Foreigner leasing land and building house in Chiang Mai - questions

[nakhe]

1 hour ago, Mekong Thunder said:

Who would buy a house with a 2-year lease apart from the landowner?And why would he do that when he can wait 2 years and get if for free?

 

What about to a local thai person? Would he/she have to buy the land separately from the land owner and house separately from myself?

[elektrified]

2 hours ago, nakhe said:

 

Ah yes I definitely thought of this and suggested the same to my parents (e.g. all the bedrooms being upstairs!). To be honest, I think they are being very short-sighted about getting a two-storey home. I will try to convince them to get a one-storey place. 

 

We have lived in Chiang Mai back in 2004-2008, and they are thankfully well aware of the suburbs around the area and lifestyle. They enjoy the food, culture, and golf. The only real "guaranteed" duration of lease seems to be 30years... god knows what may or may not happen to the home at the end of the 30y lease! I will try to convince them by offering a plump sum of rent money for their entire life.

 

The main reason that my parents want to build a home is because they've never owned property their entire life. I think building a home has some special meaning to them. They've sacrificed a lot for me during my time in university and grad school, so I am doing this for them as a gift, I suppose. But is it really worth tens of thousands of dollars... that I can't say :S

Thailand is not the place for 65 y/o people to experiment building a house on land that they will never own. Anything could go wrong. Shenanigans go on every day here. Just watch some of the videos on youtube or wherever of people who have lost everything on real estate investments that lawyers told them were safe. Unless your parents are filthy rich and can afford to throw away whatever number you mentioned, and not lose a wink of sleep......they should rent.

[elgenon]

8 hours ago, NancyL said:

Yes, it's correct that you can't sign a rental agreement for longer than five years.  But since the OP's parents are 65 years old, that's about the right length of time.  Actually, I'd suggest starting out with a one-year agreement.  Many new arrivals find they've selected the "wrong side of town" when they first arrive.  Maybe they think they want to live in a house in a moo baan -- as the OP is suggesting his parents want to.  But after a few months, they discover the traffic is a killer and all the activities they want to join are in town.  They'd rather rent a condo along the Huey Kaew/Nimman area and cultivate a relationship with a tuk-tuk driver and/or walk to activities for their health.

 

A 20,000 baht/month rental budget is good and should definitely get the OPs parents something equivalent to the 3 million baht home they're considering.  But three bed, three bath and especially TWO levels -- at their age -- OK at age 65, not so good at age 75, perhaps.  Why lock them into this?  Why lock them into something where they have to drive everywhere or pay a fortune for a taxi?  Why lock them into having to employ a maid and gardener?  Is the OP going to be here to keep all these details operational for them?  Sure, they can figure all this out at age 65, but at age 70 or 75?  Then what?  Let the Thai maid take care of them (and their money)?

 

Let them rent a house for a year or two and see if they want the lifestyle.   I'm their age and I sure don't want that lifestyle anymore. 

 

Nancy L,

 

Didn't you previously state in this thread that you had a long term lease that made you feel comfortable to do renovation? Is it 5 years?

Edited October 8, 2016 by elgenon
forgot text

[KhonKaenKowboy]

Is it legal to loan money to a Thai to buy real estate?  Nope...it may not legal for a foreigner to loan money to a Thai, at all.  Can a company be set up for the purpose of  purchasing real estate?  Nope...does it happen?  Yes..Is it a grey area?  Bright grey.  Do people encounter problems building their own homes in the US?  Yes, often going over budget by 30-50%.  Is the same true in Thailand?  Even moreso.

[Odin Norway]

Dont see any problems or worries with leasing land from a thai if you get the lease for life.For this persons question they should do it in the sons name.Then he can have control of the house and land after his parents dont need it anymore.He dont realy need a lawer either if he have someone that speak both languages and can transelate for him.Ofcourse he need to trust the person also.Sorry to say it should not be a girlfriend or wife that transelates.Then after the lease is made and before any money have changed hands.Go to a few independet lawers and ask them if the papers look okey.Thats what I did and I feel better with that lease in my safe ,then a 5 year rent agreement.Dont forget to register and pay tax of the lease at the land-office.Othervice the lease is not registered or legal.

[Odin Norway]

13 hours ago, stgrhe said:

As usual there are many misunderstandings when it comes to questions of land ownership, lease etc. First, forenigers can actually own land in their own name, but only on two very unique circumstances, non of which normally is doable for the normal foreigner.

 

Land can never be leased, actually hired, for life. The maximum term is 30 years. There is a possibility for a one time extension, but only after the first term has expired.

 

Foreigners may have possesory right of land for life. The best option for someone who want to built a house on someone elses land, is to get a superficery right. The second best is a usufruct right and one could also get a habitation right. The most common is leasing, but that is actually the lease benefitial one, and also most expensive.

 

Anything else are in a grey zone, a zone which in fact is illegal and could be costly in the long run, except for the creative solicitor of course.

Yes land can be leased for life.Maybe not in Chiang Mai so this can be different from area to area.Wouldnt say if I didnt have one.

[Gringogazzer]

This should answer a lot of your questions.
https://www.linkedin.com/pulse/20140925020252-11220814-black-magic-in-thailand
https://www.linkedin.com/pulse/crazy-little-thing-called-lease-thailands-hire-property-eder

[jippytum]

15 hours ago, laochef said:

Check out "usurfruct" in Thailand. By law, you, a foreigner, can "own" land, for life...

This is good advice please take it and enjoy the property .

[NancyL]

Yeah, buy your parents a nice 2 bedroom, 2 bath condo and let them decorate/remodel it to their hearts desire.  

 

I think most of the condo buildings in our town are like ours where none of the interior walls are load-bearing.  When we remodeled our condo, we had walls removed and reconfigured the rooms very easily.  

 

But, I still stand by my recommendation for them to rent for a year.  Many new condo buildings are located in areas where people need cars -- I don't understand this logic.  Why plop a high-rise out in the country or next to a busy multi-lane highway where there are no footpaths?  Isn't some of the point of living in a condo to be in an area where you can walk to shops, restaurants, cinema, hospital?

[MissIndy]

Nancy you're assuming that everyone of your age wants the same from their home. Just as you like living close to the old town in a predominately expat area and are happy to rely on public transport, others enjoy living in a semi rural setting and having the independence that driving their own car offers them. 

" Isn't some of the point of living in a condo to be in an area where you can walk to shops, restaurants, cinema, hospital?"

Is it?

Horses for courses.....

Edited October 9, 2016 by MissIndy

[hml367]

19 minutes ago, MissIndy said:

Nancy you're assuming that everyone of your age wants the same from their home. Just as you like living close to the old town in a predominately expat area and are happy to rely on public transport, others enjoy living in a semi rural setting and having the independence that driving their own car offers them. 

" Isn't some of the point of living in a condo to be in an area where you can walk to shops, restaurants, cinema, hospital?"

Is it?

Horses for courses.....

 

This should be quite evident if one takes notice of how many expats are living outside of "town".

 

If I get nothing back from the money I have paid for houses, I am already ahead in the computed monthly outlay versus rent. 

 

The unknown is, as has been noted, how long a person/persons will be able to take advantage of where they decide to stay.

[NancyL]

Yes, it's "horses for courses", but given that the OP's parents have never owned a home and it appears that the OP himself won't be here to help manage details as they age, I question if it's a good for them to try independent, isolated living in a foreign country at this stage of their life.   At best, they may find themselves isolated and in a difficult place to establish a social life and at worst they are opening themselves up to problems with personal safety and exploitation if they're unable to handle all the details involved in running a household.

 

That's why I suggested they rent a house in their target location for a year to see if the lifestyle is right for them.

[Mekong Thunder]

10 hours ago, Odin Norway said:

Dont see any problems or worries with leasing land from a thai if you get the lease for life.For this persons question they should do it in the sons name.Then he can have control of the house and land after his parents dont need it anymore.He dont realy need a lawer either if he have someone that speak both languages and can transelate for him.Ofcourse he need to trust the person also.Sorry to say it should not be a girlfriend or wife that transelates.Then after the lease is made and before any money have changed hands.Go to a few independet lawers and ask them if the papers look okey.Thats what I did and I feel better with that lease in my safe ,then a 5 year rent agreement.Dont forget to register and pay tax of the lease at the land-office.Othervice the lease is not registered or legal.

I think the estate agents on the Rainbow Bridge,Bifröst in Asgard have been telling you some tall stories my friend!

Edited October 9, 2016 by Mekong Thunder
add stuff...

[Puwa]

With all respect, please do remember that there are entirely dishonest people-- landowners, officials, lawyers, judges et et al-- who will present themselves to "help" you at the first opportunity. You won't know until its too late, and legal recourse is a distant dream.

[jak2002003]

I rent 'my' land and have build a house on it.  I have had no problems with this method.. with all the correct paperwork.  But I would never do it again.

 

Renting is the best option... you can rent beautiful houses out in the countryside as very reasonable rates... and in the end if you get bad neighbours (like I have now) you can just up and move out and are not trapped for years trying to sell your house in this bad financial and political times. 

 

 

[johnmcedinghburg]

Please check your mail I send you an message

[Gary A]

When I first retired here, I researched all my options.  The 30 year lease is pretty solid. Any lawyer trying to set  up a company or a 30 + 30+ 30 is obviously bent. I decided against the 30 year lease because I eventually planned to get married. At the end of the lease, I would likely be dead and gone and my future wife would have nothing. I ended up buying a condo in my own name. I still have the condo but live in my wife's house. the house and other properties that I have bought and paid for are in my wife's name. Neat and simple, those properties belong to her. After ten years she will probably keep me but if she doesn't. the condo is in my name and was purchased before we were married. I would still have a roof over my head and certainly won't miss any meals. The properties I have bought for her are hers. After ten years of putting up with me, she deserves them.

[nakhe]

I have convinced them to not buy property and rent for 1 year (for now). Hopefully after renting for a year they will realise that it's really not all too bad to rent, especially in a country with such dodgy land laws!

[Gringogazzer]

Not so much dodgy...just tailored for sale between Thai's. There's no market outside that as it's illegal.
Leasing, is just that, leasing & there's no solid laws regarding leasehold.
I lease. Have I had a problem, no. Could that change, yes.

[CMX]

Of course, there are competing advantages to a condo versus a house.  My own experience is that even including staff to care for property or clean, a house is a greater value than a condo.

 

However, yes, transportation in particular is a factor.  Neighbors too.  But I like roosters in the morning.

[Rancid]

Don't really see the problem with leasing land and building a house, it is secure under Thai law. The main issue people have is that the house will revert to the land owner after 30 years rather than be inheritable.

 

Perhaps should consider that a 30 year lease actually works out cheaper than renting for 30 years, and secondly what will a condo be worth in 30 years under Thai management?