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Friday, 2 May 2008

Latest News from Koh Samui

Let me deal with the Rumours first! Last month I carried two articles from the Samui Express. One stated that the application for Koh Samui to be upgraded to City Status had been sent to the Provincial Government for approval. The second stated that the Governor had sent the application back without approval. Well, the latest rumour is that it has gone back to Provincial level and that “an up grade in status” is expected within two months. Now my understanding of the requirements for City Status (Thesaban Nakhon) is that it must have a population of 50,000 and a density of 3,000 per sq. kilometer. Samui has an area of 247 sq. kilometers which means the density is only 202 per sq. kilometer with the recent increase in registered population to exceed 50,000 so less than 10% of what is required. I suspect this is the reason that the Governor found to send back the application as it is generally agreed that Suratthani Province do not want to lose the income generated by Koh Samui. However, this is Thailand and there is usually a means to an end. Maybe they have found a way to “adjust” the requirements, or make the facts fit the requirements. The other alternative is that they may be going for a “Special Economic Zone” much like Pattaya, although I believe that would require Government Approval. Whatever, something seems to be on the cards and we must wait and see what transpires. Watch this space!

Phuket is also complaining about lack of funds to expand its infrastructure to keep up with development and the present Prime Minister has suggested setting up an executive board to speed up development. The proposed board would end the problem of provincial officials having no authority to make decisions on important matters and depending on directions from Bangkok, said the prime minister. There has been a lot of local opposition to this and one critic stated - "I disagree [with the idea] if it interferes with 19 local administration agencies in the province and if it is set up to serve political purposes," The academic, who is an expert on power decentralisation, also suggested the government conduct a study about turning Phuket into a special administration zone like Bangkok and Pattaya. I wonder where he got that idea from!

Good news for real estate is that the Government has reduced taxes on transfers and the Press Release from the Revenue Department is copied below. The main reductions are for the Transfer Fee which has been reduced from 2% to 0.01% and for Specific Business Tax which has been reduced from 3.3% to 0.1%. Also the first Baht 150,000 of Personal Income Tax is now exempt and with regard to real estate this affects the first Baht 150,000 of the calculated gain on re-sale. This is a slightly complicated area which I will not get into in the Newsletter but nevertheless reduces any potential tax on re-sale.

There is a move (starting in Bangkok apparently) to enforce more rigorously the helmet law for motorcycle riders which would now include the passenger and the helmet has to be of International standards. I think we all know that the law in Thailand in one thing and enforcement another, but for those of you who chose not to wear a helmet (not sensible, but all too frequently seen here) the fine will be Baht 500 EACH if the BIB on the island decide to go along with their Bangkok colleagues. Another law due to be enforced from 1st May is the smoking ban in bars and restaurants. Designated smoking areas are required and if the Bangkok experience is anything to go by this means outside. Fines for non-compliance are Baht 2,000 to the customer and Bang 20,000 for the owner.

For the sailors amongst you the Seventh Koh Samui Regatta will be held next month between the 1st and 7th of June.

If you want to receive the full Ko Samui Properties Newsletter on a monthly basis please email me at hbonning@kosamuiproperties.com

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