Thailand property outlook still not clear

In the past foreigners could hold majority voting rights in companies even though the foreign shareholding was less than 50 per cent.

In the property sector many shell companies with Thai nominees have been used to purchase houses and land to avoid Thailand’s tough laws prohibiting foreigners from owning property and land.

With the proposed changes to Thailand’s capital controls, investments in real estate and condominiums have been exempted, have also created some confusion.

Buyers, Investors and Developers have in the main put things on hold until the changes in the laws are finalised and passed by the government.

Further advice may be obtained from The Property Exchange

Changes to the Thai Foreign Business Act

Foreign property buyers are concerned at the Thai government’s proposed changes to the Foreign Business Act.  At this stage there should be no cause for alarm as the changes are not signed into law yet and are only agreed in principle only. 

Undoudtedly, there will be more debate and many revisions to follow.  True to form, the government has already (within 24 hours) backtracked on some of the changes.  Property Company Commentators are already contradicting each other and none can agree on the impact of the changes.  We must be patient and wait and see.

For further information please contact The Property Exchange

Property not affected by Thailand’s Capital Inflow Laws

On Monday 18th December 2006,  the Bank of Thailand imposed a blanket 30% reserve requirement on all foreign transactions against the baht in a bid to stem inflows that had helped push the currency to a nine-year high at nearly 35 to the dollar.

Tuesday 19th (Black Tuesday) The new rule spurred panic selling on the SET (Stock Exchange of Thailand), with the index plunging 14.84% in its worst one-day loss. Policymakers immediately announced that foreign stock investments would be exempt from the reserve rule, which helped boost the index 11.16% on Wednesday 20th.

The property market was also affected with many foreign property investors putting a hold or even pulling out from purchases as the rules were still very unclear.

Aliwassa Pathnadabutr, managing director of CB Richard Ellis Thailand, said the Bank of Thailand clarified yesterday that property including land and condominiums would be exempt from the reserve requirement on short-term capital inflows. Foreign purchasers of condominiums can bring funds into Thailand to make purchases but buyers should clearly state the project name and unit number when remitting funds, she said.

”We welcome this clarification which means that foreign property purchasers are not affected by the new regulations. We believe that this will reassure existing and potential property purchasers,” she said.

There are still many foreigners who want to purchase condominiums in Thailand, both to live in and as long-term investments, she said.

Further information can be obtained from the legal section of Business Mission Asia – http://www.businessmissionasia.com/

Renting a Property in Thailand

Renting a property or accomodation in Thailand is fairly easy and straightforward and you can rent everything from a Studio (Bedsit for Brits) up to a two storey penthouse apartment (flat),  and everything in between.

If you are looking for a short rental period of just one or two months then some hotels have excellent long stay packages at much better rates than the standard nightly rate.  Availability and pricing does vary depending on the season and there may even be restrictions during popular Thai festival times.

Location is obviously very important, depending on where you work, schools, shopping, entertainement etc, but in Bangkok it is very important to get some local knowledge  as some areas are prone to flooding and of course the notorious traffic jams.  The BTS Skytrain and MRT Subway have definately improved the daily commute, and although travelling around parts of the city has been greatly improved by the introduction of the Skytrain and Subways systems, they only cover a fraction of the city. 

Popular areas for expats in Bangkok are the Sukhumvit or Silom areas because of the quality of accommodation and convenient transport, shopping and lifestyle facilities. But in these areas, expect to pay premium prices.

Whether you are looking for a house or apartment, both are available as furnished or unfurnished.  Furnishings tend to be sparse, and a “fully equipped kitchen” may just mean a microwave and fridge.  It is imperative to take along a Thai person to clarify what exactly is on the inventory.  Using a reputable real estate company to loacte a rental property for you can save you a tremendous amount of grief by listing exactly what is included in the rental price.

Expect to pay a deposit of two months rent and one month rent in advance to move in.  The standard contract is for a year and may be in Thai so again your Thai friend or real estate company will be of great help in translating the contract. Charges for electricity, water and telephone are normally through the condo or apartment management and a surcharge for each is added. Surcharges vary from place to place and generally utility bills for a house would go direct to the tenant.

For a catalogue of properties available for rent and qualified advise visit http://www.thepropxchange.com 

Individual Property Ownership in Thailand

Genarally speaking, foreigners may not own property in Thailand.  There are some exceptions which deal with BOI (Board of Investment) promotions and condominiums, subject to the investment terms in compliance with the current BOI promotions and condominium ownership.

Ownership of land is highly restricted also, however it is still possible for foreigners to have an interest in real estate and property here in the Kingdom.

Over a period of time this blog will provide a series of articles dealing with the ownership of property and land in Thailand.   In time, white papers and pdf downloads will be available from: http://www.thepropxchange.com