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

[mcfish]

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

What is nonsense?

And what is the correct information?

The thread title.

[ChrisY1]

Buy a condo in the Bahamas.

[impulse]

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.

Times are a changin'. For decades- and not that long ago, people also lived on back to back visa runs, cleared up multi-year overstays and were back in country in time for tomorrow's dinner date, and got back to back ED visas without ever darkening the door of a school.

If part of your ROI is renting the unit out while it's appreciating in value, it may be time to add a hefty risk weighting factor on that part of the calculation. And another factor for finding someone to sell it to if their plan was to rent it out. Maybe it'll still work out. Maybe not.

Edited July 9, 2016 by impulse

[TallGuyJohninBKK]

In this topic...

Two different laws here.

1 - A work permit is required for all rentals.

2 - A hotel licence is required for sub 30 day rentals.

Look at the last paragraph of the letter in post #1 30 days and up is exempt

That's not the way I read it. I read it as saying:

--work permits are required by any foreigner renting housing, unless it's being done thru a Thai company (instead of an individual owner). The exempt reference in the last pgh relates to Thai company ownership, not the length of the rental.

--such rentals must be 30 days or longer (so as to not illegally compete with the hotel industry and their day to day rentals).

Edited July 9, 2016 by TallGuyJohninBKK

[micmichd]

Confiscation if the owner disobeys. That's the worst case scenario. Everything is possible in the current climate...

Guess it's for taxation. Should be normal in a civilized country that people who make profits pay their taxes to the country whose infrastructure they use.

[mcfish]

In this topic...

Two different laws here.

1 - A work permit is required for all rentals.

2 - A hotel licence is required for sub 30 day rentals.

Look at the last paragraph of the letter in post #1 30 days and up is exempt

That's not the way I read it. I read it as saying:

--work permits are required by any foreigner renting housing, unless it's being done thru a Thai company (instead of an individual owner). The exempt reference in the last pgh relates to Thai company ownership, not the length of the rental.

--such rentals must be 30 days or longer (so as to not illegally compete with the hotel industry and their day to day rentals).

Its all irrelevant since that is not an official letter and there is no official request from anyone for foreigner landlords to provide a work visa short term or long term rentals

What is official is you cant rent your place out under 30 days as was reported officially yesterday

[TallGuyJohninBKK]

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.

Any individual owner of housing being offered for rent presumably would have a pretty difficult time producing the several Thai employees required in order to qualify for a single farang work permit, among other issues involved.

[TallGuyJohninBKK]

Its all irrelevant since that is not an official letter and there is no official request from anyone for foreigner landlords to provide a work visa short term or long term rentals

No, it's not an official government notice, but those are often the LAST place that news of changing policies or enforcement gets posted, since the government authorities typically are so slow/poor/inept at communicating clearly, especially for foreign audiences.

It's a letter from a private concern that says they have received that advice from government officials. In the end, like so many other things, it's going to depend on whether the government is actually going to be serious about enforcing these rules, or like so much else, they'll remain things that just get ignored.

But where there's money involved and the issue is foreigners potentially taking the money out of Thai pockets (by being allowed to rent out housing units) especially at a time when the economy and finances are doing poorly, I wouldn't want to bet money on the outcome.

[xvend]

read only the OP, but if you want to run a business, pay up.

[madmitch]

All this has probably come about due to "influential" hotel owners whingeing that their occupancy rates are down.

There are in reality very few properties available to rent on Airbnb. A quick look came up with 306 in Phuket, for example. Some of these are hotels and guesthouses anyway.

The real reason that occupancy rates are down is that despite the number of visitors being up, the average length of stay is much lower, and the number of booked hotel nights is therefore well down.

The work permit issue should also be the case for owners of houses and villas that rent them out either long or short term and not just condos.

I believe this whole topic will die a death soon. As someone who rents out a condo in Bangkok I hope so, unless they create a simple work permit for individuals such as me, meaning that we'd have to pay tax. The cost of the WP and tax would be a money-maker for the treasury. It would make sense but for that reason it won't happen!

Edited July 9, 2016 by madmitch

[MonkeySee1]

Rent the unit to a thai nominee on long term agreement. Use nominee as owner for short let purposes

[casualbiker]

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..

I'm paying half the mortgage cost (11k) for a house the same size as the mortgage cost (3.2 million. 3bed detached) But I'm not in BKK. I'm about 40k outside. The joys of renting!

[whaleboneman]

You're making a big assumption that the last paragraph is intended to act as an exemption to everything mentioned prior to it. I do not believe it is - it is simply stating that rentals are not allowed at all for less than 30 days.

The post I linked to states that any renter, Thai or not, requires a hotel licence to rent for less than 30 days. To get a hotel licence I expect one must be a Thai Co.

That's my interpretation of these two bits of information anyway.

I think you mean "landlord" not "renter". Might be a good time to buy a condo soon (for personal use only) as the farang condo market will be seriously impacted.

Lately, I'm getting the feeling that someone doesn't want us here.

[bkkcanuck8]

In this topic...

Two different laws here.

1 - A work permit is required for all rentals.

2 - A hotel licence is required for sub 30 day rentals.

Look at the last paragraph of the letter in post #1 30 days and up is exempt

That's not the way I read it. I read it as saying:

--work permits are required by any foreigner renting housing, unless it's being done thru a Thai company (instead of an individual owner). The exempt reference in the last pgh relates to Thai company ownership, not the length of the rental.

--such rentals must be 30 days or longer (so as to not illegally compete with the hotel industry and their day to day rentals).

Its all irrelevant since that is not an official letter and there is no official request from anyone for foreigner landlords to provide a work visa short term or long term rentals

What is official is you cant rent your place out under 30 days as was reported officially yesterday

The whole letter was technically reporting of queries of official organizations where the person asking the question is initiating them. The Ministry of Labour will respond with the legal response of what is strictly considered labour (and the law is quite broad). If you are buying property for the purposes of renting out then you are operating a business (in many cases in the west if you don't want to incorporate - you report the income on your personal taxes - which many foreigners never file). What will and will not be enforced is up to the person enforcing it at the time - which is very common (not just in Thailand).

If you come up on the radar for any reason.... you are at risk of anything you do being strictly interpreted. This may include:

- Renting anything more than a primary residence where you are out of the country (you have not incorporated and you are foreign - which means reporting it on personal income tax instead of starting a company).

- Any labour done for company (which you have not registered) would require a WP - which you would not have. This includes maintenance and administrative.

- Non-reporting of rental or business income (because most foreigners not working here are not filing tax forms).

So yes it is not an official letter, but if you come to the attention of authorities for any reasons then you be very exposed legally. (which some people may not have considered)

The reason why authorities are interested in it is the 30 day rentals. If you are doing that and you bring attention to yourselves - the rest of the exposures are at play. If you are renting your property long-term while not living there because you are not local - authorities will not see nor be interested in the other potential legal exposures you have.

[Ronuk]

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

Not only Phuket so how do you see this as utter nonsense? Renting out your Condo or other property is an 'Income'. You 100% need a work permit and be registered as a Thai Company. As for not being in the country and renting your property out, that makes it no better, just worse. Times are a changing. Be prepared to lose the lot because that's how it works here.

A source tells me over 30 people are under investigation in Hua Hin for owning houses they actually live in and not even renting them out. The days of simply making a Thai Company just to buy a house are over.

''It is not only the authorities in Phuket which have issued warnings to property owners about renting out their condos illegally.

In May, local government officials raided residential villas and condos in Pranburi, south of Hua Hin, which were suspected of renting out rooms and operating without a hotel license''.

[casualbiker]

In this topic...

Two different laws here.

1 - A work permit is required for all rentals.

2 - A hotel licence is required for sub 30 day rentals.

Look at the last paragraph of the letter in post #1 30 days and up is exempt

That's not the way I read it. I read it as saying:

--work permits are required by any foreigner renting housing, unless it's being done thru a Thai company (instead of an individual owner). The exempt reference in the last pgh relates to Thai company ownership, not the length of the rental.

--such rentals must be 30 days or longer (so as to not illegally compete with the hotel industry and their day to day rentals).

And to get a Work Permit you either need to work for a registered company or in fact own a registered company (49% <deleted> and all) so effectively it is saying to cannot rent your property out.

[casualbiker]

Rent the unit to a thai nominee on long term agreement. Use nominee as owner for short let purposes

you're still renting it so still require a WP!

[balo]

I think it's safe to assume that this new law will not help to boost the sales of new condo units. Most condo owners who do not live there would like to rent out .

[gandalf12]

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 ?

In the UK they dont make it impossible for you to register that is the difference

[off road pat]

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..

My idea for some 30 or so years,!! never buy a house or condo !! just rent what you need, and if something goes wrong? you can leave at a moments notice without any big loss.

Best regards,

[N2it]

Easy to bypass, use a agent...small fee, but worth it. They have licenses.

[gandalf12]

I think it's safe to assume that this new law will not help to boost the sales of new condo units. Most condo owners who do not live there would like to rent out .

There will most likely be a down turn in Condo sales. As you say many people buy to spend a few weeks holiday in and rent the rest of the year. One thing I dont understand is what if the rent changes hands outside of Thailand or if you let a family member / friend use the condo for a couple of weeks?

[bkkcanuck8]

I think it's safe to assume that this new law will not help to boost the sales of new condo units. Most condo owners who do not live there would like to rent out .

I read an article around the turn of the year that mentioned developers this year were focusing more on single unit development and slowing down on major condo projects because the market was not great.... Condos that are western oriented (and usually higher priced) may be impacted more - but it would be hard to measure right now.... I would expect that the vast majority of condo rentals are from Thai owners - and most of them up until recently focused on long-term (over 30 days) rentals. It will have an affect likely, but hard to measure.

[N2it]

I think it's safe to assume that this new law will not help to boost the sales of new condo units. Most condo owners who do not live there would like to rent out .

There will most likely be a down turn in Condo sales. As you say many people buy to spend a few weeks holiday in and rent the rest of the year. One thing I dont understand is what if the rent changes hands outside of Thailand or if you let a family member / friend use the condo for a couple of weeks?

Called "Time Shares." Sales will drop like a rock...if they haven't already. Phuket, forget it!

[Ronuk]

I think it's safe to assume that this new law will not help to boost the sales of new condo units. Most condo owners who do not live there would like to rent out .

It is not a new Law. It has always been illegal to earn an income in Thailand and not be in possession of a work permit. They are just applying the law which has always been there. You cannot just do what you like here anymore and in my mind, that is fair enough. Just the same as they are coming down on Tourist Visas being used to live in the country on a full time basis. It's all coming to an end.

[casualbiker]

Easy to bypass, use a agent...small fee, but worth it. They have licenses.

but you are still renting to the agent... the work permit laws in this country are an ass. This idea would obviously be workable but I believe for the under 30 day rental your agent would need to get a hotel licence for your property.

[mcfish]

I think it's safe to assume that this new law will not help to boost the sales of new condo units. Most condo owners who do not live there would like to rent out .

There is no new law. Its always been in place except that someone has brought it up on Thai Visa for us experts to dissect and will be forgotten within 3 days as we dissect other more pressing matters

Edited July 9, 2016 by mcfish

[DrTuner]

If you ask Labor or Revenue offices they'll do their damnest to make sure they can push on as many rules and taxes as they can. Enforcement? Yeah right.

[casualbiker]

I think it's safe to assume that this new law will not help to boost the sales of new condo units. Most condo owners who do not live there would like to rent out .

It is not a new Law. It has always been illegal to earn an income in Thailand and not be in possession of a work permit. They are just applying the law which has always been there. You cannot just do what you like here anymore and in my mind, that is fair enough. Just the same as they are coming down on Tourist Visas being used to live in the country on a full time basis. It's all coming to an end.

True. But only FAIR enough IF you could actually GET a WP. In this instance you can't get one for purely renting out your own property. It's the same as the many online internet workers be they call centre, teachers etc.. no WP exists that an individual can get without a Thai registered company backing them.

[billbellamy]

I've read both the letter and the Bangkok Post article more than once.

I am not claiming there is a law against long term rentals. I am claiming a law against short term rentals - less than 30 days, for ANY entity, Thai or foreign, regardless of WP or not, unless they have a Hotel Licence.

If your interpretation differs, that's fine and to be expected generally with Thai laws, however I stand by my opinion.

/ out

"1 - A work permit is required for all rentals."

no worries i was just pointing out that in the letter under work permit section its says its always been illegal and the govt is cracking down

so you point 1 above can not be correct as its never been illegal to rent long term so a work permit is not necessary therefore it doesn't apply to long term rentals.

Long term rentals have zero effect on hotels. And thats what this is all about

You are reading this wrong.

A work permit is required for an individual foreigner if they rent out a room for a cost regardless if it is more or less than 30 days.

A hotel license and a work permit would be required if they rent for less than 30 days and charge.

It states you do not need a work permit if the foreigner has set up a Thai company and the room is under that companies control