Foreign property investments in Por.Bor.Tor.5 land
BREAKING NEWS: THAI REAL ESTATE LEGISLATION
The Crown Property Land Act / The State Property Act has been announced on March 9, 2019 and will be implemented after 120 days. Under the new legislation, the use of certain land will require a lease from the governmental treasury department. Non-compliance is punished with up to five years in prison. Would you like to know more?
The acquisition, maintenance, and sale of Por Bor Tor 5
The Por.Bor.Tor.5 (sometimes misspelled Por Tor Bor 5) is a municipality tax document for a specific plot of land in Thailand. It certifies (together with the official pink tax receipt – Aor.Bor.Tor), that the beneficiary has occupied the land, a tax number has been issued for it and the beneficiary pays taxes for the utilization of the land. The claim document has no Garuda emblem and is issued without any governmental survey. The beneficiary, he might be called caretaker, can’t sell or lease out the land.
The plot is neither registered at the land office nor can a building permit be granted or a blue house book be issued. The legal succession, if the beneficiary passes away, depends on the specific circumstances. However, the beneficiary has the option to apply for a Sor.Kor.1 and later for a land title deed (Chanote). Therefore, the unimpressive claim document can be the source of great richness.
Governmental lease structures on PBT5 land
Under the current government and military policy, PBT5 residents are offered, encouraged or even requested to enter into a long-term governmental lease agreement. The local practice differs from island to island and coast to coast. Also, the current viewpoint might not be future-protected, especially in case of a regime-change due to an election.
Experience shows, that the lease agreements pretty frequently conflict with the PBT5 landscape. Early adopter might take advantage of the ill-informed foreigner. To act swiftly and resolute might protect the foreign investment in paradise. Also, the lease has an impact on so-called villa ownership, on hotel licensing and various other aspects.
Seven conflicting fields in the PBT5 legal practice
#1. The legal character of PBT5 land
#2. Upgrade of PBT5 to Chanote
#3. Transfer and subdivision of PBT5 land
#4. PBT5 and governmental lease
#5. PBT5 and villa ownership
#6. PBT5 and hotel license
#7. Conflicts between PBT5 owners and lessees
Professional service offer from Bangkok
PUGNATORIUS Ltd. is a Bangkok-based specialist provider of bespoke transactional legal and tax advice in the corporate and property legal and taxation industry sectors. The law firm assists clients
- to apply for a Por.Bor.Tor.5 certificate, based on occupancy, tax payments, and certain tasks to take care of the land,
- to defend the Por Bor Tor 5 beneficiary against a loss of his possessory rights to intruders and violators,
- to accomplish a PBT5 due diligence with respect to the likelihood that the land will be upgraded and land ownership transferred to the caretaker under that claim document,
- to establish a legal structure which allows foreigners to obtain PBT5 status,
- to transfer or acquire Por.Bor.Tor.5 (which does not mean to transfer the land) including the land possession, the tax number, and the tax payment obligations,
- to review existing Por.Bor.Tor.5 investment structures whether they are properly designed and maintained to facilitate a later upgrade for the benefit of the investor,
- to apply for and register governmental lease agreements,
- to protect the PBT5 owner against a hostile lease on his land, and vice versa,
- to assist in reporting requirements and tax compliance with the Thai government, and
- to obtain upgraded land rights if the claims mature and the Land Department eventually grants a real title to land, based on the claim certificate.
Por.Bor.Tor.5 rights provide a high risk and high reward instrument to invest in untouched real estate offside of areas of intensive tourism and ecological devastation. However, it requires a careful preparation and a prudential procedural method to secure your piece of paradise.
Assignments on real estate investments are one of the core business activities with a particular competence, long-standing experience, and unique market reputation of the law firm. PUGNATORIUS Ltd. typically provides these seven services:
- Investment structures for foreign property acquisitions
- Property due diligence examination
- Leasing transactions and protected lease schemes
- Industrial estates, resorts, factories
- Hotel and hospitality projects
- Property tax structuring
- Legal opinions and property investment reviews
Details are described at “Legal services and tax planning for real estate acquisitions and property developments.”
Disclaimer: A little knowledge is a dangerous thing. This low-resolution high-level outlook constitutes neither legal advice nor an attorney-client relationship.
Por Bor Tor Ha (Por Bor Tor 5) is just one of the land documents in Thailand. Others are Nor Sor Si (Nor Sor 4) (Chanote), Nor Sor Sam Gor (Nor Sor 3 Gor), Nor Sor Sam Khor (Nor Sor 3 Khor), Nor Sor Sam Khor (Nor Sor 3 Khor), Nor Sor Sam (Nor Sor 3), Nor Sor Song (Nor Sor 2), Sor Kor Neung (Sor Kor 1), Nor Sor Ha (Nor Sor 5), Sor Por Gor, Sor Tor Gor, Nor Kor Sam (Nor Kor 3) and Gor Sor Nor Ha (Gor Sor Nor 5).