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

[Pinot]

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.

When was the last condo you flipped?

2009

Living in Phuket, we all know nothing is selling. Homes and condos alike. I know a realtor who does occasionally sell something in the the high end of things and lives off that. He admits everyone in the industry is starving. Real estate offices are barely open. Russians propped up the market there for a time but that's over.

Yet, they continue to build.

[mcfish]

Big deal.

Sounds much smarter to buy a condo in a "farang-friendly" country, and rent it out. Use that income to rent yourself a place here in Thailand. Never buy here...is still what I am thinking. Must be some good investments, in other parts of the world....where they protect people with income who want to retire.

Things change with the wind. What they do this year, might not be the same next year. I thought condo ownership might be viable....but it sounds like a crackdown.

I never know if I can renew my retirement extension..from year to year....with certainty. If you become disqualified...and own a condo...basically you are forced to sell it.

You make it sound easy, just go and buy a place in the west rent it and laugh your way to the bank

In 2008 half the western world lost everything in the sub prime global property crash. Many lost up to 90% of their property value and half of America will never recover whilst Thailand was completely untouched, not even a tiny drop in prices and in fact new condos continue the uptrend ( no subprime here) and I knew many Americans who were highly critical of the thai condo market but were devastated at making the wrong choices. they will never be buying here either, to expensive now

If your relying on western property rental to survive in Thailand and that rent stops, your going home sweet home again and even with rent income the Brits are going home soon as the pound implodes. And they wont be buying here either as that pound spirals down..its all about timing

If you want to rent out your condo here and if it comes to it then paying tax should not be an issue as it isnt in the rest of the world. I still maintain buy to live and in 7 years time my Condo has paid for itself in saved rent money alone..wont owe me a bean

Edited July 9, 2016 by mcfish

[cumgranosalum]

so...what will they achieve by this?.....a load of condos that can't be rented out......or need to be sold - it is looks like if you are Thai, you'll be headed for a cheap condo market with rentals staying the same?

[hawker9000]

... and then they came for us ...

I genuinely sympathize with expats in Thailand who still don't get it. 'Just a matter of tme.

[sage1255]

exactly why best to rent. Easy come and go and property isnt likely to appreciate. I will stay a renter in thai

[mettech]

Hotel versus condo it make some sense to regulate the condo situation so every one would have a choice on rental pricing and to be honest condo are suppose to be own for one purpose only is to have only one owner and perhaps family jointly be owners but not renter.

[moe666]

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

If you are not Thai you need a work permit to work, that includes renting out condos for long term or short term, even volunteering you need a work permit

[MonkeySee1]

I'd imagine that relatively few of the tourists who rent apartments or villas would want to stay in a thai hotel. I'd just holiday in Bali rather than Phuket. There's little to choose between the two places.

The biggest impact will be on property investor confidence. Condos were sold (certainly in Pattaya) on the back of holiday rental incomes. Take that away and you're left with nothing more than an empty slave box. I wonder how many of the slum villa type moo bans will suffer - many of these units are rented out by on site management companies. How many have hotel licences?

Edited July 9, 2016 by MonkeySee1

[moe666]

Someone I knew here in CM bought a few condos for rental. This guy got side ways with the landlord, one day the immigration police game knocking lets see your visa or extensionof stay. Then the magic words let us see your work permit. oooo no work permit to bad youarein violation of what ever law. He was renting long stay 6 months to a year only. He eventually worked it out every thing in wifes name

[kaces]

If the laws and regulatioms are unpredictable then the sustainability is over.

If the Thai economy likes to keep the growth higher they should better have the rules not changing and making a football match 120 minutes

Edited July 9, 2016 by kaces

[Mangostin]

We should be glad the authorities have finally taken some action against all these illegal's workers, just wait till they will step up a bit further their checks, because if a farang it's breathing the air that a thai could have, obviously that needs to be pointed out, and how the farang can keep breathing here, without exchanging money, by for example going to buy it's own dinner? We need a crackdown!

And as soon as the country will be freed by this plague, i really hope that they will go to do the same thing in the lands from where these fellongs comes from, let's get to the root of it fast, because if they are owning a home or doing a job abroad, that's something that a thai could do, so we all need to make sure the world adhere to the laws....

[ThaiWai]

This thread is comedic and so easily divided by condo owners/landlords who thought they would just "do what everyone else does" and those who were smart enough to stay in the "rent never buy in Thai" crowd. Bottoms line, if volunteering in Thailand requires a WP, why would you think a condo rental business (which is exactly what we are talking about) would not? People claiming "Thais don't want foreign competition" are right. Every other country protects its citizens from foreign workers and business to maintain employment for its citizens so why not here? People saying the money is transferred to a foreign account therefore "no money is made in Thailand" are splitting hairs. Without a Thai nexus the money is not made so you can't argue that Thailand has no say in money being made off their soil. For the condo owners saying "2 week transients are just like home owners" are just flat out lying to themselves. If you want to run hotel, apartment rental business, b&b or anything in between then follow the laws (enforced or not) and do it the right way and you won't be caught in a jam when someone decides to start enforcing existing laws. Airbnb is a monster idea and no doubt taking a huge HUGE cut if hotel operators business. To think the hotel owners would just be quiet as their customers dwindle to nothing is foolish. I got a feeling the condo buying market for people who actually want to live in a condo is going up and FAST.

[impulse]

If the laws and regulatioms are unpredictable then the sustainability is iver/

If the Thai economy likes to keep the growth they should better have the rules not changing and making a football match 120 minutes

There have been no rule changes here. There has only been a bona fide change in enforcement of the long existing shorter than 30 day rental rules in some areas of Thailand for condos not registered as hotel rooms.

The OP of this thread is a 2nd hand legal opinion that the law requires a work permit to rent property, specifically condos in the referenced project. It's not a rule change- it's always been that way. It's not a new announcement by the government, it's a legal opinion as a result of asking the relevant agency what the rules are.

And there is no indication that there will be a change in enforcement. Just a reminder that the rule is on the books.

Edited July 9, 2016 by impulse

[boonchu]

What hoops do you have to skip through to get a work permit for renting out a condo, without having a Thai company?

What would the requirements be?

[kaces]

In my country(Turkey) we did sell thousands of the properties to the foreigners and most of the foreigners (except 2 or 3 countries) are allowed to own hundred percent of the property with a deed/

And the exception is the land more than 300.000 sqm/If it is more still you may own but the resolution of the board of the Ministers needed.

I love Thailand /have friends here and come at least twice a year but buying a property is not possible here

[Mudcrab]

Can anyone confirm or deny the statement that units bought under the foreign quota (I'm assuming that's the 49%?) can only be purchased for personal dwelling? And does that mean the personal dwelling of the owner only- i.e., not for rent to others? That would put quite a wet blanket on some of my foreign coworkers who own multiple condos for rental income...

Sure, no problem....I can categorically confirm or deny.

Anything else you'd like help with?

Edited July 9, 2016 by Mudcrab

[Peterw42]

In my country(Turkey) we did sell thousands of the properties to the foreigners and most of the foreigners (except 2 or 3 countries) are allowed to own hundred percent of the property with a deed/

And the exception is the land more than 300.000 sqm/If it is more still you may own but the resolution of the board of the Ministers needed.

I love Thailand /have friends here and come at least twice a year but buying a property is not possible here

Of course it's possible. Any foreigner can buy a condominium in there own name in Thailand.

[Mudcrab]

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..

What has climate change, or lack thereof, have to do with condo rentals?

Edited July 9, 2016 by Mudcrab

[gandalf12]

hey man, thai rak thai

thai owner off course does not have to do anything and in the least pay taxes on the rest

better ask on arrival to give your wallet & be on the next plane to your home country

too bad the other countries in the world don't have the balls to impose the same stupid laws on thai citizen... but that would be unconstitutional, rascism, unequal, ...

So those are the good things we should do, I dont see a down side. We should impose similar rules on them I agree. You cant blame the Thai's it is our governments fault

[optad]

Why should the Thai govt have to suffer cuts for legislated taxable income? It is within stated regulations, as with most countries too. Too many here have biases which do not reflect home country rights. I wish we had the same duties imposed on Chinese managed spaces in Melbourne. In any event, this is more of investment re earnings problem which contextualises the WP issues re timing of the let.

[Peterw42]

Confusion as motorbike owners told they now need a Helmut.

Wait a minute, that's always been the law.

Maybe it's the same as WP and long term rentals. It's always been the actual law, it's not enforced.

And, nobody has said anything about it being enforced. Nobody,zilch, zero.

The situation for long term rentals is no different today, from last week, last year.

Some guys lawyer said, technically you need a WP. That's it, no gov announcement, crackdown, no change of law.

Yet, somehow the doom and gloom brigade are now predicting the end of the condo world

[manhood]

Well no condo to rent out but Thailand is getting a more crazy place from day to day!

What the hell they want to protect???????

I agree that someone renting out his condo should pay tax. But work permit???

Totaly crazy!!!!!!!!

[NamKangMan]

This thread is comedic and so easily divided by condo owners/landlords who thought they would just "do what everyone else does" and those who were smart enough to stay in the "rent never buy in Thai" crowd. Bottoms line, if volunteering in Thailand requires a WP, why would you think a condo rental business (which is exactly what we are talking about) would not? People claiming "Thais don't want foreign competition" are right. Every other country protects its citizens from foreign workers and business to maintain employment for its citizens so why not here? People saying the money is transferred to a foreign account therefore "no money is made in Thailand" are splitting hairs. Without a Thai nexus the money is not made so you can't argue that Thailand has no say in money being made off their soil. For the condo owners saying "2 week transients are just like home owners" are just flat out lying to themselves. If you want to run hotel, apartment rental business, b&b or anything in between then follow the laws (enforced or not) and do it the right way and you won't be caught in a jam when someone decides to start enforcing existing laws. Airbnb is a monster idea and no doubt taking a huge HUGE cut if hotel operators business. To think the hotel owners would just be quiet as their customers dwindle to nothing is foolish. I got a feeling the condo buying market for people who actually want to live in a condo is going up and FAST.

"People saying the money is transferred to a foreign account therefore "no money is made in Thailand" are splitting hairs." - the legalities and taxes aside for renting condos for short term, before we discuss "money" and "foreign accounts" lets look at whether the foreign condo owner is within Thailand for a start, and if he isn't, and is accepting bookings whilst sitting in his lounge room, in his home country, what work has he performed in Thailand, and since he is not even in the country, why does he need a work permit to do this?

The authorities assume most condo short term renters are within Thailand, advertising, marketing, inspecting, accepting payment, cleaning, repairing, accounting and banking - yes, i agree, they are working.

There has always been debate on this forum whether or not you are allowed to paint your own home, or fix your own kitchen sink etc. Obviously, painting and plumbing are occupations reserved for Thai's. Most here have said you can maintain your own home, so why can't you also rent out your own home?

Then, there are those who have left Phuket, and Thailand, for that matter, the work permit requirement is inapplicable to them, as they are not even in Thailand.

Using the Thai labor laws may stop some condo owners who live on Phuket, however, I am sure they will continue to do all the computer work, and have their Thai girlfriend / wife / casual employee do the face to face and manual work.

The condo owner using AirBnB, from outside Thailand, and using paid Thai management staff, or casual employees, to do the same, isn't under Thai jurisdiction when the work is performed. How can they come under Thai labor laws? In fact, they are creating employment for Thai's, because they are not here to do it themselves.

If they are serious about stopping short term condo rental, there will have to be enforcement of hotel licensing laws, and Thai labor laws, on a grand scale here. If they were to do so, it would signal the end of property investment on Phuket, at a time they need all the foreign investment they can get here.

That said, it has been deemed 1 month is not short term rental, so the condo owner can still have 12 different people rent their condo in a year, whilst it may be also be vacant for 6 months of the year, as most of the 1 month rentals may actually be 2 week rentals. Some return being better than no return at all, but condo owners in the same block may still have 12 different neighbors a year, instead of a possible 24. So, the issue may decrease, but still exist.

[mettech]

Thai people are fast learner because they notice how a foreigner is making money and also investing for their own profit so genera Prayut is not stupid he could read the way foreigners are conducting business and not reporting any income to government.

We are to blame we are showing them how to do it.

We hve to be more conservative and play fair.

[Peterphuket]

I see admin has removed the entire post, I respect the rules but wish they had just cropped the Bangkok Post link and quote there was other info there.

Here is the same info from another source - http://www.thephuketnews.com/airbnb-draws-scrutiny-as-hotels-seek-fairness-56455.php

The final paragraph of the letter in the OP does not change this violation, assuming Mr Techaruvichit is correct.

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.

And... don't forget one other important point voiced by the Vice Governor and Land Department Acting Chief in another thread:

"Buildings that are registered as condominiums cannot operate as a hotel".

So, I would draw the conclusion that a hotel license cannot be obtained for units in a registered condominium.

So....talk different, can't used as a hotel, problem solved!

They make the rules, that's are the consequences.

[NamKangMan]

Another issue for the condo owner is leasing their condo to someone on a cheaper 1 year lease, and that person then advertises it on websites for more lucrative short term rental prices, and keeps the difference in price - basically, subleases the property.

I know two guys doing this on Phuket. They just stay at each others place when either of them get a short term rental.

How can the condo owner be responsible for this, especially when they are not even in Thailand?

Edited July 9, 2016 by NamKangMan

[Destiny1990]

Well most foreigner condo owners in Thailand would be fine to pay some tax over their rental income and it be extra income for thai tax department.however work permits are unworkable as it needs 4 staff etc and already the monthly cost for a work permit are higher then the rent u will receive.Owners can rent out their units without being personally involved so its not working.so now even these unfoundated rumors about needing work permits will only harm the thai real estate market further .Buyers will stop buying, sellers cant sell and owners cant rent out their properties.Seems with this business model Thailand would miss lots of tax revenue on property sales ,property purchases and property rentals.in most countries tax departments are keen to receive tax revenue from foreigners who bought a property in that country and are renting it out so why should it be different here.

[mcfish]

Another issue for the condo owner is leasing their condo to someone on a cheaper 1 year lease, and that person then advertises it on websites for more lucrative short term rental prices, and keeps the difference in price - basically, subleases the property.

I know two guys doing this on Phuket. They just stay at each others place when either of them get a short term rental.

How can the condo owner be responsible for this, especially when they are not even in Thailand?

is this a trick question lol

Owner will have a copy of the actual lease showing he is not liable for other peoples actions. Same if a murder is committed or the tenant burns down the whole condomium block, its hardly the landlords fault

Edited July 9, 2016 by mcfish

[NamKangMan]

Another issue for the condo owner is leasing their condo to someone on a cheaper 1 year lease, and that person then advertises it on websites for more lucrative short term rental prices, and keeps the difference in price - basically, subleases the property.

I know two guys doing this on Phuket. They just stay at each others place when either of them get a short term rental.

How can the condo owner be responsible for this, especially when they are not even in Thailand?

is this a trick question lol

Owner will have a copy of the actual lease showing he is not liable for other peoples actions. Same if a murder is committed or the tenant burns down the whole condomium block, its hardly the landlords fault

So now they need laws against leasees - right?

More people to chase around. The owner owns the condo that is illegally being used as a hotel room by another party.

I doubt they will be able to enforce any of this.

[Mudcrab]

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.

I've only rented condos a couple of times many years ago. I found them to be more expensive and more hassle than a hotel room. I like it when someone else makes my bed and cleans up after me.