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Why Have a Koh Chang Real Estate Section on
This Site?
The answer is simple, I've seen the
prices some people pay for land on Koh Chang and I can't believe that people have that
much money to burn. True, finding a small plot of land for a house or
small resort is very hard but buyers who rush in and buy land from a smooth
talking agent are asking to have their wallets emptied. Far better to
take you time in order to find something suitable.
Skip this
introductory stuff and go to the property listings
Housing Developments on Koh Chang
Until early 2006 there were no housing
developments of any kind on the island. The choice was buy land and
build your own house or buy an uninspiring roadside shophouse. That
all changed with the arrival of Siam Royal View in Klong Son Bay at the
northwest of the island. This was soon followed by Tranquility Bay
Residence condominiums in the south of Koh Chang near Bangbao and a couple
of smaller developments, Baan Talay Thai on the east coast ad The Edge
Village, also in the Bangbao area. The first housing development,
comprising teak wood villas, on Koh Mak was established in mid-2006 and has
proved to be very popular with people looking for a island hideaway. From
August 2007, more luxurious pool villas will also be for sale on the island.
Down on Koh Kood, the six star Soneva Kiri Resort will have luxury villas
for sale when it opens in 2008 . . . but don't expect much change from US$6
million for your dream house here.
Land For Sale
We find land either by simply going out
and speaking to the locals. They still sell land by word of mouth, finding a
roadside sign advertising a small plot of land is still a rarity. My Thai
partner, Mam, does all the talking and
speaks to the owners, explaining that we'll advertise their land on this
website. Most people know what a website is and that it's
somehow related to "the internet". As such they aren't too sure how it
works, but they know lots of foreigners use this "internet" thing,
so it can't be a bad way to sell land.
What we don't do is increase the asking
price and try in order to rip off buyers. There are too many people
doing this on Koh Chang already. Therefore, anyone interested in buying land will
always be able to meet the land owners and negotiate direct. The price on the site is the price the owner has asked for,
we don't inflate it. But obviously we get commission - I'm a nice guy
but not a charity. This is almost
always 3% which is the standard rate in Thailand.
The locals are fountains of knowledge
and know what's being planned for Koh Chang. Basically, don't get
fixated on having to buy something on the west coast, there are other
options in the east coast and south-east if you're thinking long term and
prefer to be in a quieter area.
Land Prices
It's also worth mentioning that prices on the west coast have
already boomed so, in general you're looking at 7 million baht/rai by the roadside, and up
to 15 million baht per rai for Chanote
titled land by the beach.
More if you only want a small plot. However, there are areas such as
the inland valley in Klong Son at the north of the island where titled land
can be found for 2-3 million baht/rai.
Koh Chang is still extremely
undeveloped when compared to other large islands such as Samui or Phuket.
Phuket's development began 30 years ago, Samui's over 20 years ago, but Koh
Chang's only began in earnest four or five years ago.
One reason for the lack of development
was the island's lack of infrastructure, such as roads. Mains water is
still a pipe dream, if you'll excuse the crap pun, and phone lines have only
recently
been installed along the west coast of the island.
Koh Chang will never attract the number
of visitors Phuket or Samui do simply because of the lack of land that's
available for building, 80%+ of the island is mountainous National Park.
However, it's location is pretty good - only a 4 hour drive from Bangkok, 3
hours from Pattaya and an hour from the Cambodian border.
Having woken up to this conveniently
located but forgotten island, the number of new resorts, restaurants and
bars has been growing exponentially and if some constraints can be put on
what is built then the island will definitely become a new package tour
destination for holidaymakers who are looking for an alternative to the
islands in the south of Thailand.
This means that for anyone looking to
open up small resort, tourist related business or simply trying to
find nice place to live Koh Chang has a lot to offer but, due to the
lack of available land etc, prices can be very high.
Certainly, land prices on the island
have risen faster than they would have without the intervention of
speculators. For example, ten years ago a family from Trat bought half
a beautiful beach, about 20 Rai, for 320,000 baht in total. The land
hasn't been developed at all and is still very inaccessible, but they've had
offers of 5 million per Rai which they've refused. Smaller scale, 5 years
ago a local sold all his beachfront land, about 4 Rai, on the east coast for
300,000 baht. One Rai in this area is now around 4 - 5 million baht.
We bought and renovated our fisherman's house in Klong Prao for well under a
million baht three years ago and have had people offer several times
that for it - we'll be selling in the future, but not just yet.
A Thai friend
bought his 3 Rai of land roadside in Klong Prao for 450,000 baht about 6
years ago and built a handful of bungalows and a pool on it. Several
people have offered between 15 - 18 million for it in the past year and all
been turned down. And in 2005, I had an 8 Rai plot of land by the
east coast shore on the site for sale for 1.5 million/rai. 12 months on, the
new owner has filled it in, ready for building and it's for sale for 3
million per rai.
Obviously prices can't continue to rise by hundreds of
percent, but they will continue to rise as Koh Chang attracts more attention
internationally. (Currently Koh Chang only receives about 10% of the
tourists annually that Samui or Phuket do.)
If you've made the decision to do
something on Koh Chang, other than spending a week by the beach, you need to
think about what you'd like to do and whether you will buy or rent land
and/or property. Renting is by far the simplest and most common option
and the one requiring least initial outlay. However, there
is one main pitfall that is overlooked by almost everyone that I've come
across & I'll get to that on the Renting page.
There are a few basics that you should
know before looking at any real estate for rent or purchase. These are
the way land is measured in Thailand and the types of deeds that are used.
Land Measurements
All land in Thailand is
measured in talang wah, ngarn and rai.
1 talang wah = 4 square
meters
100 talang wah = 1 ngarn
or 400 square meters
1 rai = 4 ngarn or 1,600
square meters
Another
way to look at it is that:
1
acre = 2.5 rai
1 hectare = 6.25
rai
Builders will work on the metric system and metres are always used in the
measurement of building area and dimensions but prices for land are always given in baht/square rai or for smaller or very expensive plots of land, in baht/ square wah.
Land
documents
A 'Chanote'
(Title Deed) is the
best form of evidence that an individual owns a piece of land. However, title
deeds
are given only for areas of Thailand which have been surveyed accurately.
For all other areas documents that indicate the possession of the right to
utilise the land are used. If you are looking to buy land to use for
anything other than agricultural purposes then the three land documents
you'll be looking out for are:
Chanote - A freehold title which is registered with the
Land Department in the province in which the land is located, and there is
no waiting time required to transfer title. Chanote titles are accurately
surveyed, plotted in relation to a national survey grid and also marked by
unique numbered marker posts set in the ground. The land is also able to be
subdivided and resold as smaller plots. Needless to say land sold with
a 'chanote' is by far the most expensive.
Nor Sor Sam Kor
- This certifies that the person named on the certificate has the
confirmed right to use the land, implying all requirements for the issuance
of title deed have been met, and issuance of the title deed is pending. (
How long it takes to convert the N.S.3 K. into a Chanote title is up to he
local government, maybe 12 months maybe a few years. This land may be sold,
leased, used as mortgage collateral etc and also subdivided.
The
Chanote and the
Nor. Sor. Sam. Kor. are the only titles over which registerable right of
ownership or lease can exist. Your lawyer will always advise you to
buy land with one of these titles.. However, there is one more title that is worth
considering:
Nor Sor Sam
- Similar to the above except that not all of the formalities to certify the
right to use have been performed. Before a transfer can be made, a notice of
intent must be posted and then 30 days public notice is necessary before any
change of status over the land can be registered.
Agricultural land
Any land that is
offered at a dirt cheap price is unlikely to have any of the titles above.
It will almost certainly have one of the other forms of land document which
are basically a confirmation of squatter's rights. You can farm this
land but cant build anything other than a house on it. On Koh Chang, land claim
documents go by the names: Sor. Kor. Nung (S.K.1). or Por. Bor. Tor. Ha.(P.B.T.5.). You cant register the sale
or lease of these land rights, banks wont accept them for collateral and most importantly
you cannot apply to (or obtain approval in writing) build on the land.
BUT . . .
It's important
to note that this doesn't mean that you won't see any houses, restaurants,
shops etc built on Por Bor Tor land. You will see a lot, all of them
built with the full knowledge of the local planning officials. It's one of
those grey areas. Yes, technically you can't build anything.
However, in a real world situation, you submit your plans and can build a
house without any problems or hassles from the planning authorities.
On Koh Chang virtually every plot located on the left hand side of the road
as you head south from White Sand Beach to Bailan has a Por Bor Tor title.
However, these land claim 'titles' do get upgraded (to N.S.3.K or Chanote
title). This is something that
is being done now on Koh Chang. Anyone with S.K.1. titled land
can apply for it to be upgraded, a process that will take around 6 months.
Other titles are upgraded at the whim of the local officials. Officials have been out and
about surveying land in order to issue upgraded land documents. So if
you are willing to be patient buying agricultural land which has been
surveyed for an upgrade will pay off handsomely a soon as an N.S.3 is
issued and it's market value increases tenfold.
So, if you
want a guarantee of a hassle free life, want to be 100% legitimate, you buy
Nor Sor 3 Kor or Chanote land . . . but pay a premium price.
If you're
thinking long term, for the upgrade of land titles, or are happy to do what
Thais do and just want land for a house, (and also have an understanding of
how Thailand differs from western countries when it comes to the acceptance
of bending rules etc) then consider Por Bor Tor land.
Taxes
Even
Thailand has taxes on land sales you'll be sad to hear. Exactly who
pays these taxes - the buyer or the seller - is entirely up to the two
parties to negotiate, the taxman doesn't care so long as someone pays.
Commonly the taxes are split 50:50 between the two parties, however it can
pay to include the payment of taxes in with the negotiations on price.
The four taxes are:
1) Land
registration (transfer fee) - 2% of assessed value (** Temporarily,
from April 2008, 0.01% - until April 2009, as an incentive from the
Thai Government to boost house sales)
2) Stamp
Duty - 0.5% of assessed value or sales price, whichever is higher.
3) Specific
Business tax - 3.3% of assessed value or sales price, whichever is higher.
Only applicable on a company sale/purchase not a private sale.
4)
Withholding
Tax - calculated using a complex formula but should be around 2-3% of the
assessed value.
More about
Renting,
Buying, Building
and Land for Sale
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