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  Contract Summary & Key Legal Issues  
 

Freehold and  Leasehold Ownerships

Interested buyers can decide the ownership structure to fit his preference  whether on a freehold or leasehold basis under separate agreement to be chosen. For freehold ownership, foreign buyer can do the long term lease registration for thirty (30) years plus option to renew for another thirty (30) years. Under the Longterm Lease Agreement to be signed by the parties, the leasehold ownership will be officially registered under the name of the Lessee and recorded at the Land Office. During the 1st  period of the lease term, the leasehold can be converted to the freehold ownership with minimum costs and expenses if the foreign buyer is or shall be legally entitled to own the leased property due to the change in law or regulation in the future. The leasehold ownership can also be assigned, subleased or transferred to any other persons as well.

The Freeholder ownership can also be acquired by a foreign buyer under a Thai company limited to be formed and registered. The said Thai limited company shall consist of at least seven (7) shareholders and the foreign buyer can have the shares held in his name under the said company for up to 49% while the remaining 51% share holding ratio shall be held by the Thai persons. Any foreign buyer can act as the authorized director of the company without requiring a work permit.  Under the setting-up structure with legal advice from a licensed lawyer, the foreign buyer can be assured that he will have proper control of the company and its property held under the name of the company.  However, the company will incur extra costs and expenses during its establishment in order to properly keep good accounting records and tax filings every year. The average annual expense to keep and maintain the company’s accounting and audit reports is in the sum of approximately Baht 50,000-75,000 per year (including auditor’s fee payable annually). Company establishment cost and expense are varied depending upon the chosen structure and amount of registered capital of the company.
Information provided should be use for guideline only.   It is recommended to consult with a licensed lawyer to determine the most suitable structure if the freehold ownership is desired.

Tax and Transfer Fees

Leasehold Registration Fee                     1.1 %
Freehold Transfer Fee                               2.0 %
Stamp Duty (Freehold)                               0.5 %
Special Business Tax (Freehold)            3.3 %
Corporate Income Tax                               15-30% (from the net profit)

All applicable taxes as shown above will be solely borne by the Seller, and the Buyer whether under leasehold or freehold basis will be responsible for transfer fees and/or lease registration fee as the case may be.

Maintenance Management Agreement

All buyers are required to sign the Maintenance Management Agreement with the Manager for whom will be properly appointed by the Seller to ensure that all common property will be well kept and maintained in good condition at all times. Under the said agreement, each buyer will be required to pay for maintenance fees (paid one year in advance) plus sinking fund for special maintenance and/or repair of the common property. The said common property and common fund will subsequently be passed on and transferred to the new legal entity which to be run and operated by all owners. Estate management will provide the following services to the common area:

  • 24-hours security service
  • Private remote community gate entrance
  • Underground utilities
  • Common road lighting
  • Landscape and garden
  • Garbage collection

Monthly fees and other utility charges are as follows:

  • Monthly space fee in the sum of Baht 18 (Eighteen Bath only) per square meter
  • Monthly Utility charges (i.e, Electricity) at the actual rate charged by the government or other service providers plus ten (10) percent from the billing statement(s) for administrative and handling expenses incurred by the Manager
  • A one-time payment of Baht 150,000, which will be deposited to the “sinking fund” account. Sinking Fund shall only be used for any major repairs or maintenance of the Common Property.

Individual Home Services: Such as Pool Cleaning, Gardening, Maids, Etc. shall be negotiated between individual owners and Manager.

Construction Inspection and Warranty

All houses will be under one (1) year warranty from the date of transfer or the move-in date as the case may be. The Buyer always has the right to inspect the house during construction which will take approximately 365 days for completion under the building plan and specifications.

Free and Clear Title

All land titles will be transferred to freehold owners or registered to leasehold owners if  under long term lease with free and clear land title deeds (called in Thai language as “Chanote” which is the best legal land title) without any mortgages, liens or encumbrances.

Road Access and Utility

All owners will have road access from his individual house onto the public road. Water utility will be provided within the common area (common wells). Separate electrics meter will be provided along with telephone line(s) at the Buyer’s own costs.

Lawyer’s fees and expenses

We recommend foreign Buyers to seek advice from professional lawyers. They may consult also our appointed lawyer on how to fully conform to the Thai law. Lawyer’s fees and expenses are varied depending upon the ownership structure and other legal needs.

 
Copyright © 2005-2006 Newport Land & Development Co.,Ltd All Rights Reserved.
15/32 Moo2, Vises Road, Rawai, Phuket 83130 Tel : +66 7 628 9448, +66 7 628 9449 Fax. +66 7 628 9449 Mobile : +66 1 540 2391, +66 4 655 3339
Email : kalita_rawaicoast@yahoo.com
 
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