Confusion as condo owners told they must have a work permit to rent out units

[arithai12]

There is one small aspect they haven't considered. Tourists book a condo apartment also because it is much more comfortable for the same price.

I am not sure that hotel numbers will increase automatically because of this.

They should just enforce proper taxation for those who rent out, regardless of how they do it or for how many nights.

[aussienam]

I have a condo I rent out periodicallly when I am overseas. Property agent manages rentals and this is huge business and a key selling point over many years in selling condos to foreign investors like myself by highlighting that point when selling.

I prefer monthly or more rental incomes anyway as is a hassle and cost more for cleaning etc. to prepare condo for next renter. Fact is many people don't want to stay in hotels and be ripped off and want the flexibility and affordability of condo living overseas.

I had a renter last year who originally planned 4 weeks but had to cut short stay and was only there for 3 weeks. Didn't charge full stay as he is a repeat customer so does that now mean I could be jailed for this? That's ridiculous.

There is legislation regarding income from rent and how that is classified - in general same as bank deposits or other investments in Thailand generating income. It is taxable of course if over a certain amount per annum.

Generally is in line with other countries where rental properties are not considered a business but investment income. But I understand that running condos as hotels is a business and hence would fall under appropriate regulatory requirements and I have no problem with that but I can see ambiguity and misinformation creeping in with naysayers blaming the whole foreign ownership rental market as a sin and to be banned etc. going against what all other developed nations allow.

[KittenKong]

Two rules here can be construed from the disparate sources:

1 - A Hotel Licence is required for ANY sub 30 day let - regardless of the nationality of the lessor.

2 - Foreign lessors require a WP.

So logically:

1 - A foreigner with a WP and no hotel licence can let only for > 30 days

2 - A foreigner with a WP and a hotel licence can let for any period of time

3 - A foreigner with no WP cannot let whatsoever.

You are forgetting the condo act and internal building regs which prohibit the carrying out of any business in areas that are not specifically designated as being commercial (commonly the ground floor). It also requires that the access to these commercial areas be separate from the rest of the building, so that residents are not disturbed by the commercial activity.

No matter how you look at it, and no matter how many permits or licences you have, rental businesses are not legal in the residential part of condo buildings.

[KittenKong]

So, a foreign Phuket condo owner is sitting in their house in the UK, Europe, America etc, and places their condo on AirBnB.

A tourists books the condo for 2 weeks, and forwards AirBnB payment.

AirBnB forward payment to the condo owner's foreign bank account, minus commission, and the foreign condo owner is "working" in Thailand and needs a work permit.

I know farangs who live in Thailand permanently (not Phuket) and who rent out several units each, short-term and long-term. They do their own advertising, arrange their own cleaning, see to check-ins and check-outs and generally manage the whole thing. Some do their own repairs and decorating. As far as I know none pay any tax on their income. As far as I can see they are clearly breaking several different laws.

Anyone in the situation you describe (a non-resident owner of one unit) wanting to avoid problems only has to get some Thai to manage his lettings (minimum 30 days) for him and to declare the income and he will not have worked at all and so will not have done anything wrong.

Phuket continues to embarrass itself on the world stage.

Thailand's biggest embarrassment on the world stage is its inability to pass laws and enforce them, closely followed by the widespread corruption and general greed.

[pattjock]

As far as I know if the owner is a foreigner it can not be used for business.

This goes for boats and cars that must be company or Thai registred if used in business. I guess the same goes for a condo Even long term rental is business and can then not be done legally if the condo is in foreigners name, with or without work permit. Short term rental of condo is never legal, this is covered by the hotel act.

[sweatalot]

The question is: will non Thai get a work permit for letting a condo? I think jobs that Thai can do are not allowed for foreigners anyway

[Orac]

I would only believe the Labour Ministry when they issue the same official notice to foreign investors in SET.

There is also an exchange of money, even more than in the Real Estate sector...

Many buy NVDR (Non Voting Depositary Receipts) which amongst others things do not allow you to vote/control a company and therefore not 'work'.

[oxo1947]

I am sure there will be legal loopholes in this----- i.e you rent to a Thai real estate for 1 year contract which allows them to sub-rent when & where availability or demand. It quite possibly will stop free lance owners doing it through.......................

[LivinginKata]

The question is: will non Thai get a work permit for letting a condo? I think jobs that Thai can do are not allowed for foreigners anyway

The question would be - is it financially viable for a non-Thai to even apply for a WP given need for a Thai company, 4 Thai employees, etc. I think not for a single unit owner.

[casualbiker]

Now the trick will be HOW does that owner actually GET a Work Permit expressly for his "job" renting out his apartment! Would be interesting for someone down in Phuket to actually try... I'm pretty sure it would be impossible without a registered company backing the application.

[jonw8uk]

Im curious is that a work permit for renting under 30 days only ?

edit

Yes it appears this applies only to sub 30 days.

Makes sense to me, well done indeed

I dont read the notice as saying that?

Regardless of nationality, or work permit; a condo cant be offered for sub 30 day lets.

If a foreigner you need a work permit to rent out your condo.

Thats how I read it? could be wrong though.

No mention of villas either in any articles so far - sub 30 day villa rentals are common the world over - are villa developments registered as hotels here??

[casualbiker]

Im curious is that a work permit for renting under 30 days only ?

edit

Yes it appears this applies only to sub 30 days.

Makes sense to me, well done indeed

I dont read the notice as saying that?

Regardless of nationality, or work permit; a condo cant be offered for sub 30 day lets.

If a foreigner you need a work permit to rent out your condo.

Thats how I read it? could be wrong though.

No mention of villas either in any articles so far - sub 30 day villa rentals are common the world over - are villa developments registered as hotels here??

any daily rental.. which under Thai law is anything under 30 days at a time.. obviously you could rent out your villa for 2 weeks (14days).. and state the rent is for 30 days.. but you then wouldn't be able to rent it the for the next 16 days.

Unfortunately without a company you would also NOT be able to get a WP either.

Edited July 9, 2016 by casualbiker

[impulse]

 

let's not kid ourselves, these rules are going to get worse, not better.

I get the sense that we as western foreigners are just collateral damage in the first few rounds of whack-a-mole against Chinese money coming in and dominating some key Thai markets.

We've been reading for years about illegal Chinese tour guides and photographers. Last week, we read about Chinese owning dozens (hundreds?) of tour buses and tourist boats through nominees. This weekend, there's more news about Chinese investors crowding the entrenched Thais out of the fruit market. I suspect this recent push against short term condo rental is directed more against a massive influx of Chinese money into the illegal, but tolerated, rental market.

Western competition has always represented a nuisance, mostly to lower level entities- because most are simply looking for a way to fund their long stay Thailand adventure.

The massive influx of Chinese money and influence represents an existential threat to the entrenched powers because they have the resources and the experience to disrupt the status quo. It seems the powerful in Thailand are just waking up to it.

I agree, but after turning away a bit portion of the western tourist market, can Phuket afford to also turn away the Chinese tourist market?

They are so busy being greedy here that they are actually losing themselves money.

If they're flying in on Chinese airplanes on tickets bought in China, riding around on Chinese owned tour buses and boats using Chinese tour guides and photographers, staying in Chinese owned condos, eating in Chinese owned restaurants, and buying souvenirs and gifts from Chinese owned shops stocked with goodies imported from China or built in Chinese owned Thai trinket factories, I don't see where they benefit Thailand above the wear and tear they bring to the resource.

And that's the way it seems to be headed unless there's some clamping down. I sense that's what's happening.

[ttthailand]

I wonder how Time-Share units fit into this. Buy two weeks a year for X amount ? The way I read it is that Time-Shares also can not be legal unless they are for one month.

[mcfish]

Im curious is that a work permit for renting under 30 days only ?

edit

Yes it appears this applies only to sub 30 days.

Makes sense to me, well done indeed

I dont read the notice as saying that?

Regardless of nationality, or work permit; a condo cant be offered for sub 30 day lets.

If a foreigner you need a work permit to rent out your condo.

Thats how I read it? could be wrong though.

No mention of villas either in any articles so far - sub 30 day villa rentals are common the world over - are villa developments registered as hotels here??

That letter is not OFFICIAL but just something an office person asked a lawyer about. As usual its poorly written and ambiguous. Even the thread title is incorrect, That non official letter doesn't say that at all or it would be an official letter demanding work permits for rentals

As usual naysayers are twisting it into reality..next thing you know we will be told prostitution is illegal

[ttthailand]

Next thing you will see is a law that restricts farang from selling their own condo or house without a work permit.

The joy of renting .....

[GeorgeCross]

Next thing you will see is a law that restricts farang from selling their own condo or house without a work permit.

The joy of renting .....

yeah, those were the days.. i miss paying double the mortgage for a house half the size..

[smedly]

everybody wants Thailand to modernise and rise above the 3rd world status

If you rent a property in the UK you have to register and pay taxes, some people do it for a living - it is their primary income and employment, why should it be any different in Thailand ?

[mihalis]

So, a foreign Phuket condo owner is sitting in their house in the UK, Europe, America etc, and places their condo on AirBnB.

A tourists books the condo for 2 weeks, and forwards AirBnB payment.

AirBnB forward payment to the condo owner's foreign bank account, minus commission, and the foreign condo owner is "working" in Thailand and needs a work permit.

Phuket continues to embarrass itself on the world stage.

Phuket, so this is only applicable to Phuket, wow cool, im safe in Samui then

Can only blame the whinging Hotels, who are missing out on low season $$$$$$$$$$

[jmccarty]

Even more confusion as falangs with interest bearing savings accounts in Thai banks are told they need a work permit to be paid interest on their savings!

[Familyaffairs]

Total and utter nonsense, send me a message if you are an owner in Phuket.

[stevenl]

Total and utter nonsense, send me a message if you are an owner in Phuket.

What is nonsense?

And what is the correct information?

[Destiny1990]

The final knock out for thai real estate industry.

[sahibji]

another intrinsic risk in buying overseas properties.

this is rare kind of requirement that owners must have work permit

before they can rent out their units.

but the law of the country must be respected and the purchase is subject to restricted

usage like for self use only, then the authorities can enforce the

rules accordingly.

[Lupatria]

They also claim that the proper taxation must be paid to Patong municipality

Like all the Thai condo, hotel and guest house owner do???

[Fairynuff]

This will all go away once the relevant palms have been greased.

[Destiny1990]

I think most of us would agree the climate is not great, but the country is great. with that said, I recommend to ONLY rent. I don't think the climate will get better for decades. if you own a condo and can sell, I would.

let's not kid ourselves, these rules are going to get worse, not better.

but LOS is still a great place to be..

Not a great place to invest apearantly.

[jonw8uk]

everybody wants Thailand to modernise and rise above the 3rd world status

If you rent a property in the UK you have to register and pay taxes, some people do it for a living - it is their primary income and employment, why should it be any different in Thailand ?

Fair enough

Now tell us the procedure to get a WP based on letting a condo?

Yup, there isn't one; bringing in rules that are impossible to comply with is a (typical) knee jerk reaction. I'm guessing a phuket official is getting tired of having his earbent by hoteliers, so without any pre-planning, or consultation 'sugests' a rule that can't be followed.

How about creating the rules and procedures, having it reviewed and approved, and then informing the public???

[Fairynuff]

Didn't take long for the anti condo buying doom and gloom merchants to pipe up. So just for them I'll repeat what I've said before. In my time here I've bought and sold a number of condos here (for personal use)...and always made a decent profit.

[bkkcanuck8]

This will all go away once the relevant palms have been greased.

The long term renting of property (one unit) will likely eventually not be a problem as long as you are renting your primary accommodation because you are not in the country. Usually this is done through a management company because of needs for maintenance etc.

But if you are buying multiple units for rental income... or renting one while living in another... I would not count on it since you really are operating a business (whether incorporated or not). And doing work for it is doing work for a business you may own but don't have a work permit for (which I believe is a protected industry).

Anyone that complains about corruption have really nothing to complain about since they would just be enforcing laws and regulations normally (which is usually a money making venture for authorities)

Under 30 days my guess is that the hotel association (bigger bucks) will not let up on the pressure...

Note: not uncommon in western countries to have regulations with regards to below 30 day rentals being considered Hotelling, and over 30 days not; I have had to "checkout" every 30 days before because the hotel did not operate long-term rentals and only as a hotel - and others where I had to specify at the time of renting because different local taxation rules existed for Hotels like 12% tax on hotel rooms).