Leasehold or Freehold

[Sinistralian]

Considering selling our Villa - presently  leasehold. Price and position would suit a farang purchase. Whilst I (British) could change status to freehold as my wife is Thai - would this be any advantage / make it more sellable to a prospective buyer? Any thoughts /advice welcome. 

[bkkcanuck8]

Who is the owner of the land?  Who is the owner of the buildings on the property?  If someone wanted to purchase the property (freehold) and occupy the property then I would think that you would just arrange the owner of the land and the buildings to sell the property rights and you would sell the lease or terminate the lease early to the new owner (which would have to be Thai in that case).  [definitely not an expert though - so take it with a grain of salt]

[munchlet]

1) Who is the owner of the property chanote?

2) How much is left to run on the lease? This affects the value

3) Are there options to renew? These may be worthless depending on who owns the free hold. All the owners of Amanpuri in Phuket had to  pay again to keep their houses because the freehold was sold to another owner before the leases expired and could be renewed, the extensions were deemed unenforceable in court.

4) If the owner of the chanote is in your control, (don't assume that if its in your wife's name it is) then you need to tell the owner you wish to sell and ask for a lease extension to at least 30 years OR, even better if the local land office allows it, register CONSECUTIVE 30 year leases with the land office, which means there is no option to renew. It is automatic, taxes paid up front, simple, easy. a 90 year lease is worth, in realterms, almost as much as a chanote.

5) If the chanote is not in your control, try to get it. A chanote on a piece of land that has a 25 year lase reversion is not worth much. Try to pick it up for a son and register in the name of a company with Thai shareholders (not your wife) and then set up an A share and B share structure. This is becoming more frowned on now, but if you are careful it can work Effectively, you control the B shares that have all the voting rights and therefore the land underscoring the lease. You then sell both the company and the lease.

 

Hope this helps.

[blackcab]

5 hours ago, munchlet said:

...even better if the local land office allows it, register CONSECUTIVE 30 year leases with the land office, which means there is no option to renew. It is automatic, taxes paid up front, simple, easy. a 90 year lease is worth, in realterms, almost as much as a chanote.

 

Sadly, this is impossible. No land office will register any form of residential lease for more than 30 years. It doesn't matter how you structure it, 30 years is the maximum allowable for residential purposes.

 

There has been discussion about changing the maximum lease term to 99 years, and in my opinion it would be a fantastic move for everyone except scheming Thai partners.

 

In fact I think if a foreigner could lease land for 99 years the marriage rate might drop. After all, half of a residential lease isn't worth much if the original price on the contract was low.

[KittenKong]

Yes, legal long leases would appear to entirely solve the house ownership by foreigners problem, whilst still fully protecting Thais from fear of foreign "occupation" which seems to be what they are most worried about. Having done this a proper clampdown on company ownership could be implemented as there would be no real reason for it.

[munchlet]

RE Black Cab's quote that land depts don't register more than 30 years. I can tell you I have seen this done. Very few do, but when you find them, they are gold dust!!!

[bkkcanuck8]

30 minutes ago, munchlet said:

RE Black Cab's quote that land depts don't register more than 30 years. I can tell you I have seen this done. Very few do, but when you find them, they are gold dust!!!

 

If the maximum legal length of any lease and anything over 30 years is not enforceable under law.... then what good would there be in registering more than 30 years -- since push comes to shove.... if challenged the registration would likely be considered moot.

[p_brownstone]

42 minutes ago, munchlet said:

RE Black Cab's quote that land depts don't register more than 30 years. I can tell you I have seen this done. Very few do, but when you find them, they are gold dust!!!

 

Perhaps : ..............

 

That seems OK - until the original Land Department Official who granted this illegal registration retires or is otherwise moved on; and his replacement either realises from looking at his local records that the legal requirements were not followed or some local Thai brought the situation to his attention for some reason (fill in the blanks here).

 

All that then remains to you is the "dust" (definitely no "Gold").

 

Patrick

 

 

 

[blackcab]

6 hours ago, bkkcanuck8 said:

 

If the maximum legal length of any lease and anything over 30 years is not enforceable under law....

 

Just to clarify, it's 30 years maximum for residential and 50 years maximum for commercial and industrial.