Thanks in advance to any users who take the time to answer this query and apologies if the explanation goes on a bit.
I am in the process of selling a house in Thailand. The land is in year 5 of a 30 year lease from a management company. In year two, I had a house built on the land. Late last year I decided to sell the house as I can only get over to Thailand once a year for two weeks. I have found a buyer who has paid a deposit to my lawyer. The buyer wants to transfer the land into a company and his lawyer has created a company for him and they are just waiting for the existing management company to complete the paperwork at the land office. My lawyer agreed a fee (Extortionate amount of money for a few signatures) with the management company for their help completing the paperwork. All was fine up to this point.
The difficulty now is that the management company that owns the land is not playing ball. They have some financial issues at the moment including pending court cases and they are looking for taxes to be paid on the increase in land value from the time I bought the land to the selling date. They will not transfer the land from a lease to a company until this is paid. I have agreed to pay this even though I am fairly certain that they will pocket the money and none of it will reach the land office.
However, now they are looking for a large percentage of the sale price of the house as well which has nothing to do with them. My lawyer has said they are being completely ridiculous as this is illegal but they will not move from their stance that they want the money. I am stuck between a rock and a hard place with this unscrupulous company as I cannot sell the house without their co-operation.
I realise that this is complex but has anyone got any thoughts on my dilemma?
Many thanks.
Ghostbuster.
Taxes and fees due on the sale of a house
Moderators: MGV12, BKKBILL, Sometimewoodworker
Strange setup....who owns/runs the management company ?
Basically if they are the owners of the title and you simply lease, there is probably not much in the eyes of the law you can do.
But, best thing would be to put this post up on ThaiVisa as they have several lawyers over there which cost advice and I am sure you would get more acrurate legal advice there than here.
There is always the broken leg path for 5k baht, but we do not support, condone or agree with the use of violance unless it gets the job done that cannot be otherwise done.
Basically if they are the owners of the title and you simply lease, there is probably not much in the eyes of the law you can do.
But, best thing would be to put this post up on ThaiVisa as they have several lawyers over there which cost advice and I am sure you would get more acrurate legal advice there than here.
There is always the broken leg path for 5k baht, but we do not support, condone or agree with the use of violance unless it gets the job done that cannot be otherwise done.
Strange? I disagree. This is a perfectly legal scenario in full accordance with Thai law, and as such often used.Nawty wrote:Strange setup....who owns/runs the management company ?
However this seems to be a louse implementations of this legal model. The procedure in case of a lessee / houseowner selling should be clearly described and regulated in the contracts, and from what I read here this seems to be not the case.
This is an opinion which I do not share, not at all. In my opinion violence is not a means to get what you otherwise would not get ... too many wars have been started with such a mindset, and the current discussions we see in the U.S. now about how much torture is OK and when it can and should be used are another outflow of such a mindset.Nawty wrote:There is always the broken leg path for 5k baht, but we do not support, condone or agree with the use of violance unless it gets the job done that cannot be otherwise done.
I fully accept and agree with the way it is defined in many constitutions and laws which say clearly that violence is only accepted (without punishment) if it happens in (justified) self defense.
I demand any reader to not interprete or understand the post above as a proposal or an acceptance of violence in any way by the coolthaihouse community, or even as the coolthaihouse community opinion, but just as an expression of opinion of the author of that post.
( I'm going now to listen to Joe Cocker's "Thank god I'm a civilized man" for a while )Re: Taxes and fees due on the sale of a house
Your lawyer should be able to calculate these taxes exactly as they have to be paid when the land is sold now. He should be also able to assist when the land ownership is transferred at the land office and take over the tax paying part there directly. This way the company would never get that tax money in their hands at all.Ghostbuster wrote: ... and they are looking for taxes to be paid on the increase in land value from the time I bought the land to the selling date. They will not transfer the land from a lease to a company until this is paid. I have agreed to pay this even though I am fairly certain that they will pocket the money and none of it will reach the land office.
There are taxes to be paid when land ownership is transferred, and so far it is quite OK that the management company asks you to pay them. These taxes would not have to be paid (now) if you would not want to sell the property now.
They must have a weak point somewhere. Somewhere where they have messed up and are in conflict with the law. Find that, or have your lawyer find that, and then propose a dealGhostbuster wrote: However, now they are looking for a large percentage of the sale price of the house as well which has nothing to do with them. My lawyer has said they are being completely ridiculous as this is illegal but they will not move from their stance that they want the money. I am stuck between a rock and a hard place with this unscrupulous company as I cannot sell the house without their co-operation.
I realise that this is complex but has anyone got any thoughts on my dilemma?
Atilla, I think you perhaps do not get the aussie sense of humour some times. Never mind though, its an acquired thing.
As for the company paying the tax etc, I think from his post what I read is something different from the transfer taxes.
A company would be liable for 'income' tax on the profits of the sale of a house/land/project etc, so I think they are talking about an amount they would be responsible for re the profit amount. Fair enough also I guess, this seems to be a poorly setup deal between the company and the buyer/lessee.
Also when I said strange setup, I mean strange as in the way it has turned out with or without other documents/agreements in place bewteen the company and the owner/lessee.
I did not mean strange as in 49/51% setup as this I figured was a given legal procedure that everyone knows about.
As for the company paying the tax etc, I think from his post what I read is something different from the transfer taxes.
A company would be liable for 'income' tax on the profits of the sale of a house/land/project etc, so I think they are talking about an amount they would be responsible for re the profit amount. Fair enough also I guess, this seems to be a poorly setup deal between the company and the buyer/lessee.
Also when I said strange setup, I mean strange as in the way it has turned out with or without other documents/agreements in place bewteen the company and the owner/lessee.
I did not mean strange as in 49/51% setup as this I figured was a given legal procedure that everyone knows about.
Nawty wrote:Atilla, I think you perhaps do not get the aussie sense of humour some times. Never mind though, its an acquired thing.
It is irrelevant if I see humour in that statement or not, more relevant is what the average surfer stumbling upon that post might think ... And that's what I tried to work on.
That's what I thought too, after reading it quickly. Then I was not so sure, it could very well be exactly this transfer taxes and what's in the post is what arrived at our Ghostbuster.Nawty wrote: As for the company paying the tax etc, I think from his post what I read is something different from the transfer taxes.
Nawty wrote: A company would be liable for 'income' tax on the profits of the sale of a house/land/project etc, so I think they are talking about an amount they would be responsible for re the profit amount.
And exactly that can be calculated, there are rules and guidelines, and as far as I know at least a part of that is handled at the land office as a part of the transfer taxes.
In communication it is risky to assume too much, better start at the basics and ensure you're really talking about the same thing. I guess our Ghosty himself will explain sooner or later
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Ghostbuster
- Posts: 2
- Joined: Tue Mar 18, 2008 9:27 pm
Thanks to Nawty and Attila for their contributions and advice.
I would appear that violence has been used against this company in the past but this did not have a favorable outcome. This company has bullied a number of its tenants and appears to get clean away with it. I have been told that they have “friends” in the local police station. Therefore I am pretty sure that violence would not get me anywhere with this company so I must use the negotiation route. This is sensitive at the moment as I don’t want to give too much away as the land has not been transferred yet. I don’t want to create a situation where they can put this post together with my house and get the hump so to speak. I will create a new post with the actual names when all is completed.
In relation to the sale of the house and the profit, I am eager to repatriate the funds back to my home country and am selling the house at the cost price so there is no profit at all in the sale. However, the management company are looking for a percentage of the sale price irrespective of the fact that there is no profit being made selling the house. As I mentioned in the original post, I have agreed to pay 30% tax on the profit made by the land to the management company. (Incidentally, it was the management company that came up with the figure of what the land had increased to!)
My lawyer in Thailand is getting nowhere with the lawyer from the management company. Their lawyer has made a mistake telling the management company that they could claim tax on the house sale and is refusing to back down and lose face. (I wonder how many people have died in Thailand because someone was afraid to lose face by telling the truth?)
There are many things in Thailand’s favour and that was why I decided to buy a property here but it would appear that when money is involved, fairness, justice and honour all go out the window.
Just to clarify.
Originally the total agreed cost payable to the management company was an agreed fee for their signature at the land office (€1000 euro). After I agreed this, they then said they wanted 30% land tax based on the profit made selling the land. To progress the sale, I agreed to pay this as well to the management company even though I am 99% certain that they will pocket it. The most recent madness is that they now say they want a large percentage of the house sale price. My lawyer has confirmed this as completely incorrect. If any tax is due, it is payable to the land office. (There is no tax due as the house is being sold at my cost price)
That’s where it is at the moment. Hope that is a bit clearer.
I would appear that violence has been used against this company in the past but this did not have a favorable outcome. This company has bullied a number of its tenants and appears to get clean away with it. I have been told that they have “friends” in the local police station. Therefore I am pretty sure that violence would not get me anywhere with this company so I must use the negotiation route. This is sensitive at the moment as I don’t want to give too much away as the land has not been transferred yet. I don’t want to create a situation where they can put this post together with my house and get the hump so to speak. I will create a new post with the actual names when all is completed.
In relation to the sale of the house and the profit, I am eager to repatriate the funds back to my home country and am selling the house at the cost price so there is no profit at all in the sale. However, the management company are looking for a percentage of the sale price irrespective of the fact that there is no profit being made selling the house. As I mentioned in the original post, I have agreed to pay 30% tax on the profit made by the land to the management company. (Incidentally, it was the management company that came up with the figure of what the land had increased to!)
My lawyer in Thailand is getting nowhere with the lawyer from the management company. Their lawyer has made a mistake telling the management company that they could claim tax on the house sale and is refusing to back down and lose face. (I wonder how many people have died in Thailand because someone was afraid to lose face by telling the truth?)
There are many things in Thailand’s favour and that was why I decided to buy a property here but it would appear that when money is involved, fairness, justice and honour all go out the window.
Just to clarify.
Originally the total agreed cost payable to the management company was an agreed fee for their signature at the land office (€1000 euro). After I agreed this, they then said they wanted 30% land tax based on the profit made selling the land. To progress the sale, I agreed to pay this as well to the management company even though I am 99% certain that they will pocket it. The most recent madness is that they now say they want a large percentage of the house sale price. My lawyer has confirmed this as completely incorrect. If any tax is due, it is payable to the land office. (There is no tax due as the house is being sold at my cost price)
That’s where it is at the moment. Hope that is a bit clearer.
Kind of, but not really.
The only taxes payable at land office are transfer, stamp duty and special business tax if you are liable for this...I think this comes in if you sell under 5 years owner ship...regardless the tfr and sd taxes are only 2.5% combined and the sbt is 3.3 or 3.5% and if liable for sbt you do not pay the stamp duty.
Regardless of all of that, we now have coming into force next month I believe a tax of 0.1% as special encouragement to boost the economy for 1 year, so your tax should be zilch.
If you are sperating the land price and house price and you are saying the land price has gone up and that the house is still the same value, then this is ok and a personal decision between you and the company. But if you are saying the land and house price together is the same as when you bought it and you are paying them 30% of that, then you are losing andt that is a hefty fee to pay crooks.
Things like this really piss you off in this country and you wonder why the cnuts just cannot do the right thing instead of scams and cons at every fcuking corner.
When it is all done and cleared up, make sure you get a vodoo doll sent to them with a spell on it declaring bad luck on their entire company and families in return. They dont like that hokus pokus mumbo jumbo and it will give em the willies for months.
The only taxes payable at land office are transfer, stamp duty and special business tax if you are liable for this...I think this comes in if you sell under 5 years owner ship...regardless the tfr and sd taxes are only 2.5% combined and the sbt is 3.3 or 3.5% and if liable for sbt you do not pay the stamp duty.
Regardless of all of that, we now have coming into force next month I believe a tax of 0.1% as special encouragement to boost the economy for 1 year, so your tax should be zilch.
If you are sperating the land price and house price and you are saying the land price has gone up and that the house is still the same value, then this is ok and a personal decision between you and the company. But if you are saying the land and house price together is the same as when you bought it and you are paying them 30% of that, then you are losing andt that is a hefty fee to pay crooks.
Things like this really piss you off in this country and you wonder why the cnuts just cannot do the right thing instead of scams and cons at every fcuking corner.
When it is all done and cleared up, make sure you get a vodoo doll sent to them with a spell on it declaring bad luck on their entire company and families in return. They dont like that hokus pokus mumbo jumbo and it will give em the willies for months.
Ghostbuster - You have not made any comments at any time on the actual wording of your lease contract. Are we right in assuming that all its clauses are in your favour, and that any sales of anything you build on the leased land are unambiguously treated in that contract?
How is the ownership of the house recorded on the chanote? That can also have an important bearing.
All the lease agreements I have seen are quite clear in what can be done on the land, and who gets what if the land and/or the house is sold.
Moreover, is your contract in good, unambiguous English? Many a lawsuit has been lost by clients not taking the trouble to obtain perfect translations or by relying on friends or family with a knowledge of Thai and English to do their bargaining for them.
Let us also hope, that the agreements you have made to part with a lot of the revenue from the sale of the house, have not been made contractually, in writing, and countersigned by your lawyer.
How is the ownership of the house recorded on the chanote? That can also have an important bearing.
All the lease agreements I have seen are quite clear in what can be done on the land, and who gets what if the land and/or the house is sold.
Moreover, is your contract in good, unambiguous English? Many a lawsuit has been lost by clients not taking the trouble to obtain perfect translations or by relying on friends or family with a knowledge of Thai and English to do their bargaining for them.
Let us also hope, that the agreements you have made to part with a lot of the revenue from the sale of the house, have not been made contractually, in writing, and countersigned by your lawyer.