Property ownership in Thailand.

Home ownership in Thailand, here is an alternative view often ignored by too many legal advisors. Why?

The issue is that foreigners in Thailand are often scared off by long term registered leases. While this is not the same as true ownership, its not as inferior as some think. That is, when you think about it.

How many people would lease a piece of land for 30 years if the price was right? This would mean a foreigner needs no lawyers, no company, no accountants and no yearly audits. Regardless, he/she, unlike in most developed countries, have no annual real estate taxes to pay.

By law you all you need is your passport, a signature and one trip to the land department. The lease is attached to the land title and so no one can evict you. At the time of the 30 year lease transaction, You can ask for the right of the lease to be transferable to another/third party, of your choice. This home/land may not be pledged in any way, as the lease is registered in the foreigners name on the back of the title deed.

It is a clean straightforward way and after building your house, at least you know it is yours for 3 decades. In fact you have full & legal rights, i.e. no one can evict you. Not the orginal or current land owner, not the Thai law, nor anybody else.
What you save on properly & legally maintaining a Thai company for 30 years will not be inconsiderable, and if instead you invest this is say Thai value stocks, you may be much better off down the 30 year road.

Further 30 year lease options, are possible but may not be enforceable, if the land ownership changes. However, the first 30 years is an absolute guaranteed lock. Surprisingly few foreigners are aware of this simple option and this too often is not mentioned by the legal experts/real estate agents -whom forever seem to push the less stable, legally boardering, alternatives.

In investment finance, you can prove that a bond with say a set & equal coupon payment for 30 years, has barely more value today, called "present value", then an equal perpetual bond with the same coupon payments, but paid forever. Hence a 30 year pre-paid lease, in strict finance as can be proven, is very close to being as good as "forever"! Few seem to know what they are talking about on this 30 year lease option subject here, especially when you consider the cost (and probable illegality -when companies are done for land ownership) of keeping up a Thai company going for 3 decades.

I would say, instead, take your yearly Thai company tax/accounting/auditing savings and invest this (along with yearly dividends) in a group of smaller cap. value Thai stocks (yes in your own foreign name), after 30 years you most probably got enough gains to buy another property! Historically this would have worked very well, and I no doubt will in the future. (Call it your own "sinking fund", besides peace of mind).

To realizse how well one would/could have faired historically by investing in just SET average stocks, instead of accounting fees etc.., just see the below article.

As you see, there are a few good reasons, not the least, its the totally correct and legal one. It might even be the wiser one.

Best Regards,

Paul A. Renaud.
www.thaistocks.com

"Stocks the best bet over past 30 years

"Stocks have proven to be the best-performing investment over the past 30 years, returning 2,900 times the original investment, according to Sethaput Suthiwart-Narueput, vice president of the Stock Exchange of Thailand (SET).

"He said in the latest SET Notes that, by comparison, holdings in bonds, cash, and gold between 1975 and 2005 returned 1,825 per cent, 800 per cent and 150 per cent, respectively. "

The full article can be seen from this link:

http://www.nationmultimedia.com/2006/05/03/business/business_30003041.php

May 3, 2006 05:15 pm (Thai local time)

www.nationmultimedia.com