Expats warned of illegal home crackdown in Thailand

Expats warned of illegal home crackdown in Thailand – Telegraph, July 20, 2012
…To get around these restrictions, some have entered into complicated structures whereby a company is set up to purchase the land. A Thai national holds the majority of shares in that company, but in reality may have no financial interest in the company and may own it on behalf of the foreign buyer.
It is these such “nominee ownership” arrangements that the government now wants to crack down on, and Charoenpanij has also proposed a reward – of 20 per cent of the land’s value when sold – for those providing information about illegal ownership. His plans also include penalties for lawyers or consultants who advise foreign buyers on nominee structures.

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One Response to Expats warned of illegal home crackdown in Thailand

  1. Anonymous says:

    I have normally the utmost respect for Thai legal Professionals and for Mr. Siracha Charoenpanij who is a respected legal mind but if what Thai visa has reported is true (the news has not yet appeared in the main English newspaper of Thailand) then the question need to be asked.

    Apparently Khun Siracha is working on a new law which content would be as follows:

    Foreigner owning land property through nominees scheme would be deported
    Their property would be auctioned and 20% of the market price (not the selling price which means it would be more than 20%) of this land would be given to the person who had provided information about the nominee ownership.
    Lawyers and consultants assisting foreigner to purchase land through nominees would face punishment as well
    Now Khun siracha forgot that:
    Yes foreigners have been violating Thai law and purchasing land through nominees for 30 years now.

    Most transactions have been done by foreigner who want their piece of land in paradise and often invested half of their life saving in Thailand to do so and are living in Thailand and spending a lot of money there as retiree.

    Those people are not criminal but people that were intended in living the dream.

    How would it look if Thailand is going after the life saving of European and US retirees?

    There are other options that could permit to peacefully as the one I have been suggesting for years and which I summarize below.
    A smart solution would be to find a solution that offers to all the foreign investors that have circumvented Thai Laws and purchased land through a Thai company with Thai shareholders that may deemed nominees a way out without sanctions and

    Return the land into Thai hands; and
    Preserve the rights of the foreign owners; and
    Preserve Thailand reputation overseas
    I thought a lot about it and the only solution that would permit to fulfill those three objectives would be a solution I already presented roughly in a previous post. I added a few features to my first draft. I’m aware that my solution is far from perfect but I don’t see any other that could permit to fulfill the three objectives above.

    The law is changed to extend the lease duration and right of superficies to 60 or 90 years; and
    The government issue a bill that offers amnesty to foreign buyers that have used “companies that own land with Thai Shareholders that may be deemed nominees” or “Thai individuals” to purchase land that would be subjected to the following conditions:
    (1) The foreign buyers must notify the land department within 12 months after the enactment of the bill, and

    (2) The foreign buyers must either:

    (i) Sell the property within 3 years to a Thai Buyer, or

    (ii) Surrender and transfer the ownership of land title deed to the Government that would for good consideration grants to the foreign buyer either

    If the company or Thai individual own the land and the house
    – A 6o year’s lease agreement on the land and house + a renewal option of 30 year.

    – A 90 years lease agreement of the land and house with no renewal option.

    If the company or Thai individual only own the land and the foreigner owns the rights on the house

    – A 6o year’s lease agreement on the land + a renewal option of 30 year.

    – A 90 years lease agreement of the land with no renewal option.

    – The foreign investor would remain the owner of the house for the duration of the 60 years lease + period of renewal or for the 90 years lease duration.

    (3) During the lease period (60 years + 30 or 90 years) the foreign investor could

    (i) Assign the lease and sale the house to another foreign investor but the lease would be assigned and the ownership of the house would be transferred to the third party foreign buyer only for the remaining duration of the lease originally granted by the Government to the foreign investor

    (ii) Sell the lease and house to a Thai Buyer

    (4) The foreign buyer would pay the cost of registration of the lease agreement and be liable of any tax applicable on the property (land & house tax or the new property tax)

    (5) At the time when reselling the property the foreign investors would pay the normal taxes due in case of resale of a property

    (6) If at the end of the entire lease period the foreign investors was not able to sell the property said property would be auctioned. The foreign investor would receive the auction payment after deduction of taxes applicable and auction fees.

    I did not provide for fine or punishment into my proposed solution because as I was explaining in my post “Buying Land: The Nominees Witch Hunt (3): The Scapegoat” the responsibility for what happened was collective and to punish only the foreign investor would be unfair.

    Furthermore the objective of the solution is to have as many of the foreign investors that have used “companies that own land with Thai Shareholders that may be deemed nominees” or “Thai individuals” to purchase land to willingly participate. Adding sanctions would simply dissuade many people to participate.

    Also exchanging a quasi freehold ownership against leasehold is punishment enough.

    Finally, the main purpose is the restoration of a situation where residential land would be back into Thai hands.

    As I was saying above, I’m totally aware that there are still flaws in what I’m proposing above. But the point is that this issue has to be solved and that we have to start from somewhere and the other alternative viable that is to say allow foreign residential ownership is not an option that may become available for years.

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