Ko Samui Properties Newsletter 73

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Ko Samui Properties Newsletter 73 Powered By Docstoc
					                      NEWSLETTER No 73 – OCTOBER 2010
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What is happening in the Koh Samui property market? Well it has been so quiet for such a long time that any movement
almost seems like an earthquake. Sales are happening albeit at low levels and only in respect of properties the owners of
which have accepted the market correction that has occurred over the last two years. There are clearly people out there
who are trying to talk the market up which in the end only makes them look foolish and the last thing I want to do is give
the impression that all is fine. There are still a tremendous number of properties, both new and re-sales, available and it is
going to take some considerable time for then to sell. Nevertheless it is encouraging to see sales taking place.

The infrastructure of Koh Samui has lagged behind development and there are constant complaints about water shortages
and erratic electricity supply. The difficulty the Municipality faces in both regards is a combination of lack of funds and
time. Major infrastructure items are costly and expensive. They need time to plan and obtain funding. Driving round the
island you can see the new lengths of black water pipes being laid which according to officials will alleviate the current
unpredictable water supply. Also in an article below there is news of the long planned extension to the electrical
distribution system which will bring a supply to a new sub-station in Meanam. We have already seen some road
improvements and the road by Bandon Hospital is in the process of being widened and re-laid. Slowly, slowly the island is
getting what is required – not fast enough for many, but at least it is happening.

Driving back from Tong Krut on a regular basis I pass “The Garden of the Fool” Puppet and Art Shop. The owner, Barrabas,
has a large number of puppets available and it is worth a visit just to see the craftsmanship. “The Garden of the Fool” can
be found by turning left after Hua Thanon (coming from Chaweng) onto the lower ring road (4170) and it is about one
kilometer on the right hand side.

Last month I promoted the Samui International Jazz Music Festival. This has just finished as was a great success. Look out
for more of the same next year!

Follow Ko Samui Properties on these Social Media Sites

             Face Book                                       Twitter                                 LinkedIn

People continue to recognize that there has been a significant market adjustment over the last two years. Each week we
have been getting instructions to reduce asking prices to levels more appropriate to the prevailing market conditions
although May was again somewhat quiet in this respect. You can however find these on our web site at the Hot Press
Offers . You will see a great number of properties with prices that have been reduced from between 17% and 30%. These
reductions are producing sales and, although still not many, there are a few more buyers around than there were a few
weeks ago.

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Land prices have remained relatively fixed and accordingly few sales have been registered. However here are details of one
piece of beach front land in Plai Laem where the price has been very dramatically reduced to achieve a sale.

                        PRICE REDUCTION
                        3 Bedroom Hillside Ocean View House in Bang Po –
                        Baht 16 million – Now available at Baht 11,500,000

See also in particular the following New Listings – CTRL + click to follow the link:

                        NEW LISTING
                        Two Bed bungalow in Plai Laem
                        Available at - Baht 1.5 million

We have a number of new properties to inspect this month so look out for details on the web site and in next months

                         For Festivals around Thailand visit the Tourist Authority of Thailand website.

I am pleased to note that Samui Express is at last back on line and you can find them here
And you can find The Samui Gazette here - http://thesamuigazette.com/

Brits warned on perils of bike rentals                                                       Samui Express September 2010
MANY Britons are injured each year in road accidents involving hired motorbikes and scooters, and accidents from these two-
wheeled vehicles are common in popular tourist destinations, says the UK’s Foreign Office. In a press statement released recently,
the Foreign Office said renting a motorbike or scooter while on holiday not only puts British nationals at a great risk of having an
accident resulting from unfamiliar or dangerous driving conditions. The possibility of invalidating your insurance is also high if you do
not wear a crash helmet, or if the rented vehicle is unregistered, it said. The FO warned its nationals of facing extremely high bills for
medical treatment once injured as a result of a road accident and there is no valid insurance cover. It said recent research by the
Foreign Office showed a quarter of young travelers admit to driving or being the passenger of a moped or quad bike without
checking if their insurance covers them first. FO suggests the following before renting a vehicle: Check your travel insurance policy
carefully to ensure that you are covered and check the small print of the lease agreement carefully. You should also check whether
your insurance includes third party cover. Check that your license covers you to drive the vehicle you’re hiring. If you hire quad bikes,
check if your travel insurance covers you for their use and find out whether it’s legal to ride them on the public road. Make sure you
use a reputable hire company – check that they are licensed to rent out bikes to tourists. Check whether local law requires you to
wear a crash helmet. Never hand over your passport as a guarantee against returning a motorcycle or scooter.
Always wear a crash helmet and protective clothing, whether you’re the driver or a passenger.

Fire destroys bungalow                                                                    Samui Express September 2010
A BUNGALOW owned by a local resident was destroyed by fire recently in Laem Mai Kaen beach, Bophut. When firefighters arrived
on the scene, the distressed resident of the house, Paiboon Boonlee, 57, was anxiously waiting for them. Mr. Paiboon, who was out
when the fire broke out, said the bungalow belongs to Jintana Suwitthayaporn, his daughter-in-law. He said that before he left the
bungalow to go to work in Chaweng, he checked everything but that he left the electrical connections to the refrigerator and the TV
plugged in. The fire may have been caused by a short circuit, according to firemen. A witness told police that he saw smoke coming
out from the house and then called Paiboon, who rushed home. He said he helped put out the fire after he reported it to the
emergency call center.

                                                                                                                                Page 2 of 8
From Samui Gazette – September 2010

                                      Page 3 of 8
Seminar slams oil drilling in the Gulf                                                        The Nation          12 September 2010
Some 100 Samui residents voiced objection yesterday to oil exploration and drilling projects around Samui, Pha Ngan and Tao
islands, plus Angthong Marine Park at a seminar in Surat Thani. The islanders want the Gulf of Thailand conserved. They say oil
production could have a huge negative impact on tourism. They said the Samui Tourist Business Association and private sector had
submitted a letter of objection to PM Abhisit Vejjajiva and related agencies but the government had done nothing. The association's
vice president and "Rak Ao Thai" Group PR person Anont Wathayanon said a public hearing they hosted about oil exploration found
most people disagreed with drilling projects in the Gulf near the islands. That was because people feared such projects might affect
tourist businesses worth over Bt15 billion on Samui Island, if there were environmental problems from oil drilling similar to the Gulf of
Mexico leak, he said. A lecturer at Surat Thani Rajabhat University, who asked not to be named, said most teaching staff and
students disagreed with the project as they feared negative impacts on the environment, tourism and people's way of life - especially
as one concession plot was only 41 kilometres from Samui. The lecturer said the private company granted the concession and state
agencies still couldn't clearly state what the country gain from such oil exploration. In a previous protest against drilling projects,
university students, members of the public and NGOs, plus foreign tourists linked hands for a 52km line as a symbolic gesture to
protect Koh Samui from desecration. The Energy Ministry's Department of Mineral Fuels approved oil exploration in plots in the Gulf
of Thailand in 2007. A range of companies gained leases to many plots adjacent to popular islands. Yesterday's seminar looks to be
just part of a determined push by environmental groups to stop oil exploration near the islands. Legal teams are said to be gathering
facts and evidence for a lawsuit they hope to file shortly in the Administrative Court.

Kenyans dominate Samui Marathon                                                 Bangkok Post                 20 September 2010
SAMUI : Kenyans dominated the inaugural Samui Island Marathon 2010 with Patrick Kipkemoi Rotich and Zeddy Rere taking the
titles in the men's and women's events respectively. The three-million baht race was presided over by deputy prime minister Suthep
Thaugsuban and featured about 1,700 runners including 85 athletes from Kenya. The 26-year-old Rotich was the men's overall
winner with a time of 2:20:05 hrs, only 46 seconds better than his compatriot Charles Kanyao (2:20:51hrs) Rotich said he was not
convinced he would win because he knew he was up against some tough opponents from his own country "Every Kenyan has the
potential to win, depending on who is in the best form," he said.

However, he admitted he had worked hard for this event after coming second in the Pattaya Marathon last year. In addition to
receiving the trophy graciously donated by HRH Princess Maha Chakri Sirindhorn, Rotich took home 250,000 baht in the country's
most lucrative running event. Despite his win he said he would take the bus back to Bangkok rather than fly. "I came from Bangkok
by bus and I will go back by bus," he said. The first 19 places were taken by Kenyans, with Thailand's Amnuay Tongmit coming in
20th place at 2:37:31. Amnuay received 60,000 baht as the first Thai to finish.

In the women's overall event, Rere finished in 2:48:53 hrs to add the title to her maiden win at the Lewa marathon, Kenya in July.
"I am over the moon because it is my first time in Thailand," said the winner who also received the HRH Princess Maha Chakri
Sirinthon trophy and 250,000 baht. The 30-year-old runner said that because of the humidity she was not at her best, but it was
enough for a memorable victory. Lydia Jerotich Rutto, also of Kenya, was second, receiving 120,000 baht while Thailand's Sunisa
Saylomyen earned 70,000 baht for the third place. Sunisa also received an additional 60,000 baht as the best Thai. In the half
marathon (21.1km), Sonchai Namkhet won the men's event in 1:10:33hrs while Patcharee Chaithongsri took the women's event in
1:26:05hrs. They both earned 60,000 baht. M.L. Nandhika Varavarn, Bangkok Airways vice president, said that she was delighted
with the success of the event. "It is amazing to see such a great number of runners here. We also received huge local support" she
said. "We will make it even better next year." Sapanus Ariyamongkol, general-secretary of the Athletics Association of Thailand, said
the event, sanctioned by Asian Athletics Association, was well organised with the route winning praise from the participants. "It can
become one of the best events in the country," he said.

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Rainbow Warrior II: Turning the Tide                                                       Bangkok Post       11 September 2010
                                                                 After a decade-long mission, Rainbow Warrior II is continuing its
                                                                 "Turn the Tide: Rainbow Warrior's Tour of Southeast Asia"
                                                                 campaign. As the last mission on the tour, Rainbow Warrior II will
                                                                 visit Thailand from September 17 to 30. The vessel will dock at
                                                                 Klong Toey Port's OB Pier and will be open for public viewing on
                                                                 September 18 and 19, before heading to a discussion with local
                                                                 communities about the risks of a nuclear power plant in Nakhon Si
                                                                 Thammarat on September 22. The vessel will then travel to Samui
                                                                 on September 24 and 25, before moving to its final Thai destination
                                                                 in Prachuap Khiri Khan from September 28 to 30. An exhibition
                                                                 about smart power, which is against nuclear power, will also be held
throughout the trip. During its decade-long mission, the vessel has not only inspired people around the world to help better their
homes, but has also stood by communities worldwide to fight against environmental demons.
Admission is free. For more information, visit

Owning a piece of Thailand                                                                        Bangkok Post  4 September 2010
(Original article can be found here)                   A little bit of history as to how the Land Code evolved
Foreign property ownership rights have been a contentious issue for decades, with authorities seeking to attract investment but also
avoid exploitation
One of the most frequently asked questions about property from expatriates in Thailand is why the Land of Smiles welcomes visitors
from around the globe with open arms but does not allow them to own property. Is this really xenophobia? Land ownership
conditions have changed throughout history. The first land act that limited foreigners - which in that period meant only Westerners or
Caucasians - from owning land in the Kingdom of Thailand originated during the era of King Rama IV.
The announcement related to land sales and rentals to outsiders specified only Westerners or farangs, not, for example, Laotians,
Khmer, Mon, Burmese, Chinese, Vietnamese and Indians.
In the announcement, farangs who had lived in Thailand for fewer than 10 years were not allowed to buy land in Bangkok and an
area within 200 sen (one sen equals 40 metres) from the capital's wall.
"It was the colonial period during the reign of King Rama IV," said Somkiat Worapunyaanun, a lecturer at the faculty of law,
Thammasat University.
He explained that farangs were not allowed to own land in those locations because they were too close to the capital. If the capital
was invaded, the army would not have sufficient time to prepare for battle.
"Thailand had felt threatened by Western colonialism since the reign of King Rama III, and serious damage during the periods of
Rama IV and Rama V led to the law," explained the lecturer in land law history.
Farangs were no strangers to Thailand during the Rama IV era, as the French came first in the King Narayana reign during the
Ayutthaya period and the Portuguese were later hired as soldiers.
He explained that farangs entering Thailand during this era looked threatening to Thais, especially since many of Thailand's
neighbours had been colonised.
But given the fierce local rivalries of the era, why prevent only Westerners from owning land? This is because Laotian, Khmer, Mon,
Burmese, Chinese, Vietnamese and Indian people had been integrated in Thailand for ages, said Assistant Professor Somkiat, while
farangs appeared with guns and weapons.
"It's not only in that period when we felt farangs were superior to us, but some feel that way nowadays as well," he said.
"In France or most European countries, anyone could buy land because they weren't afraid of others owning property. Their land
was very costly. By contrast, Thai land was very cheap for foreigners."
Up to 1949, alien land ownership was still limited. A bill controlling alien ownership was passed by parliament on July 18, 1949.
According to an article in the Bangkok Post, by a vote of 34 to 1, the House accepted in principle an amendment requiring private
firms or corporations more than half-owned by aliens to either obtain special permission for ownership from a board appointed by the
Interior Ministry, or else sell their land within 90 days.
In 1954, Thailand enacted the Land Code B.E. 2497 in which alien property ownership rights were codified. In Section 87, the size of
land that aliens were allowed to have included seven categories:
- for a residence, not larger than one rai per household;
- for commercial use, not larger than one rai;
- for industrial use, not larger than 10 rai;
- for agriculture, not larger than 10 rai a household;
- for religious use, not larger than one rai;
- for public use, not larger than five rai and;
- for a family cemetery, not larger than half a rai.
Aliens who wanted to have property as indicated in the code needed to seek permission from the Interior Ministry. For industrial land
larger than the limitation, permission had to come from the cabinet.

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Any aliens owning land exceeding the categories needed to sell or transfer the land within 180 days but no longer than one year.
After the Land Code was enacted, Plaek Pibulsonggram, then prime minister, wanted to distribute land to farmers and prevent
foreign land ownership, said Dr Somkiat.
While the Land Code originated from that notion, it was revoked in 1959 by Sarit Thanarat, the 11th prime minister from 1959-63.
Thai society has traditionally been agricultural. Most people farmed to support life. In the Ayutthaya period, the King owned all the
land, though the people had a right to settle and make a living on it, they just could not own it.
In 1855, the government signed the Bowring Treaty with England that liberalised foreign trade. Land ownership rules were relaxed,
allowing individuals to own land, Dr Somkiat said.
Ownership was still limited to members of the royal family, bureaucrats and foreign merchants until 1932, when Thailand became a
The Land Code had been an effective policy when it was replaced by Revolutionary Decree No. 49 by Field Marshal Sarit, he said.
Field Marshal Sarit revoked the Land Code for three reasons, said Dr Somkiat. One was political pressure from capitalist groups who
owned the land and stood to gain by revoking the Land Code.
Field Marshal Sarit supported industrial and commercial capitalism and wanted to demolish the state enterprise economy that was
the base of political power for Field Marshal Plaek.
The United States and the World Bank also suggested Thailand reduce the power of state enterprises and support private land
They claimed limited land ownership undermined the country's agricultural, industrial and commercial development. Field Marshal
Sarit followed their advice and suggested an amendment that allows the private sector to invest in industries and have unlimited land
ownership rights.
''He [Field Marshal Sarit] forgot farmers and focused on the country's development,'' added Dr Somkiat. ''The Board of Investment
[BoI] started from this point.''
Wittaya Luengsukcharoen, a partner in the international law firm Baker & McKenzie, said the Land Code marked a major change in
Thai law. The country created the BoI and keyed more on exports from this point.
With the BoI creation in 1977, the country targeted exports and welcomed foreign investors. Foreigners were still reticent after the
limitations of the Land Code, he said.
To combat this perception, the government allowed unlimited land ownership for industrial purposes for foreign investors invested
under the BoI programme. Eventually, foreign property ownership boomed after Thailand promoted the tourism industry starting in
1992, the year Mr Wittaya called the first of the boom.
''Tourists wanted to live in Thailand after visiting as they were very impressed with Thai hospitality and friendliness,'' he said. ''They
started seeking ways to own houses here.''
The second boom came in 1997 after the baht was floated, attracting foreigners to buy cheap properties in Thailand.
The year 2000 marked the third age. Thailand's signature tourist destinations Phuket, Samui and Bangkok became highly desirable
residences among the world's wealthy.
''These became status locations to own a property,'' he added.
The boom led to some illegal foreign property ownership. Popular schemes included a fake marriage with a Thai or establishment of
a Thai firm to hold the property.
Under the Land Code, for a firm to own property it must be 51% Thai-owned. As a result, many foreigners set up Thai firms with Thai
To prevent this deception, the government announced a ministerial regulation in January 2002 that allows alien land acquisition
under certain conditions.
According to Section 86 of the Land Code, an alien may acquire land in Thailand only by virtue of the provision of a treaty providing
him with the right to own immovable property. Permission must be obtained from the Interior Ministry.
Before the termination of the treaty on Feb 27, 1970 that allowed aliens to acquire land, 16 countries were signatories: The US, the
UK, Switzerland, Germany, Denmark, Norway, the Netherlands, France, India, Belgium, Sweden, Italy, Japan, Burma, Portugal, and
Pakistan. Since then, Thailand has made no similar treaties.
However, the Land Code has been amended with Section 96 bis providing that since Jan 19, 2002, an alien is allowed to purchase
land in Thailand for residential purposes with a maximum of one rai if they can meet certain conditions.
An alien may also acquire land by inheritance as a statutory heir so long as the land devolved and any land acquired does not
exceed that specified by law.
For example, land for residential purposes not exceeding one rai per household, land for commercial purposes not exceeding one
rai, land for industrial purposes not exceeding 10 rai, and land for agricultural purposes not exceeding 10 rai per household.
An alien whose spouse is either a legitimate or illegitimate Thai national can have the Thai national purchase land but the alien must
give joint written confirmation that the money spent by the Thai side is wholly the separate or personal asset of the Thai national and
not Sin Somros or jointly acquired property.
''This condition is unpopular because of the inconvenience of too much money and red tape to wade through,'' Mr Wittaya said.
''Since this decree has been enacted, only six cases have applied under this rule.''
There are around 20,000 businesses that hold property under the 49:51 ratio of foreign and Thai partners.
As long as no complaint or conflict between partners is brought to the Lands Department, those firms are not scrutinised, said
Anuwat Maytheewibulwut, director-general of the department.
However, new cases attempting to apply this model will find it more difficult as the department will check Thai partners' financial
status to see if they have enough money to buy the property and where the money comes from.

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Many foreigners are frustrated because they feel Thailand wants to draw foreign investment on the one hand while denying foreign
land ownership on the other.
''The government should set a clear policy to show whether it wants an open or closed door,'' said Mr Wittaya, suggesting an
amendment of two issues.
One is amending the Civil and Commercial Code about leaseholds. He believes the leasehold period should be extended from a
maximum of 30 years to 60 or 100 years.
His other suggestion is to amend the mortgage law to allow lease-holders the right to mortgages or to use property as collateral for a
mortgage loan at the bank.
According to current mortgage law, the lease-holder only has right of possession, not ownership rights. As a result, the holder cannot
use it to apply for a mortgage loan.
''The leasehold contract terms are not favourable with foreigners because they are too short. They are not confident whether their
leases can be extended when the contract expires. The leases are also unable to be financed and inherited,'' said Mr Wittaya.
There should also be a rent review system that is fair to both the tenant and property owner. Rent reviews would suggest rates in line
with particular market situations. In the UK, rent reviews are done every three years.
''It's better to allow a foreigner to own a condo outright than using a leasehold contract or setting up a firm to legally hold a property
because this is too risky,'' he said.
However, agricultural land should be reserved for Thais, he added.

                       How foreigners can legally own land in Thailand
- Investing in Thailand under the Board of Investment or BoI investment promotional conditions as per Section 27 of the Business
Investment Promotion Act B.E. 2520.
- Buying a condominium unit as the law allows foreign ownership at 49% of the total area of the condominium as per section 19 bis
of the Condominium Act B.E. 2522.
- Setting up a Thai company with Thai ownership of at least 51% as per section 97 of the Land Code.
For a limited company or a public company, the Land Code provides that such company is deemed foreign, if:
(1) more than 49% of the registered capital is held by foreigners; or
(2) more than half of the total number of shareholders of the company are foreigners.
If the company issues any share certificates to bearers, such shares will be deemed to be held by foreigner.
- Marrying a Thai spouse and proving to the Lands Department that the source of funds for the land purchase was generated from
the Thai side. This is in line with the internal regulation of the Lands Department for investigating whether the owner of the land is a
nominee to a foreigner.
- Investing at least 40 million baht in Thailand and holding the investment for at least five years. Then you can buy up to one rai for
residential use after approval by the Interior Ministry. the investment can be through the purchase of government or state-enterprise
bonds, units in a property mutual fund or investment in activities supported by the BoI. The plot must be in Bangkok and Pattaya or
municipal areas specified as residential zones and must be used for residential purposes within two years. These are in line with
Section 96 bis, and 96 ter of the Land Code and the Interior Ministerial Regulation B.E. 2545.
- Acquiring land by inheritance as a legal heir but ownership must be approved by the Interior Ministry as per Sections 87 and 93 of
the Land Code. The acquisition must also result in the total amount of land held by the foreigner not exceeding the amount that such
foreigner may hold under the Land Code. For instance, for a residence, per family, not more than one rai; for commerce, not more
than one rai; or for industry, not more than 10 rai.

The King owned all land while people had the right to settle and make a living on the land but were unable to own it. This system was
called Sakdina and was also known in the old Western world as feudalism. In 1455, a Royal Command of King Baroma Trai-
lokkanarta of Ayutthaya (1448-88) clearly categorised status levels in society and the amount of land each group was entitled to be
granted by the King. Under the Royal Command, a minister or a general may possess up to 10,000 rai while a peasant may only live
on and harvest a much smaller plot of 10 rai under the Sakdina system.

King Rama IV period (1851-68)

Farang (Westerners or Caucasians) who had lived in Thailand for less than 10 years did not have the right to buy land in Bangkok
and an extended area outside the city wall. In 1856, King Rama IV issued a Royal Announcement to specify the area that could be
sold or leased to foreigners as well as the formal requirements for sale or lease agreements.
For instance, the area in Phra Nakhon and within a radius of about 8km around the city wall could only be leased, but not sold, to
foreigners who had not resided in the Kingdom for at least 10 years, unless approval was obtained from a minister. The sale or lease
agreement had to be in writing, and made under official supervision. Outer areas beyond this radius but still within 24 hours of travel
by small boat, could be sold and leased without restraint, provided the agreement was made with the required formalities.


                                                                                                                                Page 7 of 8
The government signed the Bowring Treaty with England. Land ownership rules were relaxed, allowing individuals to have ownership
rights, but these were limited to members of the royal family, bureaucrats and foreign merchants. Later, under King Rama V, the land
management law was reformed to create a system in which an individual could hold ownership. This led to the emergence of
absentee landlords who owned but did not occupy land. As well, land for the first time became a commodity with high value, and
could only be owned by high-status people.


End of absolute monarchy and the beginning of constitutional monarchy with movement toward democracy.


Alien land ownership control became more limited under a bill passed by parliament on July 18.


The Land Code B.E. 2497 took effect, in which alien land ownership rights were specified in seven categories.


Field Marshal Sarit Thanarat revoked the Land Code and replaced it with Revolutionary Decree No. 49.


The government signed a treaty to allow citizens of 16 countries the rights to own immovable properties with approval from the
Interior Ministry. The countries were: United States, United Kingdom, Switzerland, Germany, Denmark, Norway, the Netherlands,
France, India, Belgium, Sweden, Italy, Japan, Burma, Portugal, and Pakistan. The treaties were rescinded on Feb 27, 1970 and
there are no longer any international treaties to allow foreign land ownership.


The Board of Investment was established and the government later allowed unlimited land ownership for industrial purposes for
foreign investors under the BoI programme.


An amendment to the Land Code allowed a foreigner to purchase land in Thailand for residential purposes with the maximum of one
rai if they can meet set conditions.

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