New law, negative effect?

[malcolminthemiddle]

Happy to debate, but no time at the moment.

Can any one post a chronology of MIRAS?

[tuktukmike]

Thanks Jim, it is indeed rare.

There is a very very good reason i know about this situation.

Myself and the wife were Registered financial advisors with Commercial Union at that time, if people remember most mortgages were Endowment as this was the way forward people were told.

As it turns out many of our friends ended up with problems as the endowments in many cases would not cover the Mortgage. Sister in law included.

Single MIRAS was continued for a short time and then also abolished.

As you say Jim and we well remember so many couples rushed into the property market before the deadline for Double Miras, this of course pushed up prices even higher.

Mike.

[tuktukmike]

I finally recognised that I was probably too arrogant and cynical to remain safely within the employed class (I was fast approaching the stage when no sane employer would want me)! After a spell at organising the distribution of the early editions of Miss London (a free sheet), offers from other publishers gave me the opportunity to adopt the entrepreneurial life. Thereafter I enjoyed a certain amount of financial success - far greater incomes than I'd ever known as an employee. However, the distribution business folded after some years due to losing the majority of free sheet contracts due to economic conditions of the time. After a spell in insurance again, I eventually set up my own office in Newmarket as an Independant Financial Adviser, specialzing in pensions and investments. I enjoyed four very successful years until, in March 1989, a certain Chancellor of the Exchequer almost bankrupted half the nation by giving his famous advance warning of his intention to abolish joint tax relief on mortagages for unmarried couples within the next four months. Due to the consequent rush of unmarried couples to 'buy now while stocks last', so to speak, this Double MIRAS' budget (as it became known) was the sole reason for house prices doubling over the next twelve months, only to fall (for the first time in living memory) to two thirds their original value a year later. Within three years, half the homeowners in Britain (including myself), found themselves in negative equity. I then joined many of my clients in coming near to bankruptcy until, after three years of non-profit, I was glad to hand over what was left to a firm of accountants, and - not so gladly - the family home to the bank.
Since then, thanks to my stoic wife's unstinting support as a teacher, I've done little but indulge myself doing the things I love best, and have never been happier. But somehow, I still can't bring myself to thank Nigel Lawson for my present state of bliss.

Hope this clears things up for you Malcolm.

This article was from NTLworld.

Apoligy accepted.

[Beguine]

[quote="malcolminthemiddle"]Burger wrote

You wrote this yesterday:

[quote]The project land is never subdivided into individual house plots but remains whole whether that is made up of one or more Chanotes.
The Chanotes are in the name of the "Company" and remain an infinite asset of the company. At completion, a buyer, will be allocated the proportional number of shares within the company allocated to the house he is buying.
In short one project, one company, multiple share holders.
To sell your house, sell your shares. [/quote]


[quote]So if you are saying no sub-dividing, therefore no seperate land papers (chanotes), then why are farangs going to land offices to transfer land papers into their wives/companies name ??[/quote]

In the scenario I described they wouldn't.

Burger wrote

[quote]If you build an extension and a swimming pool and your house is now worth a million Baht more, do you get more shares ??
I don't understand.[/quote]

The answer is no, the number of shares reamin fixed but their value fluctuates.

The company Articles of Association disallows any external alterations to the property. Cosmetic improvements are allowed but these have to be approved by the "Juristic Committee". The addition of a swimming pool provided the pool was in line with the overall project concept would be allowed.

The share value is governed by market forces and is only realised at the time of sale. The allocation of shares is transparent and determined by the size of plot, location within the project and cost of build at inception in line with an agreed formula recorded within the Articles of Association. Regarding the sale of shares, existing share holders must be given first option, new share holders must be approved by the "Juristic Committee".

The value of shares between different properties can vary ie a seller is not bound to sell his shares at a fixed price, he has the freedom to negotiate the best price he can for his property subject to the controls defined within the AoA.

Cheers[/quote]


This sounds like an ingenious solution but I would think it would be complicated to implement. Articles of association may not be an effective tool for regulating the behaviour of shareholders as it is not intended for this purpose. It is more to ensure that the management follows certain principles to the benefit of shareholders in adminstering the company. I think the company could be sued for any breach which would create a liability for other shareholders. A specific shareholders' agreement would be more appropriate but enforcing it would involve a shareholder being sued by another group of shareholders. A court case would draw attention to the structure and there is no telling which way a case would go in the Thai courts. Better to agree to arbitration in Singapore which has a specific arbitration procedure for foreign businesses. At the end of the day, the project is still exposed to the risk of being investigated as a company with foreign shareholders owning land, so it had better have genuine Thai investors shareholders.

The shareholders would probably be liable for the developer's actions e.g. building without a proper licence or for real or imagined breaches of the terms of the house estate development licence. So shareholders should get a decent independent lawyer to check the licence and the building permits. Normally this liability rests with the developer.

I would recommend also having 30 year leases in place. You could put in minority protections to require a 75% vote to change the AoA and shareholders agreement and hope that is not construed as foreign control. Otherwise a simple majority vote could amend the AoA and throw out all the rules.

The more it looks like a real tourist business e.g. has income from short term lets, restaurant etc, the less likely it is to get shot down but it sounds vulnerable to a test of what is the intent behind setting up this structure.

Probably difficult to sell. Thais would certainly have no interest in owning property in this way. You are basically setting up a real estate investment trust and, as you know, these usually trade at a discount to their net asset value. So the realtors should expect

Good luck to you anyway.

[appleman_thai]

Well i have followed the discussions on this topic with great interest. It is early days still and i think we should wait a little longer to see how it all pans out.

However, on a positive note, it could mean that those of us who have invested in condos (legally!) should benefit. Money that would have been invested in houses will more likely go into condos and therefore push up the prices on condos????!!!

Secondly, those you HAVE taken a risk and bought (condos or houses) for investment purposes will have a much better chance to rent them out as more people will rent instead of buying in the near future.

Finally, best advice i have heard EVER is "dont invest in property in thailand what you cannot afford to lose"!

[malcolminthemiddle]

Think you will find that Thatcher never introduced double tax relief.

What the Tories did do was cancel double Miras, ie tax relief on your mortgage for a couple.

Mike.

The Tories won the 1979 General Election with Maggie Thatcher replacing James Callaghan as PM.

MIRAS was introduced during April 1983.

Before August 1988 Each borrower (married couples counting as one borrower) was allowed relief up to the limit even if their loans were for the same property.

After August 1988 The limit for new loans has been £30,000 for each property irrespective of the number of borrowers.

9 March 1999 Mortgage interest relief will be withdrawn from April 2000, the Chancellor announced today.

Source: Google