My wife owns a plot of land which we plan to develope as our home, my wife has agreed that the best way to deal with title and security for me is for me to take out a lease on the land.
Has anyone actually done this and if so what was the procedure.
We'll probably use a BKK law firm to advise and do the checking.
Leasing Land - How's it done?
Moderators: MGV12, BKKBILL, Sometimewoodworker
Re: Leasing Land - How's it done?
Itchy wrote:My wife owns a plot of land which we plan to develope as our home, my wife has agreed that the best way to deal with title and security for me is for me to take out a lease on the land.
Has anyone actually done this and if so what was the procedure.
We'll probably use a BKK law firm to advise and do the checking.
If you make it on the right way:
Make a contract between you and your wife about Credit. Your wife no need to pay the credit back but you will get the right for use that land from her. Important: Your right to use her land u should but it in land paper. This kind of contract you can use for 30 years maximum. And you have to do it by law....it mean you have to use a lawyer.
Greetings
take the right lawyer
Many lawyers / consultants will try to push you to take the "company" road. Do not listen to them, this is not only the most expensive way to "own" land, but also just temporarily tolerated. After a few years, the problems start. If the accounting is not very well done, then problems with the authorities can come quickly. Consultants recommending foreigners to create an otherwise inactive company which they control and which owns the land do so either out of lack of better knowledge or because they have a hidden agenda, which usually is enjoying the higher fees to implement this company and then to manage it, including the monthly accounting fees, annual auditing fees, etc.
Leasing is a better and much less expensive way, but it alone has limits. On one side the maximum time of 30 years, but that's not all.
A solution is to combine it with a credit, as Kondee did point out, registered at the land office.
I can recommend the lawyer / accounting / consulting company XXXXXX company , which has offices in Bangkok, xxxxxxx, xxxxxx and xxxxxxx - address see at their lousy website http://www.xxxxxxxxxxxxxx .
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( edited, company name deleted. Reason: Overall the information this company was giving turned out to be mostly incorrect, and aimed at pushing you in a dependency situation where they can profit from you. I apologize if anyone has entered business relation with that company based on my recommendation here. If you have done so, I recommend to cancel all asap, and look for a better lawyer / accountant, before it is too late. You have been warned.
Leasing is a better and much less expensive way, but it alone has limits. On one side the maximum time of 30 years, but that's not all.
A solution is to combine it with a credit, as Kondee did point out, registered at the land office.
I can recommend the lawyer / accounting / consulting company XXXXXX company , which has offices in Bangkok, xxxxxxx, xxxxxx and xxxxxxx - address see at their lousy website http://www.xxxxxxxxxxxxxx .
========================
( edited, company name deleted. Reason: Overall the information this company was giving turned out to be mostly incorrect, and aimed at pushing you in a dependency situation where they can profit from you. I apologize if anyone has entered business relation with that company based on my recommendation here. If you have done so, I recommend to cancel all asap, and look for a better lawyer / accountant, before it is too late. You have been warned.
Attila already point it out. .....
Basicly nobody who is Farang can own land in thailand ...no matter which way he want to go (expection: He can own maximum 1 rai but you need to pay many many millions thai bath....it?s a new law).
So no matter what kind of contract you will do: The rent one.....or the credit one. There is a limit of 30 Years. After 30 years you need to set it new. And by the way....no any from this ways are really sure. Because never forget...a farang don?t have much Rights there in Thailand. This land always will own by Farangs wife or any thai people else.
Yes vivami it seems like they are serious. I also know about them.
Basicly nobody who is Farang can own land in thailand ...no matter which way he want to go (expection: He can own maximum 1 rai but you need to pay many many millions thai bath....it?s a new law).
So no matter what kind of contract you will do: The rent one.....or the credit one. There is a limit of 30 Years. After 30 years you need to set it new. And by the way....no any from this ways are really sure. Because never forget...a farang don?t have much Rights there in Thailand. This land always will own by Farangs wife or any thai people else.
Yes vivami it seems like they are serious. I also know about them.
There are two sides to the company argument. I agree with a lot of the downsides pointed out, ie. cost/hassle. The inactive company argument is kind of a red herring, but companies do need to be set up properly. For example, if you are living in a house owned by a company, are you paying 'rent'? You need a rental contract and the company needs to be paying income on the rent.Many lawyers / consultants will try to push you to take the "company" road.
Some situations merit going the company route and some don't.
One side benefit of company ownership of an real estate asset is that when the property is transferred it doesn't need to go through the land office and no transfer taxes need to be paid.
Exactly. It has to be set up 100% correct, with a 100% correct accounting, and all taxes files and paid etc.dozer wrote:...Many lawyers / consultants will try to push you to take the "company" road.
The inactive company argument is kind of a red herring, but companies do need to be set up properly. For example, if you are living in a house owned by a company, are you paying 'rent'? You need a rental contract and the company needs to be paying income on the rent.
...
Companies can of course be in the business of owning and renting out land. However these companies with a farang shareholder are looked at very closely, and incomplete accounting or taxes are used as an indication of a setup to bypass the Thai law of a farang not being able to own land.
Such a close examination does not happen when you create the company. That's all easy.
But it can be expected after some years of existence of the company, especially if there is no profit shown in accounting, or the accounting is not done correctly (which is the case too often) or in case such a company gets sold.
Most companies set up for this purpose have no profit or an incomplete accounting, or both, which puts the farang shareholder at the mercy of the ones examining the company sooner or later. And getting tolerated today is no guarantee for getting tolerated tomorrow.
On the other side I fully agree with you, dozer, if there is a real business around owning and renting or selling land, a company as owner can be a good and cost effective solution. (just make sure you have good accountants
)The tax office is in the business of generating tax revenue. The fear a lot of people have is that they will get called in and there company will be invalidated and whamo they are scr**wed. It isn't quite this severe. The worst case is the tax office tries to get money out of you to rectify things done not correctly.
I would agree in probably many cases it is too much of a hassle for house ownership, but there are some real benefits, so my bottom line point is this: you shouldn't rule it out of hand because you're worried that a company formed for this purpose isn't legitimate.
I don't think they get into this. They are looking at is the business operating like a legit company, ie. if there is a house owned are the company directors living in the house free, or is there a lease that they are paying? Looking at this makes sense for the tax office, since a the income from a lease gets taxed even if the company has a net loss. (special tax).Thai law of a farang not being able to own land.
I would agree in probably many cases it is too much of a hassle for house ownership, but there are some real benefits, so my bottom line point is this: you shouldn't rule it out of hand because you're worried that a company formed for this purpose isn't legitimate.
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johnleepbs
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- Joined: Sat Oct 29, 2005 8:04 pm
Re: Leasing Land - How's it done?
Don't lease the land or set up a company or any other such dodgy scheme.Itchy wrote:My wife owns a plot of land which we plan to develope as our home, my wife has agreed that the best way to deal with title and security for me is for me to take out a lease on the land.
Has anyone actually done this and if so what was the procedure.
We'll probably use a BKK law firm to advise and do the checking.
Get a "superficies". This allows you to have control of the land and and all buildings on it, and lasts for the rest of your natural life (not just 30 years).
The land still belongs to your wife, but you have absolute control. I don't want to spell doom, but this also means if you separate you can decide who lives there, her or you. On your death the superficies expires and the land ( which, of course, belongs to her) reverts to her control.
On a brighter note, a back to back will giving her the house and its contents, and in her case leaving the land to whoever she chooses is a wise addition. The superfices would still be in force in your case. If she leaves it to you you have a short period in which to sell it (1 or 2 years, I cannot remember, because you are farang, or ownership reverts to the state (as I recall), so thats not a wise move; ensure she leaves it to a Thai National)
It's 100% legal, involves a competant lawyers fee and a very small fee at the local land registry. It is recorded on the land registry papers, and in case anybody doubts the legality of this, the land office officials are instructed to inform the lady concerned of the implications of what she is signing...and they do.
It was originally intended for things like rubber plantations etc, but is fine for houses too. I recently registered such an agreement at the land office in Udonthani, it takes about 2 hours there after passing through 3 sections of rubber stamping and counter signing...
I have an example of the agreement I can upload (deleting the personal sections of course) in English. You need a Thai legalise version for the land office of course (my English version is competently translated, but I would not want to risk a translation back to Thai), hence the lawyer. It will need 2 witnesses, not family members.Why everyone does not do this, instead of being sucked by fee seeking lawyer/accountants into the dodgy company route (which the Thais seem likely to outlaw) I am not sure.
Of course if you are 75+ a lease would be equally secure......
.Re: Leasing Land - How's it done?
My brother's house was recently completed, unfortunately a year later then stated but thats another story! So he could not put the land in a company name due to the new law change, so he put the land in my wifes name on a 30 year lease. we didn't use a lawyer the land office in pattaya done all the paper work for us for a one of fee of 13000b, and his name is on the chanote as the lesser of the land with my wife, my brother and the land office all have copies of the lease, basically if you use a lawyer he will charge you a fee to go and do it for you.Itchy wrote:My wife owns a plot of land which we plan to develope as our home, my wife has agreeond that the best way to deal with title and security for me is for me to take out a lease on the land.
Has anyone actually done this and if so what was the procedure.
We'll probably use a BKK law firm to advise and do the checking.
I've read somewhere that as part of the lease the wife receives (for tax purposes) some rent on the lease (of course she probably doesn't actually receive anything if you are married). I also understand she is thus liable for income tax on this rent. Does anyone know about this? How would this rent be calculated? Is there a minimum?
The agreed amount for leasing the land was 1000b per year, i know your thinking this sounds cheap, but it is an average price for thais leasing land. My wifes brother leases 3 rai for 1000b a year. Al the information is registered with the land office, ie when the "rent" for the land will be paid, monthly or yearly. As for the paying tax side of it i wouldn't like to comment, as i have no idea about that side of it. But if you were leasing the land for 1000b per th year the tax, i imagine would be very minimal.akalat wrote:I've read somewhere that as part of the lease the wife receives (for tax purposes) some rent on the lease (of course she probably doesn't actually receive anything if you are married). I also understand she is thus liable for income tax on this rent. Does anyone know about this? How would this rent be calculated? Is there a minimum?