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Phuket

Gov sparks furore with Phi Phi proposal

Legacy Phuket Gazette

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Gov sparks furore with Phi Phi proposal | The Thaiger

PHUKET: Governor CEO Pongpayome Vasaputi has landed in the middle of a war of words after suggesting that the central government should buy the Phi Phi islands, kick out private businesses and run the islands as a state enterprise. During a speech about the CEO system at a Thai Rak Thai Party seminar on Friday at the Patong Beach Hotel, Gov Pongpayome said, “At the moment many islands are not as beautiful as they used to be. The government should buy them; Phi Phi and other tourist centers should belong to the nation. “Some of the private businesses there cause a lot of damage to the islands and then, after the damage has been done, the government has to fix it. “That’s not right. The best thing would be for the government to buy the islands and then run them itself,” he said. He proposed that, after buying the islands, the government should manage them like a state enterprise, taking care of all businesses initially and letting private operators open again only after “everything is under control”. “It’s lucky that about half of the islands are national park, so buying the land back should cost about 3 billion to 4 billion baht,” he pointed out. Gov Pongpayome’s idea got a scathing reception from Saritpong Kiewkong, Vice-President of the Krabi Provincial Organization Administration (OrBorJor) and owner of the Phi Phi Pavilion Resort. K. Saritpong told the Gazette today, “The Governor of Phuket must be dreaming. He should concern himself only with Phuket Province. I think he must have lost his map.” Many islands in Phuket province, K. Saritpong said, were dirtier than Phi Phi, and Gov Pongpayome should take care of his own backyard before talking about other provinces that are outside his jurisdiction. “Gov Pongpayome has complained that Phi Phi is like a garbage dump. But many islands in Phuket Province, such as Koh Loan and Koh Hei, are like septic tanks,” he said. “The problems in Phi Phi are not caused by the private sector. They are the result of poor law enforcement and a few selfish businessmen. “Local people here are not dreamers like the Governor of Phuket. They think that the government should first take care of basic facilities in Phi Phi, such as power, water, a jetty, sanitation, good walkways, an incinerator, and proper policing,” K. Saritpong said. An incinerator and a water treatment plant were installed many years ago on Phi Phi Don by the central government but have never worked properly because, say locals, no one was taught how to use them properly. A dam to store drinking water, also built by the central government, leaks, despite being repaired three times. “When Gov Pongpayome says that there’s a lot of garbage in the sea around Phi Phi, he is striking a blow at the heart of tourism in Phi Phi,” K. Saritpong said. “I don’t understand why he didn’t discuss the issues privately with those concerned, instead of making them public through the media. “If I were dreaming like the Phuket Governor, I think it would be better for us to sell Phuket Island – it’s more famous, so we could get a lot more money for it and repay Thailand’s IMF loans.” But the local director of the Tourism Authority of Thailand (TAT), Anupharp Thirarath, told the Gazette that he thought a government purchase of Phi Phi would be a fine idea. Pointing out that the Phi Phi Islands attract about 800,000 tourists a year, he said, “Phi Phi has many problems. It is a very beautiful place, but because of encroachment and disorder, its value has been wasted. “If it is possible to reorganize everything and redevelop the Phi Phi Islands, they would become a valuable and classy tourist destination in the future.”



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Bangkok

Top Five things to consider if you’re buying a condo in Thailand

Tanutam Thawan

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Top Five things to consider if you’re buying a condo in Thailand | The Thaiger

Not quite a Top Ten but some good straight-talking about buying condominiums in Thailand from Desmond Hughes from Hughes Krupica

One of the most commonly read or spoken summary of foreign ownership of property in Thailand is along the lines of

“Foreigners can buy a foreign freehold condominium in their name”.

At this sentence, many foreign investors switch off, and assume that the rest of the detail provided by the author may be legal mumbo jumbo or a thinly veiled attempt to win their business.

In fact, there is quite a lot you should know about Thai condominiums, before you start property hunting. As my clients don’t generally spend their time reading legal journals and legislation unless they have to, I have set out a mixture of legal and practical matters below without much distinction:

1. Only 49% of the Registrable Area of a condominium can be sold to foreigners.

In Bangkok, this is not likely to have any impact on you. Most of the buyers and owners of condominiums in Bangkok are Thai nationals. Even in condominiums popular with foreigners, it is an uncommon phenomena that foreigners would ever outnumber Thais as owners in a building. You might ask why the rule even exists, but there is a fear and protectionism in many Asian countries, not just Thailand, to try and keep foreigners ‘controlled’ through numbers and perecentages.

In other places – Phuket; Pattaya; Koh Samui; Chiang Mai and Hua Hin particularly you should apply caution to ensuring that the correct ‘quota’ of foreign units is available to be sold to you on a freehold basis.

2. Banks often advertise they will give finance, even potentially to foreigners, but in the end – don’t

I speak from personal experience and from that of my clients. For my first condo investment in Bangkok, I had to take out a loan with HSBC which was then taken over by a Thai bank. My loan had to be in foreign currency, because in order to buy a foreign freehold condominium – you have to send foreign currency into Thailand from overseas to generate ‘foreign exchange transaction forms’ to register the title to a foreigner at the land office. This means a lot of hoops for a bank to jump through simply to provide a mortgage. Foreigners are also viewed as flight risks by Thai banks and they do not wish to spend their time chasing foreign assets. This all means that a very high percentage of the foreign buyer market is cash based, which is good for the stability of that part of the condo market.

If you are tempted to try and take out finance applications to banks, be aware that the banks are looking for you to have some business in Thailand; perhaps to be married to a Thai national who preferable from the bank’s perspective will have some degree of wealth for self-support; and that you have other assets in Thailand with a history of using and paying off credit such as credit cards.

3. There is an oversupply of condominiums in Bangkok at the moment and rental yields are traditionally low in terms of % compared to more expensive Asian neighbors – Hong Kong and Singapore, and further afield

A condo in a prime rentable area at a high investment price can remain rentable due to its extremely useful location and amenities. If such condo has a 24 hour supermarket in the basement of the retail area and dozens of restaurants, as a condo building I am thinking of does have such amenities, then it will remain rentable for some time if the property is maintained. However, another condo at the end of the same ‘Soi’ and post building and delivery could remain unrented after many months and even if the rent is cut to 50% of the market price. Don’t just take my word for the state of the market for condo rentals in Bangkok, ask the agents.

In addition to this, the authorities are taking a closer eye at tax declarations and ‘cracking down’ on undeclared taxes – not just personal income tax, but the ‘business tax’ of 12.5% for renting units out. This all adds to the costs of investing and renting in a condo, and you must calculate this into your budget and forecasts to avoid living in fantasy land about dream returns.

3. You won’t have any say in how the condominium is managed

Unless you buy up over half of the voting rights attached to units in the entire building, you will be a minority voice on issues like the raising of the common area fees; use of the ‘sinking fund’ – the fund to make capital repairs, changes to the rules and regulations and general maintenance decisions, even of some significance. Don’t imagine standing up at an co-owners meeting voicing your opinions and somehow making headway in ‘changing’ the direction of the management of a building. The way in which a building is managed boils down to how the developer has structured ownership, whether the developer retains many units and a large % of the voting rights or not, and whether the developer plans to self-manage or outsource management of the asset to a reputable or not-so-reputable management company.

If you don’t check the management plan then I can reference lots of analogous situations where you would take more care – if you buy a car, you should think if there are any decent repair centres nearby and at a reasonable price – Ferraris in Phuket aren’t currently easy to maintain, I would imagine, as a non-Ferrari owner and observer of the state and condition of the roads in that Province. You also wouldn’t, I hope, buy a smart phone without knowing you could have the phone service, fixed and various parts replaced on reasonably short notice. As a property is a far higher value of investment, a lot of investigation into the management plan is necessary.

4. Don’t Believe the Hype – It’s a Sequel

False Media, we don’t need it do we? If you see a glossy marketing brochure and are told that the developer ‘has to deliver on its promises by law’ – be wary. To take one example, I bought a condo under which a ‘private wine cellar area with personal secure wine bottle storage space’ would be provided to every buyer. Amazingly, without any shame at all, the famous developer constructed an unchilled cheap wooden cabinet with glass doors, no locks next to 4 sofa chairs in the open space corridor between a swimming pool and the gym. If you wanted to fry an egg on the ‘wine cabinet’ then that was highly likely to have been possible.

These kind of things are not all ‘horror stories’ – I actually got a decent condo notwithstanding the missing items. However, you will often have to compromise when in more highly regulated and supervised jurisdictions, you would not. Compromise is a very common work in Thai society and it applies to business and consumer purchases too.

5. Set up your ownership for easy re-sale

If you are buying a condo as a ‘foreigner’ and paying cash, then you can buy your condo through a foreign company, and sell the company later. This is only worth doing if the cost of setting up and maintaining the foreign company is reasonable and the company you set up is ‘saleable’ and attractive to others. You should not carry out this kind of structuring to ‘avoid tax’. However, you can set up this kind of structure, pay tax on the purchase, and subsequently deal with your company as you see fit, provided a buyer is willing to buy it. If such a company receives rental income, then even if it is foreign it is till liable to taxes as the use of the ‘immoveable property’ for generating revenue isn’t deemed to be ‘outside’ of Thailand, and that applies even if the company tries to contract for and receive the rent outside of Thailand.

Desmond Hughes has operated and owned 2 law firms in Asia in 14 years spanning Thailand; Vietnam; Indonesia with clients in all of Asia and other markets investing inwards into the region with his existing firm Hughes Krupica possessing a large market shares in its fields of expertise. 

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Phuket

Motorbike driver smashes through glass window after accelerator malfunctions

Tanutam Thawan

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Motorbike driver smashes through glass window after accelerator malfunctions | The Thaiger

A female motorbike driver has sustained injuries after her motorbike’s hand grip malfunctioned and she collided with a glass wall. Chalong Police were notified of the incident at an air conditioning shop at 6pm yesterday on Chao Fa West Road in Chalong.

Police and emergency responders arrived and found the shattered glass wall and a damaged motorbike. The injured 40 year old Naowarat Jankarn had already been taken to Chalong Hospital. She sustained injuries from cuts from the broken glass. Pools of blood were found on the floor.

Ms Naowarat told police that she had parked her motorbike in front of the shop since Wednesday . The motorbike was undrivable because the hand grip accelerator was malfunctioning.

Yesterday she started the motorbike, claiming she had forgotten about the broken accelerator.

Motorbike driver smashes through glass window after accelerator malfunctions | News by The Thaiger Motorbike driver smashes through glass window after accelerator malfunctions | News by The Thaiger Motorbike driver smashes through glass window after accelerator malfunctions | News by The Thaiger Motorbike driver smashes through glass window after accelerator malfunctions | News by The Thaiger Motorbike driver smashes through glass window after accelerator malfunctions | News by The Thaiger

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Phuket

Police hunting for driver who threatened others with a gun on Phuket road – VIDEO

Tanutam Thawan

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Police hunting for driver who threatened others with a gun on Phuket road – VIDEO | The Thaiger

PHOTO: Tiw Tiw

The Thalang Police are hunting for the driver who was threatening other motorists on Thepkrasattri Road by waving a gun around out of the driver’s window of his red sedan in Thalang this morning.

A Facebook user ‘Tiw Tiw’ has posted the video with a message reading “where are the police, please follow him. The incident happened this morning in Thalang.”

The video shows a car switching from one lane to another.  The driver shows a gun in his car window and then appears to throw it out (at least he used his indicator).

The Thalang Police are investigating the incident and want to find the car driver for questioning.

 

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