Wind back the clock a few years to the height of the property boom and many industry watchers recall the ambitious mega project called The Cove in Krabi.
A mixed use resort development complete with an 18 hole Colin Montgomerie championship golf course, multiple hotels, villas, condos and a marina were all part of the master plan.
During the launch stage the area planning jumped from 400 rai up to 600 rai and then finally 1000 rai.
Despite all the glitz, the project never found its way into the construction phase and parts of the total land parcel reverted to individual partners over the years.
Now CBRE Thailand has come to market with the core 164 rai beach front plot with an auction and minimum pricing of THB1.2 million per rai.
Located in Had Yao beach the site has 200 meters of oceanfront and is titled chanote.
Krabi is starting to develop it's marina business with both Port Takola and Krabi Boat Lagoon (same developers as the Phuket facility) set to debut in the short term, so thing are looking up across the bay.
For more details on the property <link>http://www.cbre.co.th/en/resort-land-l905-had-yao.asp*CLICK</link>
It's Oscar time for Phuket's real estate crowd and the 2011 award event is all set on November 5th at Grand Hyatt Erawan.
During August a special early bid registration fee is THB4,000 saves you THB1,000 over the normal price.
Still the highlight of the property industry's annual calendar in the Kingdom, for more info email – [email protected]
Listed consumer products group Saha are developing a 600 rai master planned community aiming at the Japanese market on Thailand's eastern seaboard.
Located in Si Racha the mixed use project will feature a large retail complex, tourist attractions themed along similar ones found in Japan and a number of other facilities.
The project has a ten year phased development scheme and will be targeting the existing large base of Japanese residents already working within the nearby industrial estates along with generating new demand.
Mai Khao's Anantara Vacation Club are constructing a 100 unit purpose built complex next to their Mai Khao luxury resort.
Comprised of 70 suites, and 30 one and two bedroom pool villas, work is underway with completion set for the end of 2012.
Minor International's AVC business unit is expanding quickly and North Phuket is proving to be a popular sell for lifestyle investors.
Briton Steven James Granville has been released from prison after nearly 18 months , as outstanding criminal charges have been dropped over his involvement in the Purnavarna project in Phuket.
The high profile case of a luxury multimillion dollar luxury estate and ownership of the Royal Phuket Yacht Club in Rawai has been reported widely in the international press.
Investors in the company include a famous Spanish football club.
As work on the villa development have laid idle for a number of years, industry sources say the hotel asset on the transaction market but has failed to sell.
One of the potentially contentious issues for the islands property sector in years ahead is Thailand's Revenue Department plugging the current hole in the dam on tax for rental income of villas and condo properties.
There remains a gray area between what is lawfully required and common practice but on the not too distance horizon compliance will without a doubt become a higher profile issue.
Talking to Phuket-based legal group Duensing Kippen, we have asked them out lay out exactly under existing legislation what tax liability exists –
"Many purchasers of real estate in Thailand are not using their newly purchased home as a permanent personal residence. Such assets are often meant to be used as a holiday home only and are unoccupied for the remainder of the year. One of the ongoing financial burdens of owning a holiday home is the common area fee. Such fee is usually connected to the ownership of such a holiday home and is payable even if the purchaser does not use his asset. In order to "cover the losses" or to receive a return of investment some purchasers are willing to rent out their holiday home for a limited time and therefore "earn" income from their asset. Such owners must be aware of the taxation issues connected to the lease income from such holiday home. This article will discuss the taxation of individuals who own real estate in Thailand and who receive rental income from renting out the property.
First of all, it is important to note that the duty to pay tax on rental income in Thailand does not depend on being a "tax resident" of Thailand or whether you receive the income in Thailand. This fact is often misunderstood. A tax resident of Thailand is "any person staying in Thailand for a period or periods aggregating 180 days or more (…)" (RC Section 41 ). However, rental income is considered taxable income in accordance with Section 40(5) of the Thai Revenue Code ("RC"). And RC Section 41 further states that "[a] taxpayer [i.e. "anyone"] who in the previous tax year derived assessable income under Section 40 (…) from a property situated in Thailand shall pay tax (…), whether such income is paid within or outside Thailand." Therefore, an individual, whether resident or non-resident, has to pay tax on lease income independent of whether the rental income is paid on-shore or off-shore.
Next, the taxable income needs to be defined. The RC allows certain deductions on rental income. According to Section 43 RC in conjunction with Section 5(1)(a) of the RC Royal Decree No. 11 ("RD") expenses may be deducted as follows "[i]n the case of houses, buildings, other constructions (…): if let by the owner, a standard deduction of 30 percent shall be allowed as expenses (…)". The emphasis is on the "owner". Please note that in the case of sub-leasing, and therefore in the common case of a lessee who is under a long term lease arrangement with a developer whereby such lessee is renting out such long term leased property, the 30% standard deduction is not applicable. In such a case, only the rent (pre-)paid to the developer can be deducted as an expense.
Another option for the tax payer to define the taxable income is to procure sufficient evidence of the tax payer's actual expenses. If these are higher than the standard deduction allowed necessary, then reasonable expenses shall be deductible. Note that restrictions on deductibility apply in accordance with the relevant regulations for corporate entities in Thailand.
The amount of tax payable is calculated on a progressive tax scale for personal income tax purposes as follows:
TAXABLE INCOME (BAHT) RATE
0 – 150,000 exempt
150,001 – 500,000 10%
500,001 – 1,000,000 20%
1,000,001 – 4,000,000 30%
4,000,001 and above 37%
The individual tax payer is required to report and remit his income tax using the personal income tax return form PND 91 by the end of March after the year in which the income was paid. Failure to report income can result in an assessment by the Revenue Department. The penalty is equal to the amount of additional tax payable. Further a surcharge of 1.5% per month on the tax payable is applicable.
Finally, it should also be noted that an "additional" category of tax is also payable each time the rent is paid. It is the duty of the payer of the rent who is renting the villa to deduct a "withholding tax" from the rental payment and submit it to the local Revenue Department. However, the owner and recipient of the rental payment is also jointly liable for such withholding tax payment. The amount of withholding tax depends on whether the owner is a tax resident of Thailand and also whether the payer of the rental is a juristic person or an individual. If the owner is not a tax resident of Thailand the withholding tax rate is 15%. The legal status of the payer does not matter if the owner is not a tax resident of Thailand. If the owner is a tax resident of Thailand and the payer is a juristic person, the withholding tax rate is 5%.
Please note that the withholding tax is not really additional taxation on the rental income, but merely a pre-payment of the personal income tax of the owner. The withholding tax will be credited against the final tax payment of the owner. However, if the withholding tax is not paid when the rent is paid, then the owner and recipient of the rental income is subject to significant penalty and surcharge payments."
Here is a piece in from Patrick Lusted from Siam Real Estate on just why travelers are choosing villas over traditional hotels –
"When planning a holiday, location is usually the first consideration. Having chosen your destination, the next decision to make is accommodation. Traditionally, holiday makers would immediately look for hotels, with the idea that they will be the best value for money and provide more facilities. However, in recent times renting villas has become a more popular and flexible option. Imagine a family of five, two parents and three children – in a hotel they would have to book at least two rooms and possibly a parent would have to stay in each room, if the children were small. In this case, the hotel room is simply a place to sleep and not the most ideal situation. Now imagine the same family booking a villa, for the same price as the two hotel rooms. They now all have their own bedrooms, the security of all being together, as well as indoor and outdoor space where they can spend time together. A private swimming pool and garden are a lot safer for children and makes parental supervision easier.
Renting a villa is not only a great idea for families, it works well for couples who like privacy, perfect for honeymooners, or a group holiday. As villas in Phuket are available with two bedrooms up to six or even eight, it is easy for everyone to find a suitable property. Many groups holiday together, from young friends to a few couples, what could be better than sharing the cost of a fabulous six bedroom villa and experiencing the ultimate tropical lifestyle, which other options can simply not offer. A fully equipped kitchen, indoor and outdoor dining areas and lounges, balconies and terraces offer a choice of spaces in which to spend time. Villas in Phuket often have the most stunning locations, are completely private and provide guests with more freedom. Being detached properties means there are no other guests in your personal space and gardens and pools are solely for your use. Some villa developments are designed like resorts with tropical gardens, communal pools and facilities such as spas, restaurants and full management service. Those who rent a villa can choose to be near the busy tourist areas, although usually high above in a prime hillside location, or in quiet areas out of the way, for the most peaceful and relaxing stay. There are villas available all around Phuket, with a location suitable for everyone, near all of the major beaches, inland amongst the jungle or dotted along the picturesque east coast.
Renting a holiday villa also provides the option of self-catering, reducing the cost of dining and eliminating the restrictions of fixed restaurant hours. Some villas provide an in-house chef, who will cook whatever you desire. The majority of villas have security measures, such as guarded entrance gates, CCTV, alarm systems etc for peace of mind. Extra services such as a maid, laundry, babysitting and airport transfer are often available, as are in-villa massage and spa treatments. A villa owner or management will often provide more personalised services and make your stay completely stress free. A car and driver or vehicle rental is often offered and staff can provide ideas of where to go and what to do. Villa rentals have no hidden charges, no 18% tax or service charges and are more flexible with check in/out times.
When looking for a villa to rent in Phuket, using an agent such as Siam Real Estate is not only better for comparison of properties, but also provides peace of mind that your booking is guaranteed. There are so many villas available that a search tool is invaluable, you can choose which features are most important to you, such as number of bedrooms, sea views, proximity to beach or accessibility. There are also offers available such as our early bird discount, up to 25% off the published price for bookings made three months in advance. An agent will deal with the villa owner, making booking fuss free and more convenient without time difference or language constraints."
For more information <link>http://www.siamrealestate.com*CLICK</link>
The Phanason Group has brought a 142 unit project to market on the East coast's Laem-Hin area.
Pricing for the resort style residences aimed at the domestic and midscale sector ranges from THB6.1 up to 18 million.
Some seaview units are available at the Phanason Resort Laem-Hin, and the initial tranche of homes will be completed by year end.
Phanason has developed more than 20 projects over the past ten years in Phuket and Bangkok.
Indonesia's skyrocketing economic growth is propelling discretionary investment in luxury hotel branded villas, according to consulting firm C9 Hotelworks' latest research report – the Bali Hotel Branded Villa Update.
Well known hotel names including Starwood's chic W, Bvlgari, Banyan Tree and Alila adorn hospitality-led residential offerings with 222 private pool villas.
Last year's overseas arrivals to the island grew by 11%, with a new record at Ngurah Rai International Airport of more than three million. A knock-on effect has been felt in the property market with a key generator of demand has been the growth of domestic buyers mainly from Jakarta stimulating transactions across the island.
Branded hotel villa sales in Bali have outpaced regional resort destinations such as Phuket and Koh Samui.
The phenomenon of domestication and local demand for multi-million dollar properties has been historically absent from Thailand's island resorts.
According to a global wealth report by financial institution Credit Suisse, Indonesia has over 60,000 US dollar millionaires in what is Southeast Asia's largest economy.
Currently the hot ticket has been an unprecedented flood into the marketplace by condohotels with between 4,000-5,000 units currently in development or the planning stage.
In many cases the branding or integration with international management companies is a key tool in drawing investment buyers and end users.
As data in the report suggests that strong domestic interest for both smaller villas and condos, that buyers are ultimately looking at holiday usage as a prime transaction motivator.
On the marriage between hotels and real estate non traditional accommodation such as private villas and estates are increasingly becoming a competitive factor in the mainstream accommodation industry.
There are well over 1,000 upscale villas on the island where annual occupancy figures rival those of upscale hotels. Companies such as Elite Havens and the new upstart Marketing Villas Limited headed by former AsiaHotels.com co-founder Jon Stonham are gaining a significant share of luxury rentals.
Looking forward towards sustainable development in the short to medium term, key infrastructure expenditure leading up to APEC 2013 in Bali is setting the stage to stimulate demand in both the hospitality and property sectors.
Most industry experts are cautiously optimistic about Bali going forward.
Maintaining market equilibrium remains a poignant, yet unanswered question. At the back of my mind lagging infrastructure and future oversupply will most likely create volatility.
To download the full report <link>https://c9hotelworks.com/downloads/Bali-Hotel-Branded-Villa-Update-Market-2001-07.pdf*CLICK</link>
