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Confusion as condo owners told they must have a work permit to rent out units

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Confusion as condo owners told they must have a work permit to rent out units

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PHUKET:-- Just over a week after condo owners were told they face jail and hefty fines if they rent out their units for less than 30 days, one condominium in Phuket has taken the step of informing its condo owners they need a work permit if they want to rent out their units.

Following consultation with lawyers, juristic staff at the Phuket Palace Condominium in Patong claim the Ministry of Labour has confirmed that condo owners who rent out their units require a work permit. They say this is because money is exchanged for the rental of the unit. They also claim that the proper taxation must be paid to Patong municipality.

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The notice reads: “the Ministry of Labour confirmed that the owner must have a work permit because there is money in exchange for rentals and proper taxation must be paid to Patong municipality too.”

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We must stress that Thaivisa has been unable to verify the claims made in the notice which is dated June 29.

It comes at time when many foreign condo owners in Phuket and throughout Thailand are confused and concerned regarding the legality of them being able to rent out their condos for periods of 30 days or less.

On Saturday July 2nd, the Phuket News reported that Phuket’s Provincial Land Office issued a formal warning to condo owners, developers and managers that renting out their properties on a daily basis was in breach of Thailand’s Hotel Act and that they could be fined or even spend up to one year in jail.

The notice read:

“To managers/developers of condominiums,

“Today, there is a lot of news about condominium developers/owners renting out rooms or buildings that they have ownership of to foreigners or tourists on a daily basis (daily rental) rate that generate income as if they were a hotel (under the Hotel Act 2004).

“This type of operation is causes a public nuisance for renters in the same complex and creates unsafe places for tourists, which may lead to loss of life and property. It is inacceptable to operate an illegal hotel. The penalty for this is up to one year in jail or a fine of up to B20,000, or both.”

The crackdown on condo owners renting out their properties was then confirmed by Phuket Vice Governor Chokdee Amornwat, the Phuket Gazette reported on Tuesday.

It is not only the authorities in Phuket which have issued warnings to property owners about renting out their condos illegally.

In May, local government officials raided residential villas and condos in Pranburi, south of Hua Hin, which were suspected of renting out rooms and operating without a hotel license.

According to local business operators, it was part of a crackdown on illegal hotel accommodation properties, reported Bill Barnett from C9 Hotelworks.

Thaivisa also understands that a similar warning about renting out rooms for less than 30 days and, as far as the authorities are concerned operating illegally as a hotel, have started to be issued to condo owners, developers and managers in Bangkok.

The move to get tough on people renting out condos follows complaints from hoteliers across Thailand who claim that many condo rooms are actually being used illegally as resorts and hotels.

Despite a record 30 million tourists visiting Thailand in 2015, occupancy rates in hotels across Thailand have been in decline for a number of years.

A report published in 2015 by hospitality consultants Horwath HTL in collaboration with the Thai Hotels Association revealed that hotel occupancy rates in Thailand had declined by 15 percent.

More recent data from C9 Hotelworks also revealed that hotel occupancy across Phuket continues to decline.

It is thought the emergence of sites such as airbnb, which enables people to rent out their properties as vacation homes could be pose a major threat to hotels not only in Thailand but globally.

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-- 2016-07-09

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Can anyone confirm or deny the statement that units bought under the foreign quota (I'm assuming that's the 49%?) can only be purchased for personal dwelling? And does that mean the personal dwelling of the owner only- i.e., not for rent to others?

That would put quite a wet blanket on some of my foreign coworkers who own multiple condos for rental income...

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I think most of us would agree the climate is not great, but the country is great. with that said, I recommend to ONLY rent. I don't think the climate will get better for decades. if you own a condo and can sell, I would.

let's not kid ourselves, these rules are going to get worse, not better.

but LOS is still a great place to be..

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Confiscation if the owner disobeys. That's the worst case scenario. Everything is possible in the current climate...

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Im curious is that a work permit for renting under 30 days only ?

edit

Yes it appears this applies only to sub 30 days.

Makes sense to me, well done indeed

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So, a foreign Phuket condo owner is sitting in their house in the UK, Europe, America etc, and places their condo on AirBnB.

A tourists books the condo for 2 weeks, and forwards AirBnB payment.

AirBnB forward payment to the condo owner's foreign bank account, minus commission, and the foreign condo owner is "working" in Thailand and needs a work permit. cheesy.gif

Phuket continues to embarrass itself on the world stage.

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So, a foreign Phuket condo owner is sitting in their house in the UK, Europe, America etc, and places their condo on AirBnB.

A tourists books the condo for 2 weeks, and forwards AirBnB payment.

AirBnB forward payment to the condo owner's foreign bank account, minus commission, and the foreign condo owner is "working" in Thailand and needs a work permit. cheesy.gif

Thailand continues to embarrass itself on the world stage.

Cant see how he can control nightly rentals on Air BNB. You need to be there to welcome them , give them keys and help with tourist questions , these people are needy. I used to rent a place out in Bangkok monthly only and that was a pain the arse and I was in the country! No way he will be using Air BNB from OS. He would be looking for minimum 1 year rental and an agent to manage busted air con unit or fridge etc

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Im curious is that a work permit for renting under 30 days only ?

edit

Yes it appears this applies only to sub 30 days.

Makes sense to me, well done indeed

Yes, it's all a bit overly dramatic.

It is for people renting out their units on places like airbnb as generally using the unit as a holiday hotel/apartment, thus taking away customers from the real hotels and apartments. The Thai don't accept foreign foreign competition on their soil. biggrin.png

Unless you're illegally using your unit as a short-term holiday rental, you're fine.

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let's not kid ourselves, these rules are going to get worse, not better.

I get the sense that we as western foreigners are just collateral damage in the first few rounds of whack-a-mole against Chinese money coming in and dominating some key Thai markets.

We've been reading for years about illegal Chinese tour guides and photographers. Last week, we read about Chinese owning dozens (hundreds?) of tour buses and tourist boats through nominees. This weekend, there's more news about Chinese investors crowding the entrenched Thais out of the fruit market. I suspect this recent push against short term condo rental is directed more against a massive influx of Chinese money into the illegal, but tolerated, rental market.

Western competition has always represented a nuisance, mostly to lower level entities- because most are simply looking for a way to fund their long stay Thailand adventure.

The massive influx of Chinese money and influence represents an existential threat to the entrenched powers because they have the resources and the experience to disrupt the status quo. It seems the powerful in Thailand are just waking up to it.

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Im curious is that a work permit for renting under 30 days only ?

edit

Yes it appears this applies only to sub 30 days.

Makes sense to me, well done indeed

Yes, it's all a bit overly dramatic.

It is for people renting out their units on places like airbnb as generally using the unit as a holiday hotel/apartment, thus taking away customers from the real hotels and apartments. The Thai don't accept foreign foreign competition on their soil. biggrin.png

Unless you're illegally using your unit as a short-term holiday rental, you're fine.

Yep and its always been the law, nothing new except its being enforced so no surprises

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In this topic...

Two different laws here.

1 - A work permit is required for all rentals.

2 - A hotel licence is required for sub 30 day rentals.

Just because this letter referenced in the OP states the 30 day rule regarding rentals does not mean that all the prior paragraphs don't apply in that scenario.

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In this topic...

Two different laws here.

1 - A work permit is required for all rentals.

2 - A hotel licence is required for sub 30 day rentals.

Look at the last paragraph of the letter in post #1 30 days and up is exempt

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You're making a big assumption that the last paragraph is intended to act as an exemption to everything mentioned prior to it. I do not believe it is - it is simply stating that rentals are not allowed at all for less than 30 days.

The post I linked to states that any renter, Thai or not, requires a hotel licence to rent for less than 30 days. To get a hotel licence I expect one must be a Thai Co.

That's my interpretation of these two bits of information anyway.

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So, a foreign Phuket condo owner is sitting in their house in the UK, Europe, America etc, and places their condo on AirBnB.

A tourists books the condo for 2 weeks, and forwards AirBnB payment.

AirBnB forward payment to the condo owner's foreign bank account, minus commission, and the foreign condo owner is "working" in Thailand and needs a work permit. cheesy.gif

Thailand continues to embarrass itself on the world stage.

Cant see how he can control nightly rentals on Air BNB. You need to be there to welcome them , give them keys and help with tourist questions , these people are needy. I used to rent a place out in Bangkok monthly only and that was a pain the arse and I was in the country! No way he will be using Air BNB from OS. He would be looking for minimum 1 year rental and an agent to manage busted air con unit or fridge etc

From what I have read, many condo owners doing this use the services of the onsite property manager (Thai) to arrange handing over the keys and cleaning the room, and/or, an agent (Thai).

The property managers and agents have full knowledge of what is going on.

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