30 year lease on multiple properties

[machans88]

I have a 30 year lease on the land of the house i live in from my partner, can i buy another house and lease the land off her again for 30 years and then rent out one of the houses to prospective tenants?

[zeichen]

Sounds very shady. Why not just buy some condos and rent them out.  Technically, you need to register and pay taxes on that income. To be honest it doesn't sound like you will make more than 2% Roi on renting out a house that you had built.

[machans88]

the question is can i have multiple houses in my name, i am not building. but buying a discounted already built house, i would put the land in partners name and lease it off her 30 years and own the house to rent out, house was bought for 5million, owner wants out to go home, i can buy for big discount, half price, rents in this gated community of hua hin start at 25000 a month so roi is quite good

Edited January 1, 2017 by machans88

[smutcakes]

11 hours ago, machans88 said:

the question is can i have multiple houses in my name, i am not building. but buying a discounted already built house, i would put the land in partners name and lease it off her 30 years and own the house to rent out, house was bought for 5million, owner wants out to go home, i can buy for big discount, half price, rents in this gated community of hua hin start at 25000 a month so roi is quite good

 

You can lease as many properties as you wish. Technically its illegal for a foreign person to sub lease property, but i don't expect you would ever get caught at such a level. I would maybe have a think about tax implications as well.

[blackcab]

12 hours ago, smutcakes said:

Technically its illegal for a foreign person to sub lease property, but i don't expect you would ever get caught at such a level.

 

Do you know what law is being broken?

[blackcab]

OP No problem at all. You can do this as often as you want.

 

If you're especially bothered then use an agent to sign up the new tenant. The agent can be your partner so no need to actually pay anything to get the job done.

[smutcakes]

5 hours ago, blackcab said:

 

Do you know what law is being broken?

 

Yes, the foreign business act. There is a catch all clause which covers this. 

[blackcab]

3 hours ago, smutcakes said:

 

Yes, the foreign business act. There is a catch all clause which covers this. 

 

I understand what you mean, but in this case the OP wouldn't be trading in land, he would be offering a lease on a house - which is a separate issue to the land. For a lease under 3 years for a house he owns there wouldnt be a problem from the Foreign Business Act. Lack of work permit might cause a problem, but it depends on what the Ministry of Labour deems as being a commercial landlord as opposed to letting out your private property.

 

There is no fixed guidance on this, but to avoid any problems the OP could get a Thai person (his partner) to act as agent and then passively receive the income. In which case he would not be working.

 

I agree that a  non Thai person can't own a business that trades in land, however a non Thai person can trade in land if they work as an agent that is employed by a Thai owned company. In essence you can be an employee who works as an agent for a third party (ie. you can be a real estate agent), but you can't work buying, selling and managing land for yourself.

[smutcakes]

3 hours ago, blackcab said:

 

I understand what you mean, but in this case the OP wouldn't be trading in land, he would be offering a lease on a house - which is a separate issue to the land. For a lease under 3 years for a house he owns there wouldnt be a problem from the Foreign Business Act. Lack of work permit might cause a problem, but it depends on what the Ministry of Labour deems as being a commercial landlord as opposed to letting out your private property.

 

There is no fixed guidance on this, but to avoid any problems the OP could get a Thai person (his partner) to act as agent and then passively receive the income. In which case he would not be working.

 

I agree that a  non Thai person can't own a business that trades in land, however a non Thai person can trade in land if they work as an agent that is employed by a Thai owned company. In essence you can be an employee who works as an agent for a third party (ie. you can be a real estate agent), but you can't work buying, selling and managing land for yourself.

 

In my opinion sub leasing is sub leasing, and it is not permitted under FBA. There are obviously ways to circumvent it, but if the farangs name is on the sub lease agreement i presume it would be illegal.

[blackcab]

28 minutes ago, smutcakes said:

 

In my opinion sub leasing is sub leasing, and it is not permitted under FBA. There are obviously ways to circumvent it, but if the farangs name is on the sub lease agreement i presume it would be illegal.

 

I guess we differ in our opinions. I work for a Thai company and have a work permit that specifically allows me to buy and sell land, and arrange a lease on behalf of a landlord or tenant (amongst other things).

 

In my experience sub leasing a house for under 3 years is not prohibited by the Foreign Business Act. As I said, to be sure the OP could use an agent to handle the transaction, but that's more of a work permit issue than anything else. 

[smutcakes]

1 hour ago, blackcab said:

 

I guess we differ in our opinions. I work for a Thai company and have a work permit that specifically allows me to buy and sell land, and arrange a lease on behalf of a landlord or tenant (amongst other things).

 

In my experience sub leasing a house for under 3 years is not prohibited by the Foreign Business Act. As I said, to be sure the OP could use an agent to handle the transaction, but that's more of a work permit issue than anything else. 

 

For you to organise ok, you have a work permit that permits it, but you are the agent not the Lessor, so of course it is not illegal for you. Whether you are advising a farang to enter an agreement which legally they are not permitted to enter is another matter.

[blackcab]

12 hours ago, smutcakes said:

 

For you to organise ok, you have a work permit that permits it, but you are the agent not the Lessor, so of course it is not illegal for you. Whether you are advising a farang to enter an agreement which legally they are not permitted to enter is another matter.

 

The Foreign Business Act is there to stop non Thai people owning or controlling certain categories of business. One of those categories is the trading of land. I think we agree on that bit.

 

Our difference is that you propose that sub-leasing a house is covered by the FBA, while I propose it is not.

 

If you read the Thai version of the FBA, it is very specific. It says it is prohibited for a non Thai person to own a business that:

 

การคาที่ดิน

 

which is the trading of land. The Act specifies land, not moveable or immovable property such as a house. The Act is very specific in what it covers, and therefore what it doesn't cover.

 

The Thai language is very capable of differentiating between land and a house. If you look at the text on my work permit, it translates that I am permitted to act as an agent to:

 

Buy, Sell, Sell with the Right of Redemption, Arrange a Rental Period or Lease for a Landlord or a Tenant, for:
any Land, House, Condominium or any other Construction whatsoever, and also for:
any other kind of asset fixed to the land including rivers, ponds, trees, minerals (and much more as the list of included items is quite long).

 

You can see that there is a distinction made between land, houses, condos and other buildings. In contrast, in the FBA the only restriction is on land.

 

The FBA has no restriction that concerns a foreigner leasing or sub-leasing a house. If you believe I'm mistaken please explain where in the FBA you believe I have made a mistake.