Is it possible to run an Airbnb business legally in Thailand?

[chatette]

Actually, my understanding is that there is no law banning short-term rental of condo units by their owners in Thailand. 
I expect many Bangkok condos have such a ban written into the juristic-person rules from the outset, however.
Condos rules on such rentals depend on whether the majority of owners have voted at an AGM to ban or approve such rentals, making it a juristic person rule that all owners are bound by under the Condo Act. Such a rule could be rescinded by owners voting in favor of a change at a subsequent AGM.
It's best to find out before buying a condo what the juristic rule regarding short-term rentals is and if there's any prospect of the stance changing.
Owners renting their units short term as a holiday rental are, of course, legally required to declare tax at the usual rate for rental income, which I think is about 12.5%. Most of the holiday rental platforms state this obligation on the hosting side of their websites.

[Steiner]

17 minutes ago, aidon said:

I'm afraid you are absolutely wrong, the Hotel ACT states that any rentals for less than one month contravene the hotel act not that you can rent a condominium in a residential building for more than 30 days.

 

Sorry but that statement doesn't make sense, you are saying you can't rent a condo for more than 30 days? so no 3 month, 6 month or one year rentals?

Maybe it's just me but that sounds bizarre.

 

Quote

And yes we do know because the Administration Arm of the government has helped us pursue people illegally using our condominium to rent both daily and monthly. And it has far reaching effects such as people illegally using the premises being banned from the premises, juristic persons and committee being removed and never allowed to serve on a committee or as a juristic position in ANY building ever again, individual condo owners being charged with using the condo room illegally in the courts, paying taxes as hotels do (back dated for 10 years) and personal income tax and penalties.

 

So it is quite severe if there is evidence to prosecute.

 

Good luck with that, let me know when the 1st person prosecuted with 10 yrs back taxes for renting their room for a month happens.

 

You sound a bit  manic " helped us pursue people illegally using our condominium to rent both daily and monthly"

Nothing on TV then...

 

Anyway it's Thailand, all laws are open to interpenetration and most Thais simply couldn't be bothered, nothing was happening in your case until you got all hall monitor about it. 

[SS1]

1 hour ago, Steiner said:

 

 

That all makes sense. Looks like we are in the same condo :D I was just laughing at that sign earlier. 

[Familyonthemove]

Perhaps it's my UK Government background clouding my vision - but I just don't get the these new internet businesses.  There's safety, fire and tax rules for hotels and safety and personal security rules for taxis ...... but if you do it on-line it's a free-for-all?

 

I get that enforcement in some countries is a bit sketchy, and there's self interest groups protecting their turf in all countries - but surely some form of regulation is needed?

[SS1]

3 minutes ago, Familyonthemove said:

Perhaps it's my UK Government background clouding my vision - but I just don't get the these new internet businesses.  There's safety, fire and tax rules for hotels and safety and personal security rules for taxis ...... but if you do it on-line it's a free-for-all?

 

I get that enforcement in some countries is a bit sketchy, and there's self interest groups protecting their turf in all countries - but surely some form of regulation is needed?

 

That's what the hotels in Finland are also complaining about, that they cannot compete with professional AirBnB businesses because of all those rules and regulations, that make it more expensive for them. But I am a big supporter of these new innovations and systems. AirBnB market is slightly different to hotels, because they are usually regular apartments so you get a kitchen, washing machine etc. but not the services of a hotel. For example in Finland, I'd rather take a normal apartment via AirBnB so I can cook and do laundry myself, while in Thailand with the cheap prices of eating out, services etc. I'd always pick a hotel. I guess in Thailand they are useful for similar purposes, or if you are traveling with a big group of friends and want a big apartment or house for your stay. 

 

Same goes for apps like Uber. In Finland, taxis are ridiculously expensive and most people with a regular income cannot afford to use them. Taxi permits are limited and unflexbile, so on a Saturday night at 4am there is a 50m queue for taxis as there is simply none available! ridiculous, isnt't it? They are very nice cars though, mostly big Mercedez Benz sedans. Uber fills the gap for those who are not looking for something so fancy, just want a cheap and easy ride with a car that may be a bit older, and driver probably from Africa who doesn't speak Finnish. I use Uber every time I'm in Finland, every ride has got a 5 star review from me.  

When it comes to taxation, it's the same as with any individual business or freelancing. Of course if people running these businesses don't pay tax it's wrong, but this is the same with any business not just accomodation and transport. Honest Uber drivers and AirBnB renters pay their taxes accordingly. 

[khunPer]

If it's a foreigner renting out, and the foreigner don't have a Work Permit and correct business set-up (company limited or ?), I believe it's illegal to rent out a condo or room, AirBnb or not – wasn't there some news articles from Phuket about that..?

[aidon]

1 hour ago, Steiner said:

Sorry but that statement doesn't make sense, you are saying you can't rent a condo for more than 30 days? so no 3 month, 6 month or one year rentals?

Maybe it's just me but that sounds bizarre.

 

Actually you should read the rest of the post because it does say ... " And you CANNOT rent condominiums for a month at a time unless the condo is registered as a serviced apartment building."

 

Quote

You sound a bit  manic " helped us pursue people illegally using our condominium to rent both daily and monthly"

Nothing on TV then...

 

And yes our particular condominium has been on TV and yes the prosecutions by the government have been successful and I guess some of us (manic) buy condominiums as just that, not to rent out as hotel rooms or serviced apartments.

 

Note that just 2 days ago the Eastin Tan Hotel .... a condominium ... was shut down by the police in Chiang Mai. Search the internet and you can read the story as to why it was shut down.

 

So, thankfully, the government will help ... 

Edited October 11, 2016 by aidon

[laochef]

Check-out "Condotels". There are several in Phuket...

[eastendanto]

Could you substitute "Condo" for "House" in this thread with regards to legal requirements to letting? I have a house  up North which is empty for most months of the year and was thinking about either renting it out on a weekly/monthly basis possibly longer.

[thailand49]

As noted it isn't just illegal, but majority of by-laws (rules) in Condos, forbid this type of rental if it is being enforced! Sure it is going on in Thailand, but one of the rule of thumb I've learned in Real Estate is " just because you can be a landlord doesn't mean you should "  Most people who are acting as Airbnd have no idea how to be landlord they just want the money and their neighbors who are owner and long renter are the one's suffering.

In San Francisco, where Airbnd started has make a mess of thing driving long term tenants out and causing a raise in rent which is now one if not the highest in the world.  Studios are renting in good area's for $3000 USD a month,  one guy recently in the news was renting his place for 10 years, one day the owner, raised his rent from $1800 a month to $8,000..

[newnative]

Rentals of less than 30 days are in violation of the Thai Hotel Act.  Hotels and condominiums are two completely different things and there are lots of reasons for short term rentals to be illegal in residential condominiums. 

[newnative]

Quote

 

Actually, you are wrong, Chatette.  Short-term rentals of less than a month are against the Thai Hotel Act.  It's illegal.  A condominium cannot pass a condo by-law that allows short term rentals of less than a month because that would be going against Thai law.  Thai law is above condo by-laws.  It would be the same as a condominium passing  a by-law giving permission for its residents to steal from 7-11.  No can do because stealing is illegal.  Some residents at my condo would like the Condo Committee to change the by-laws to allow short-term rentals but legally the condo would be in defiance of Thai law and that's something a Condo Committee shouldn't be doing.  One of the reasons you are seeing all the big signs in condos about short-term rentals being illegal is the condo management showing they are trying to obey the law--even if some of the residents are violating it.

[sead]

Hmm,

Well its legal to rent but not legal to rent out. 

[Henryford]

23 hours ago, williamgeorgeallen said:

think most people would be shy to sign up for 30 days pay for 7 and then cancel for fear of loosing the full 30 days off their credit card.

running accommodation in thailand is more hassle than it is worth. i had 2 guest houses in pattaya and gave up on renting for less than a month at a time. even then the monthly rental was so low it was not worth the hassle so i sold up both buildings and thank god i got my money back out.

 

Agreed i can't imagine why any condo owner would want to rent out his condo for 1 night/1 week. Think of the hassle in getting/returning deposits, checking inventories, cleaning etc.

[chatette]

Actually, Simon Landy, the executive chairman of Colliers International Thailand, wrote a very good column on precisely this subject that was published in the Bangkok Post on Sept. 18 titled  Making room for Airbnb: http://tinyurl.com/jl822lz

Here's an excerpt stating that it's perfectly legal to rent an apartment on a short-term basis as a holiday rental as long as the juristic person rules (the condo rules) allow and they follow other legal requirements:

`The Hotel Act requires properties offering commercial accommodation on a less than monthly basis to have a hotel licence. However, the 2008 ministerial regulation that governs hotel operations specifically excludes properties for temporary accommodation from being considered hotels if a) they have four rooms or less, they can accommodate no more than 20 people at once, c) they create additional income for owners, d) they promote tourism or local culture and e) the authorities have been notified. This exemption is designed to excuse guesthouses and homestays from the requirements of the requirements of the Hotel Act, and can be viewed as generally supportive of Airbnb-style short-term rentals.'

Interpretation of laws and regulations differs from person to person, of course. And the THA, being a powerful and vested lobby, is ensuring its voice is being heard with an interpretation that benefits it rather than what would appear the spirit of the ministerial regulation, and that is that a condo comprises the sum total of all of its co-owners rooms and not just the apartment of a co-owner. This may help explain the divergence of views here on whether short-term renting of your apartment is legal or not. I continue to stand by my view that it is, while respecting anyone else's view that it isn't.  I won't say your wrong, I interprete the rules differently.

Landy's column goes a long way to detail the disruption of the status quo by new listing platforms such as AirBnB not just here but globally. It's worth reading.

[newnative]

Obviously, small guesthouses are completely different from condominiums.  They likely have one owner and are set up and planned for short-term guests.  The owner has chosen to have short-term strangers, with all their needs and problems, move in and out of his guesthouse on a frequent basis.  Condominiums are residences with many owners who make their home there and have not chosen to be hoteliers and don't want to live in a hotel--or a guesthouse, for that matter.  I often hear, "He's a condo investor and wants to rent his condo daily."  ALL condo owners are 'investors' in their units and want to protect their investment.  Some of the condo owners, usually a noisy minority,  would like to rent their units on a daily or weekly basis but that is against Thai law--and usually the condo by-laws.  They should be happy they can rent for periods of less than a year--many places require 1 year rental contracts.  

[blackcab]

On 11/10/2016 at 10:43 AM, AlQaholic said:

There is a limited exception to this. A license is not required if:

1) the said place has less than five rooms; and

2) cannot accommodate over 20 guests at a time; and

3) the income being earned for such is merely “additional income”.

However, even in this case the owner must report such accommodation activity to the relevant local authorities.

 

 

1, 2 and 3 do not override each other. They are separate and failing any one clause is a breach.

[blackcab]

On 11/10/2016 at 1:18 PM, aidon said:

A Condominium is strictly a residential building...

 

That's not actually true. I know of plenty of buildings registered under the Condominium Act where the entire building (some of which are 28 floors) are completely occupied by commercial businesses. There is not one residence in the building.

[aidon]

12 hours ago, blackcab said:

 

That's not actually true. I know of plenty of buildings registered under the Condominium Act where the entire building (some of which are 28 floors) are completely occupied by commercial businesses. There is not one residence in the building.

 

Of course that is possible if 100% of the condo owners approve the change of purpose (must be 100%) and it fits the local zoning regulations. It is not possible to build a commercial building using a Condominium Build permit. And all condo buildings tend to have at least 1 commercial room as well as residential rooms but they are, unlike commercial buildings, limited in purpose by the build permit.

 

It is also possible to change a Condominium into a "condotel" with a hotel license if, and only if, 100% of the owners approve the change ... as it is also possible to change the building into a serviced apartment building again if 100% of the owners approve the change.

 

In this thread the question was asked about running a AirBNB type business and the thing is that it is possible to rent on daily basis if you are a Hotel, CondoTel, private house or there are other limitations based on the number of rooms and how many guests can be accommodated in the building.  As with everything it has to be legal, taxes need to be paid and guests reported to the relevant authorities .... but, you cannot do it in Condominiums. 

[blackcab]

41 minutes ago, aidon said:

It is not possible to build a commercial building using a Condominium Build permit.

 

It is. It happens frequently and has been happening since the inception of the Condominium Act.

[seedy]

Derogatory and Flaming posts removed. Post in a polite, respectful manner or be sanctioned.

[blackcab]

On 11/10/2016 at 5:23 PM, eastendanto said:

Could you substitute "Condo" for "House" in this thread with regards to legal requirements to letting? I have a house  up North which is empty for most months of the year and was thinking about either renting it out on a weekly/monthly basis possibly longer.

 

The key criteria are:

 

30 days

4 lettable rooms (bedrooms) or less

20 people or less

 

So if your house is let for over 30 days, no problem. If your house is let under 30 days and it has 4 bedrooms or less, no problem. If the total number of guests is less than 20, no problem.

 

Something like 8 bedrooms, 23 people and a 2 week stay puts you firmly into hotel territory, which makes sense really.

 

The same restrictions apply regarding a work permit: If you are passive and receive the income, no problem. Just don't go and cut the grass while you have paying guests. 

[eastendanto]

On 16/10/2016 at 8:28 AM, blackcab said:

 

The key criteria are:

 

30 days

4 lettable rooms (bedrooms) or less

20 people or less

 

So if your house is let for over 30 days, no problem. If your house is let under 30 days and it has 4 bedrooms or less, no problem. If the total number of guests is less than 20, no problem.

 

Something like 8 bedrooms, 23 people and a 2 week stay puts you firmly into hotel territory, which makes sense really.

 

The same restrictions apply regarding a work permit: If you are passive and receive the income, no problem. Just don't go and cut the grass while you have paying guests. 

 

Cheers Blackcab..... much appreciated...

[Asiantravel]

well in New York New York it's even illegal to advertise your property         

 

Quote

 

 

On Friday afternoon, New York state Governor Andrew Cuomo signed a bill making it illegal to advertise your home for short-term rent on websites like Airbnb.

The law specifically targets New York City homeowners in apartment buildings who advertise their properties, or even just a spare room in their homes, to rent for less than 30 days at a time.

It’s important to note that New York already passed a law a few years ago making it illegal to rent your home out to short-term tenants.

This new law makes it illegal to ADVERTISE… which is basically pre-crime

 

 

https://www.sovereignman.com/trends/pre-crime-returns-to-america-with-new-airbnb-law-20408/

 

 

 

[newnative]

The NY law makes it illegal to advertise an illegal activity--in this case short-term rentals.  Nothing wrong with that.  I, for one, am applauding.

[Asiantravel]

2 hours ago, newnative said:

The NY law makes it illegal to advertise an illegal activity--in this case short-term rentals.  Nothing wrong with that.  I, for one, am applauding.

 

 

why do  think its a good thing that it's illegal for people living in New York to rent out their properties short term?

[camble]

Maybe because it's taking much needed affordable housing off the market and ruining communities by bringing in transients?

[newnative]

It's a good thing because short-term rentals are for hotels.  Hotels are hotels and condominiums are condominiums. They're two completely different things.  One is geared and equipped to handle large numbers of transient, traveling strangers, with all their varied wants and needs,  checking in and out frequently, and often behaving badly and not wanting to follow any rules because they are likely on holiday and want to party like it's 1999.  Condominiums are homes and their residents want to live in a residential environment.  They bought to live in a home, not a hotel.  They don't want strangers moving in and out next door every day or two. Like it or not, renters do not care for a property like an owner does and I know in America some mortgage lenders will not lend money for a condominium mortgage loan if a condo complex has more than a certain percentage of renters--and I'm speaking of long-term renters on one year contracts.  Short-term--which is illegal for most condos--would be viewed even more negatively.  Why would the mortgage companies have a rule like that?  Very simple.  They're lending money and very prudently protecting their investment.  Condo owners want to protect their investment, too, and that is why the majority of them are opposed to short-term rentals.  The laws that prohibit short-term rentals are there to protect the condo occupants and were put in place because of the clear differences between hotel transient short-stay guests and residential condo occupants.  I think the current crackdown against short-term condo rentals in Thailand, and probably crackdowns other places as well,  has more to do with upset condo owners than it does with upset hotel owners. 

[Asiantravel]

10 hours ago, newnative said:

It's a good thing because short-term rentals are for hotels.  Hotels are hotels and condominiums are condominiums. They're two completely different things.  One is geared and equipped to handle large numbers of transient, traveling strangers, with all their varied wants and needs,  checking in and out frequently, and often behaving badly and not wanting to follow any rules because they are likely on holiday and want to party like it's 1999.  Condominiums are homes and their residents want to live in a residential environment.  They bought to live in a home, not a hotel.  They don't want strangers moving in and out next door every day or two. Like it or not, renters do not care for a property like an owner does and I know in America some mortgage lenders will not lend money for a condominium mortgage loan if a condo complex has more than a certain percentage of renters--and I'm speaking of long-term renters on one year contracts.  Short-term--which is illegal for most condos--would be viewed even more negatively.  Why would the mortgage companies have a rule like that?  Very simple.  They're lending money and very prudently protecting their investment.  Condo owners want to protect their investment, too, and that is why the majority of them are opposed to short-term rentals.  The laws that prohibit short-term rentals are there to protect the condo occupants and were put in place because of the clear differences between hotel transient short-stay guests and residential condo occupants.  I think the current crackdown against short-term condo rentals in Thailand, and probably crackdowns other places as well,  has more to do with upset condo owners than it does with upset hotel owners. 

 

" renters do not care for a property like an owner  "

 

but shouldn't that decision be made by the owner of the individual condominium?

It seems to me the resistance   to this is coming from hotel owners and owners of condominiums in the same building in which  case maybe we will now see a dramatic reduction in condominium investment? Because where is the incentive to buy a condominium ( particularly in a deflationary economic environment )when on top of that you don't even have the freedom  to earn an income from it whichever way you are able to?

it just seems ironical to me that both in Moscow and St Petersburg for many years there has been a flourishing business renting out apartments that the government there doesn't seem to mind in renting out apartments short-term. I even rented an apartment in Havana Cuba although there was a restriction that the owner has to live nearby the rented out apartment.

[Peterw42]

OP,

The sign in the foyer in my condo building says, "short term rental is illegal under the Hotel act, the Immigration act and the Condominium act, also the Bylaws of the condo block".

 

Aside from that, think about the impact it has on people who actually live in the complex. I see short term renters every day, looking for hotel reception at 2am, asking the security staff where is reception, complaining at the condo office that the remote for the TV needs batteries, leaving empty beer bottles at the pool for the hotel staff to clean up. The best one is when they try and order drinks off the cleaner/gardeners. A lot of these people book on airBnB, agoda, booking.com "AND" they think they are staying at a hotel. They get quiet put out when security, the condo office, the cleaner, explains that this is a residential block. We all pay fees to clean, maintain and repair our common areas, lifts, swimming pool, gardens etc. We also pay for security etc. We dont pay fees so you can run a hotel.

 

Have you ever run a short term accommodation business anywhere ? It involves a lot. You need to meet and give keys in the middle of the night, have the room cleaned and maintained after every stay, provide 24 hr contact and assistance (they will call you at 3am if the wifi goes off or the tv remote needs batteries). Deal with people who will trash your condo, party all night. 

 

Yes its possible, yes its illegal and yes it greatly impacts the people who own and "live" in the complex.