Phuket Government Hits Illegal Condo Hotels

Back of a rising tide of complaints across the country from the Thai hotel sector and more recently  the Revenue Department, the Phuket Land Office has reportedly issued warning letters to a number of condominiums across the island.

According to The Phuket News (click to read the story), the underlining letter contains the following-

“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.”

In the past the Thai Hotel Act has been revised back in 2004 to cover the serviced apartment sector which has seen a proliferation of abuse by properties circumventing the law and renting units nightly, whereas the waiver for a hotel license was rentals of 30 days or more.

Now condominiums are under the same scrutiny and the current administration’s push on taxation across all sectors is certainly a leading proponent .If you drive around Phuket you will see a number of billboards for projects offering guaranteed rental returns via hotel-type offerings despite most not having obtained licenses. It’s understood that villa rentals are also under the microscope as well.