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A haven to come home to

Mark Armsden

Thailand boasts an array of attractive incentives for retirees to consider it as a destination to live when their working days are finished. The key factors are the country's low cost of living, the range of lifestyles available - whether they be island, beach or suburban - and a multitude of accommodation options.

Another lure of Thailand for retirees is the world-class medical facilities also available at a fraction of the cost normally found in their homelands. But the main pull is that a retirement nest egg built up over many years working in another country will go a lot further, not just in the purchase of a property, but also in day-to-day expenses.

Thailand has for many years marketed itself to the retirement market but with various caveats. One of these is that the person, if over the age of 50, has to bring a sizeable chunk of their wealth into the country and prove that they receive regular monthly instalments into their Thailand accounts to sustain themselves.

This brings valuable foreign currency into the country, and proof of having these funds onshore is a key component of renewing the annual retirement visa.

Rene-Philippe Dubout, managing partner at Rene Philippe Attorneys & Legal Counselors, has just published a book called How to Purchase Real Estate Offshore Safely: The Case of Thailand.

He says that when buying a home in Thailand, it is vital to know where you stand legally, and foreigners cannot buy land in the country except when they have invested at least 40 million baht (HK$8.7million), and the purchase price of the land and house is not included in the amount invested. Secondly, the money invested must consist of an investment beneficial to the Thai economy, promoting social welfare, or promoted by the Board Of Investment. Finally, the money must be invested in Thailand for a minimum of three years.

'Using a lawyer is not always necessary, but the advantage is that a lawyer will facilitate the process,' Mr Dubout says.

David Simister, chairman of CB Richard Ellis (Thailand), believes the retiree market in Thailand is not dominated by the conventional retiree, but by a number of 'active retirees' who lead a global lifestyle. 'This group chooses to purchase in Thailand and may only spend several months in a year in the country. There's also a number of Europeans who purchase a second home to spend part of their time during the European winter months in Thailand.'

But Mr Simister adds that Thailand is popular with this market sector. 'Thai properties have so far maintained their value with minimal discounting and distressed sales, unlike Singapore and Hong Kong where property prices have dropped notably.

'Those looking to invest may find that other markets are offering better discounts. However, purchasers choosing Thailand as their retirement destination tend to choose it because of the lifestyle that Thailand offers, not because it offers the highest yield or the best return on investment.'

One such retiree, who recently moved into a new house in Chiang Mai, in Thailand's north, is 60-year-old David Jamieson who moved to the city in 2007 with his wife and two sons. He and his family started building a Lanna-style home on the outskirts of Chiang Mai. The first pile was driven into the ground in August 2007. The main house and two other buildings - garage, workshop, cold room, nanny's quarters and guest house - are expected to be completed this month, with a building for raising pigs and fowl.

'Including the cost of the land ... I do not expect much change from 20million baht,' Mr Jamieson says. 'The cost of construction was 7,200 baht per square metre, where we pay for fixtures such as roof tiles, wood flooring, windows and all wooden fixtures, floor and wall tiles, bathroom fixtures and all electrical appliances including sockets and switches, while the builder pays for concrete, steelwork, building and cleaning up.'

While building his dream retirement compound, it was not always plain sailing. Mr Jamieson encountered some challenges along they way, but with patience and a hands-on approach, he worked through the issues.

'Several incidents occurred when, for lack of listening or lack of attention, problems arose,' he says. 'I think especially about two 58,000-baht water tanks - designed for use above-ground - were carefully installed in the ground, and lo and behold, two days later, both had imploded under the earth's pressure. I gently chided the builder through an interpreter friend and we reached an agreement for a replacement concrete tank.

'If one can find someone sufficiently humble not to know it all and be prepared to listen to one's needs, you are on the right track, but a strong dose of diplomacy also helps,' Mr Jamieson says.

'Understanding the Thai legal system is not easy because the Thais do not want to disappoint you and will tell you what you want to hear. One needs a competent lawyer, and even then it might be better to double-check the veracity of the situation.

'We used a local builder recommended by a friend for whom he had built two houses, and we have been extremely fortunate. One hears numerous horror stories and we crossed a few names from our list before finding Mr Right.' Despite these challenges, Mr Jamieson is happy he chose Chiang Mai as opposed to other traditional locations in Thailand, such as Phuket, Pattaya, Hua Hin and Bangkok.

'The golfing facilities here are remarkable with beautiful courses and very reasonable rates,' he says. 'There are any number of activities, such as yoga, swimming, making friends with elephants, to occupy the day. I have spent the past 21/2 years arranging two Sanskrit manuscripts that I wrote back in the '70s and have had them printed here in Chiang Mai, and I am selling them on the internet and a few specialist bookshops around the world.'

Chiang Mai may not be everyone's idea of a retirement destination in Thailand as most people equate the country with beaches and islands, but there is a growing number of expatriates who are also leaving the more populated areas of the country behind for a quieter life in the northern capital.

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