HOUSE REGISTRATION

[Brit Jim]

Hi

I bought my house 2 yrs ago and have just found out that its not registered at the Land Dept just the Land in my Thai Co. I do have the chanote in my Thai Co, building permit and am in the process of making the Blue/ Yellow Book.

I realise now the house was not registered to save all parties TAX mainly the developer. The majority of foreigners that Ive spoken to in HH seem to be in the same boat and have no plans to register the house. As long as they have the Chanote they seem content.

I just wandered what the general consensus is with this topic?

A couple of questions please?

1. Is non registration of houses acceptable and surely the Land Dept or relevant Dept must pick up on this at some stage. They must receive numerous building permits yet only a fraction are registered? Also are there any penalties?

2. I guess that you can sell your house with out it being registered. If you sell to Farang you give them your Chanote and Thai Co. Sell to Thai and you just pay 50/ 50 on The Land Tax and dont mention the house! But not ideal.

3. I guess that making the Blue / Yellow Books doesnt attract any adverse attention about house registration issues.

4. The only problem I foresee which has been pointed out to me by one of the TEAM is when you come to sell. iF the buyer uses a good solicitor then they may pick up on this fact. As the seller I could face a BIG Tax Bill and un wanted attention from the Land Dept. Not ideal! That said there are not many real solicitors in HH and the ones that exist charge vast sums of money.

5. If the house is registered in the Thai Co paperwork as an asset then maybe registration would nt be needed. Not sure?

I do find the whole process frustrating. Just trying to do the right thing is not easy. I do have a good solicitor in HH now so its possible to do.
Im just a little concerned that if/ when I go ahead that Mr Developer will get stung for a nice big tax bill which obviously wont go down well.

Does anyone know if Thai Companies are still Ok at the Land Dept for registration of Land? Or is this just another phase that were going through yet again?

Cheers

[Super Joe]

Hi Lippy, I know we've exchanged some PM's but I don't think I asked you the following:
How were your contracts with the developer structured ? It is common practice for you to have two contacts for a new house, 1) Buying land freehold or leasehold from the developer and 2) The customer contracts the developer's builder to construct them a house with the developer overseeing and managing it. So the customer is effectively building their own house and as such there is no transfer of house from developer to customer upon completion, therefore no transfer tax due.
In this case the set-up is fine with the land office tax wise (leaving aside shareholder issue) and house can be registered separately at anytime in future.

See attached Property Tax article which explains the different contractual set-ups with developers, page 18 under heading of 'Construction vs purchase of a villa - The tax difference' http://www.bdo-thaitax.com/publications ... _Aug08.pdf

That said there are not many real solicitors in HH and the ones that exist charge vast sums of money.

Herein lies the problem why many farangs have bad property set-ups. The majority of customers for some reason do not believe legal guidance is part of a real estate purchase over here, as it would be back home. Mind boggling.

Good luck mate,

SJ

[Hobiecat]

My buddy ran into the same problem. He finally go it fixed by his wife (Thai) making countless trips to the land office as she refused to pay them there requested money under the table. It took here a month of almost daily trips.

When we built our house we fortunatley got the building permit in my Thai company so didn't have to deal with transforing the home at the the land office. Ensuring we did things correctly we went to the tax office and had to pay 3% of the declared value of the home.......only. 650,000 is what we daclared and had to pay 19,500 baht.

As you mentioned you may run into a problem when you go to sell your home if someone catches it at the land office as you will have to present you blue book for it to be transfored to the new buyers name (Thai or Farang)and if it's not in your name we'll it's very possible the transfor will not go through. Any Thai is going to 1000% want the house transfored into there name, or have there name placed in the blue book. You may slip it by a unsuspecting farang but that's not really fair is it?

Unfortunately many developers agree on the 50/50 tax bill when purchasing a house but neglect to mention anything about the tax bill required to pay on the house which comes back to bit the purchaser in the ass a few years later.

I'd continue persuing getting the house transfored into your Thai company if I were you. The longer you wait the bigger the tax bill will be and a very good chace your going to get tagged with a fairly stiff tax bill.

[Super Joe]

PS: People should pay any due taxes at the land office before end March 2009 when the masively reduced property tax incentives end.
There's probably a good chance they'll extend them for another year though bearing in mind the state of the market!?

SJ

[Brit Jim]

I have just checked the contract structure:

On the reservation from it states the following:
I ****** WISH TO RESERVE THE FOLLOWING LAND PLOT **** AS SHOWN IN PLOT PLAN OF THE ****** VILLA PROJECT WITH A HOUSE STYLE ***** TO BE BUILT ON THIS PLOT.

SJ: Maybe this reinforces what you said. Where the buyer purchases the land from the developer and then contracts him to build the house. Looks vague to me and no mention of Taxes on this form.

On the main Sales Contract it states the following:

TITLE: CONTRACT FOR THE SALE & PURCHASE OF THE PROPERTY KNOWNS AS PLOT 123.

THE PURCHASER AGREES TO BUY AND SELLER AGREES TO SELL THE BUILDING & LAND DESCRIBED AS PLOT 123 & *******STYLE.

THE SELLER AGREES TO TRANSFER THE LAND TO THE OWNERSHIP OF THE PURCHASER ON (DATE). THE LEGAL COSTS OF TRANSFER & TRANSFER TAXES WILL BE PAID IN EQUAL SHARES BETWEEN SELLER & BUYER. ( NO MENTION OF PROPERTY HERE CONCERNING TAXES?)

I will seek legal advice in January as I want this sorted. As SJ points out the transfer fees are reduced till April 2009 to .01% so its in my interest to pay this now.

Any advice graetly apprecited!


Cheers