Rights and Taxes in Leaseholds
This is mainly the issue of rights and taxes in Leaseholds. As stated elsewhere that having a leasehold agreement with your Thai wife is simply a bad idea and you should be looking at a usufruct or superficies in order to have a much sounder legal footing in Thailand. Always speak to a property lawyer in Thailand. If you are wanting to stay long term with some type of security to having a roof over your head.
Rights and Taxes in Leaseholds
The rental income from property is subject to taxes either as corporate income or personal income. If the entire amount for the lease is paid for the maximum period of 30 years. Then you are going to be paying taxes on a lump sum when you receive the money. You will have to take proper advice from a lawyer in Thailand as well as a tax consultant in this situation.
There may be those who think that a lease can be done without paying any money however under Thai law the payment or rent no matter how small is an essential part of the lease agreement. If there is no payment then it is not a lease agreement by definition as stipulated in the Civil and Commercial Code.
Section 537. The hire of property is a contract … use or benefit of a property for a limited period of time and the hirer agrees to pay rent therefore.
The provision for Hire of Property would not be applicable as you would have to look at a usufruct. This or a right of habitation if you wanted better options available and still be covered by the law. You would need to take proper legal advice in this regard if you are looking at a lower payment or no payment option. Unlike other options such as a right of habitation. The usufruct or superficies there is no option for a nominal payment of 1 THB. The leasehold agreement fees the Land Office will look at the appraised value of the property and asses the rental agreement from there. The rental fees would have to be market related.
Thailand has a maximum number of years for a lease agreement which is 30 years. If the Land Department consider that the agreement is not in line with this then they can refuse to register the lease agreement. They will see if there are clauses in the agreement which would void the agreement. These could include clauses such as “there will be no further payment on a lease renewal”. These types of clauses cannot be enforced. They will not register these types of “daisy chain agreements” against the title deed.
Sub-leasing is another issue which is covered by the law. You need to consider this. If you did not include this in the original contract then changing it later will present its own problems.
Section 544. Unless otherwise provided by the contract of hire, a hirer cannot sublet or transfer his rights in the whole or part of the property hired to a third person.
So if you are going to lease commercial property. Then you need to take this into account in the event that you wish to sublet part of the floor space in the building to someone else. The following Section 545 covers this and you are best advised again to contact a property lawyer in Thailand. When leasing property, especially commercial property.