that is a very cheap rent here in Phuket to lease land. It is in the middle of a rubber-tree plantation..

For me, leasing land via monthly payments makes absolute sense, because I have a viable business on the land and monthly lease payments is good for my cash flow. As a foreigner, I cannot buy land, and leasing longterm fits in with my small hotel businesses - no Thai person's name is required on the land lease.

My leases allow me to sublet and sell my business. I can surrender the land at 3 months notice and hand back the land minus demolished buildings for no penalty.

If my landlord does not want to renew the lease after 30 years (not important since I will be dead by then), I demolish the buildings, relocate the business to another nearby plot of land and give the bare land back to the owner. That is the last thing he wants and so he will renegotiate a new lease.

For one of my hotel leased plots, the monthly rent was high ==> 100,000 baht per month. I sold that business about 5 years ago for a profit.

But leasing land to build a home and only a home, (ie without a business income from the land), needs some thought. I think it is a good idea if you do not need to pass on your little house to your descendants.

Moveable houses, wooden houses etc are also a great idea for leased land.

[Bulldozer Dawn]

1.5 rai for 31,000 baht a month? that is 11.16 million baht over 30 years. Must be a very nice location.

Before thinking about leasing land and building a house I suggest to start with renting a house in the neighborhood you plan to live. If after some time you decide you like the area you live you can look for land if you really want to build your own place.

You did not mention where you want to lease. Land price can vary from 100,000 baht for 1 rai rice field in Isaan to 550 million baht a rai on Sukhumvit road in Bangkok.

Instead of a lease you can also get an usefruct on a property for live.

Wow. You have just made the most deluded self important newbie post of all time.

You obviously don't know who Simon43 is.

To his credit though he didn't smack you. So I will do it for him.

SMACK...

[blackcab]

1.5 rai for 31,000 baht a month? that is 11.16 million baht over 30 years. Must be a very nice location.

Before thinking about leasing land and building a house I suggest to start with renting a house in the neighborhood you plan to live. If after some time you decide you like the area you live you can look for land if you really want to build your own place.

You did not mention where you want to lease. Land price can vary from 100,000 baht for 1 rai rice field in Isaan to 550 million baht a rai on Sukhumvit road in Bangkok.

Instead of a lease you can also get an usefruct on a property for live.

Wow. You have just made the most deluded self important newbie post of all time.

You obviously don't know who Simon43 is.

To his credit though he didn't smack you. So I will do it for him.

SMACK...

It's also 600 million a rai as a minimum on some parts of Sukhumvit (1.5 million a square wah). Assuming you can actually buy 1 rai at a time!

[Bulldozer Dawn]

Simon

Noting that you are renting land from the Thai owner who breaks a bit off from his Rubber farm, how to you go about recording the area and location of your rented plot. Do you get a surveyor in to peg it and give you the details for entry into the lease that you register with the land office?

[mango66]

1.5 rai for 31,000 baht a month? that is 11.16 million baht over 30 years. Must be a very nice location.

Before thinking about leasing land and building a house I suggest to start with renting a house in the neighborhood you plan to live. If after some time you decide you like the area you live you can look for land if you really want to build your own place.

You did not mention where you want to lease. Land price can vary from 100,000 baht for 1 rai rice field in Isaan to 550 million baht a rai on Sukhumvit road in Bangkok.

Instead of a lease you can also get an usefruct on a property for live.

Wow. You have just made the most deluded self important newbie post of all time.

You obviously don't know who Simon43 is.

To his credit though he didn't smack you. So I will do it for him.

SMACK...

It's also 600 million a rai as a minimum on some parts of Sukhumvit (1.5 million a square wah). Assuming you can actually buy 1 rai at a time!

Investors dont needa complete Rai to build a skyscraper with 400 apartments -

so land 500 mill -

it means for the 10 mill per apartment he have only 1 mill land costs,

4 mill construction costs over all 5 mill,

and 5 mill profit on every sold apartment !!

is this a business ??

[Paul944]

1.5 rai for 31,000 baht a month? that is 11.16 million baht over 30 years. Must be a very nice location.

Before thinking about leasing land and building a house I suggest to start with renting a house in the neighborhood you plan to live. If after some time you decide you like the area you live you can look for land if you really want to build your own place.

You did not mention where you want to lease. Land price can vary from 100,000 baht for 1 rai rice field in Isaan to 550 million baht a rai on Sukhumvit road in Bangkok.

Instead of a lease you can also get an usefruct on a property for live.

Wow. You have just made the most deluded self important newbie post of all time.

You obviously don't know who Simon43 is.

To his credit though he didn't smack you. So I will do it for him.

SMACK...

If you had read the whole sentence you would have noticed the remark "Must be a very nice location."

Anyway back to the topic, leasing land and building a house on it. Most people who do this do not expect to outlive the lease time. They just want a place of their own, do not like the idea of renting, or the places available for rent and do not intend to hang on their assets after they have died.

Still there is the question what would be a reasonable 30 year lease price for example land that has a current selling price of 2 million baht. I would say less as 2 million baht but i have no idea how the Thai owner thinks about it.

Keep in mind if you borrow money to pay 2 million baht you would pay about 12000 baht each month for 30 years.

[maxisrael]

My wife leased 87 talang wha to a expat with a newly build house on it 3 bedrooms / 3 bathrooms living area and large kitchen and carpark in a moo baan paid for the whole lease period in full upfront ( incl.0.1 % tax) 1.2 mil Baht so monthly "cost" about 3400 baht over 30 years after the leaser can take the house with him.............

Edited August 6, 2015 by maxisrael

[blackcab]

1.5 rai for 31,000 baht a month? that is 11.16 million baht over 30 years. Must be a very nice location.

Before thinking about leasing land and building a house I suggest to start with renting a house in the neighborhood you plan to live. If after some time you decide you like the area you live you can look for land if you really want to build your own place.

You did not mention where you want to lease. Land price can vary from 100,000 baht for 1 rai rice field in Isaan to 550 million baht a rai on Sukhumvit road in Bangkok.

Instead of a lease you can also get an usefruct on a property for live.

Wow. You have just made the most deluded self important newbie post of all time.

You obviously don't know who Simon43 is.

To his credit though he didn't smack you. So I will do it for him.

SMACK...

It's also 600 million a rai as a minimum on some parts of Sukhumvit (1.5 million a square wah). Assuming you can actually buy 1 rai at a time!

Investors dont needa complete Rai to build a skyscraper with 400 apartments -

so land 500 mill -

it means for the 10 mill per apartment he have only 1 mill land costs,

4 mill construction costs over all 5 mill,

and 5 mill profit on every sold apartment !!

is this a business ??

It is a business, but believe me, the margins are not that generous. The very biggest companies would be happy with 30% profit on a condo project, not that they always get it. Smaller operators should aim to get around 20% profit due to their reduced purchasing power.

[MaeJoMTB]

Keep in mind if you borrow money to pay 2 million baht you would pay about 12000 baht each month for 30 years.

Repayments on a home loan of 2Mbht over 30 years are currently 16,000bht/month.

[whiteman]

My partner leased me 30 years for 1 Rai ) Next to the golf for nothing all I paid was to the government 18000 bhat up front for the 30 year lease and my name is reg on the land deed. InSri Racha.

In the end like some one said Iwill be dead b4 it expires and she can keep the house I built on it. I also bought the land 1 rai. 5 million I have been with my Thai partner 11years.

if for some unknown reason she passers b4 me she is 43 I am 68 I will carry on living there till I pop my cloggs because of the lease I hold with the government

[parafareno]

It is cheaper to just buy via company already build house, and you pay like 15000 for lawyer per year.....seems to be cheaper, and gov will never start hunting falangs who do this , because there are too many, and the tourism would suffer....

[davidst01]

It is cheaper to just buy via company already build house, and you pay like 15000 for lawyer per year.....seems to be cheaper, and gov will never start hunting falangs who do this , because there are too many, and the tourism would suffer....

never say never with the current junta in rule. How do you know for sure...

[Dumbastheycome]

Hey Simon. Do you know what the minimum length lease is that can be registered at the land office. My understanding is that it is 5 years. Is that correct?

And does your hotel lease have a clause in it regarding land tax if that is implemented in the future? I imagine during a 30 year lease period there is at least some risk that a land tax will be introduced.

All leases over 3 years have to be registered at the land office.

I don't have any such clause, and to be honest, it doesn't worry me. I pay 16,000 baht per month for my half rai of land, with that monthly rent not increasing at all over the lease period. I'm just about to lease a further rai of land to build more rooms. The total monthly lease for the 1.5 rai will be 31,000 baht

You lease midtown BKK ????

[blackcab]

Hey Simon. Do you know what the minimum length lease is that can be registered at the land office. My understanding is that it is 5 years. Is that correct?

And does your hotel lease have a clause in it regarding land tax if that is implemented in the future? I imagine during a 30 year lease period there is at least some risk that a land tax will be introduced.

All leases over 3 years have to be registered at the land office.

I don't have any such clause, and to be honest, it doesn't worry me. I pay 16,000 baht per month for my half rai of land, with that monthly rent not increasing at all over the lease period. I'm just about to lease a further rai of land to build more rooms. The total monthly lease for the 1.5 rai will be 31,000 baht

You lease midtown BKK ????

Simon previousy said:

"No, that is a very cheap rent here in Phuket to lease land. It is in the middle of a rubber-tree plantation.."

Which fits, because I haven't seen any rubber tree plantations in midtown BKK lately.

[stgrhe]

I have done this process 4 times over the past 10 years, for building my little house and 4 small guesthouses/hotels on different plots of land.

When leasing 'bare' land (ie no existing buildings or business), you are leasing, not buying. So there should be no upfront payment required, except for the tax to be paid at the land office - you simply agree with the land owner for the lease period and monthly/quarterly lease amount, then sign the lease document and then register it at the local land office.

Do not listen to anyone who tries to convince you to pay 'key money' or some other charge to lease a plot of vacant land.

And before you lease, check with the OrBorTor that it is ok to build whatever you intend to build on that land.

This is good and accurate information. However, buy leasing the land you will not be the owner of the dwelling unless you take some measures first.

1. Make sure the 'owner' of the land is the actual owner

2. Have a solicitor to draw up a proper lease contract.

3. Ensure that the conditions of the contract are transferred to the registration document at the Land Office

4. Register a superficies right (This will enable you to build something on the land)

5. Ensure that the building permit is in your name, and if you use a contractor to construct the house, the construction contract should be in your name.

6. Make sure all payments for the construction is from your account, or if cash, the receipts show you as the payer.

7. Once the construction is completed, register the house at the land office (there is a fee)

This will enable OP to legally own the dwelling on someone elses land.

[RigPig]

I have sort of been looking into this myself a bit lately. If it helps, I believe (and someone may know more), that transportable buildings are classed as temporary and do not need permits etc. to install in place. I guess when the time is right you would just sell the dwelling, put it on some trucks and move on.

There are some pretty economical alternatives around these days that are not only economical but seem only limmited by your imagination.....

[Bulldozer Dawn]

Simon

Noting that you are renting land from the Thai owner who breaks a bit off from his Rubber farm, how to you go about recording the area and location of your rented plot. Do you get a surveyor in to peg it and give you the details for entry into the lease that you register with the land office?

Simon

I a still interested to know how you mapped out your piece of land on the lease...

[simon43]

Noting that you are renting land from the Thai owner who breaks a bit off from his Rubber farm, how to you go about recording the area and location of your rented plot. Do you get a surveyor in to peg it and give you the details for entry into the lease that you register with the land office?

Sorry - forgot to reply!

We pegged it out, measured again and again, then drew this up on a large-scale map of the land, wrote down the actual measurements/dimensions and then added all that detail to he lease contract.

I could have used GPS etc, but for me it is not so important to get ownership of the exact plot to the nearest cm.

I never build closer than 1 metre to any boundary, in case of a future problem.

Simon

[simon43]

This is good and accurate information. However, buy leasing the land you will not be the owner of the dwelling unless you take some measures first.

1. Make sure the 'owner' of the land is the actual owner

2. Have a solicitor to draw up a proper lease contract.

3. Ensure that the conditions of the contract are transferred to the registration document at the Land Office

4. Register a superficies right (This will enable you to build something on the land)

5. Ensure that the building permit is in your name, and if you use a contractor to construct the house, the construction contract should be in your name.

6. Make sure all payments for the construction is from your account, or if cash, the receipts show you as the payer.

7. Once the construction is completed, register the house at the land office (there is a fee)

This will enable OP to legally own the dwelling on someone elses land.

Well, maybe good advice for a expat house construction.

In my case (4 times), I have simply leased the bare land, with the lease contract stipulating that I can build whatever I want on the land, and that at the end of the lease term, I must demolish the buildings and return the bare land to the land owner. I use a 10 baht rental contract form from Tesco-Lotus and the Land Office incorporate this into their registered land lease. No lawyers ever needed, no problems ever occurred.

The land owner is not interested in what I do with the land. I got my business (guesthouse) building permissions and operating licences from my OrBorTor.

Perhaps this is too 'informal' for some, but it works fine for me. As long as I keep paying the lease rent every month, I cannot be thrown off the land. The land owner cannot claim or confiscate the buildings or business.

[Bulldozer Dawn]

Noting that you are renting land from the Thai owner who breaks a bit off from his Rubber farm, how to you go about recording the area and location of your rented plot. Do you get a surveyor in to peg it and give you the details for entry into the lease that you register with the land office?

Sorry - forgot to reply!

We pegged it out, measured again and again, then drew this up on a large-scale map of the land, wrote down the actual measurements/dimensions and then added all that detail to he lease contract.

I could have used GPS etc, but for me it is not so important to get ownership of the exact plot to the nearest cm.

I never build closer than 1 metre to any boundary, in case of a future problem.

Simon

Thanks for that. So basically you annexed a map to your registered lease. Did you get the owner to sign the map?

[simon43]

Did you get the owner to sign the map?

Yes of course. The landowner also came to the Land Office and signed the additional lease papers that the land office drew up

[slipperylobster]

LOL...

I lease a half rai with a 5 bedroom/4bath house for 5000 a month.

Don't need anything but a rental contract. I pay six months in advance.

Just don't build. So many empty houses to choose from...(at least here in chiang mai)

[pj123]

LOL...

I lease a half rai with a 5 bedroom/4bath house for 5000 a month.

Don't need anything but a rental contract. I pay six months in advance.

Just don't build. So many empty houses to choose from...(at least here in chiang mai)

What is the term of the lease?