Steps a condo developer must complete before transferring ownership of condominium units

Why follow the sequence

Condominium development in Thailand is governed by several laws at once: the Condominium Act 1979, the Building Control Act 1979, the Enhancement and Conservation of National Environmental Quality Act and the Consumer Protection Act. Skipping any step does not merely cause delay; it can make it impossible to register the transfer at all.

This article sets out the work from before sales launch to unit-by-unit transfer day, together with the financial issues that executives and accounting teams often underestimate, especially Specific Business Tax (SBT).

A. Before sales launch and during construction

1. Ownership of the project land

The developer company should hold the title deed in its own name and check for encumbrances that would affect buyers. If the land is mortgaged to a bank providing project finance, the partial release mechanism must be agreed clearly: how much of the sale proceeds of each unit must be repaid to the bank before the mortgage on that unit is released, so that buyers receive their transfer free of encumbrances.

2. EIA

A condominium that meets the criteria under the Ministry of Natural Resources and Environment notification, which in practice means 80 units or more, or total usable area of 4,000 sq m or more, must prepare an EIA report and obtain approval from the Expert Review Committee. Check the project's specific criteria and area against the notification currently in force.

3. Building permit (Or. 1)

Apply to the local administrative organisation under the Building Control Act, attaching plans certified by a licensed architect and engineer. The permit's validity is as stated on the permit (generally 1 year) and it can be renewed.

4. Booking agreements and sale and purchase agreements (SPA)

The relevant law has several layers. Have legal counsel review the latest contract form before it is used.

As far as we have checked, we found no fixed percentage ceiling on booking deposits or deposits for condominium unit sales. However, setting a large amount that is forfeitable in full carries risk and should be checked against the full text of the notification. A typical instalment structure seen in the market is: booking deposit 1–3%, contract deposit 10–15%, construction-progress instalments 30–40%, and the remainder paid on transfer day. These figures are examples of practice, not legal thresholds.

B. Project-level work before transfer

This group of tasks is the bottleneck for the whole project. Errors will affect the transfer day of every unit at once.

1. Construction completion and construction certificate (Or. 6)

When construction is completed in accordance with the permitted plans, the developer applies to the local official for a certificate. This certificate confirms that the building conforms to the permitted plans and is a key document for condominium registration.

2. Condominium registration (Section 6)

This is the point at which a building becomes a condominium in which each unit can be owned separately. The developer files at the land office with the title deed, permit documents, plans and the schedule of ownership proportions. Once registered, a condominium unit title certificate (Or. Chor. 2) is issued for each unit.

3. Condominium juristic person and regulations

Under the condominium juristic person chapter of the Condominium Act, the condominium juristic person must be registered and its regulations prepared. These set out the rights and duties of co-owners, the use of common property, alterations and the collection of common expenses. The developer should check the statutory deadlines and convene a co-owners' meeting to elect the manager and committee as required by law.

4. Ownership proportions, sinking fund and common charges

Ownership proportions in the common property are set according to legal criteria and are the key basis for common charges and voting rights. They should be calculated correctly from the registration preparation stage.

Examples of rates seen in the market: a one-off sinking fund of 500–700 THB/sq m and common charges of 40–80 THB/sq m per month, collected 1–2 years in advance. Actual rates depend on the regulations and the nature of the project.

C. Controlling the foreign quota

1. A register to keep the foreign share within 49%

Section 19 bis of the Condominium Act limits the total area of units that foreigners may own to no more than 49% of the total unit area in that condominium, measured by area, not by number of units. Section 19 sets the qualifications of foreigners who may hold ownership. Proposals to raise the cap are not law in force as of the date checked.

The control register should record the unit code, area, cumulative area sold to foreigners and the percentage against the cap. Before transferring a unit to a foreign buyer, reconcile the figures with the land office's data and with a quota confirmation letter from the condominium juristic person, as required by the local land office.

2. Evidence of funds brought into Thailand

A foreign buyer relying on Section 19 must have evidence that foreign currency was brought into Thailand to pay for the condominium unit. Generally this is a Foreign Exchange Transaction Form (FET), which the bank issues for transactions of USD 50,000 or more. For lower amounts, a credit note with a bank certificate may be used. The buyer's name, amount and purpose should match the transfer documents.

The developer should have the contract state that presenting complete evidence is a condition of transfer, and should review the documents 7–14 days before the transfer appointment.

D. Preparing unit-by-unit transfer

Medium to large projects should have an SOP, because transferring dozens of units a week is normal when a project completes.

1. Unit inspection and snag list

Schedule an inspection with the buyer before transfer, prepare a list of defects and fix them before transfer, or agree in writing the timeframe in which they will be fixed.

The Contract Committee Notification 2000 sets liability for defects in the structure and fixtures at 5 years and for other parts at 2 years, counted from the registration date. Check against the contract form actually used. The developer may specify that minor defects that do not affect habitability are not grounds for postponing the transfer, but this must not conflict with the contract form or reduce consumer rights.

2. Clearance certificate from the condominium juristic person

Registering the transfer requires a certificate from the condominium juristic person confirming that no common charges are outstanding on the unit. In a new project, the accounting team should match the collection of advance common charges and the sinking fund with the issue of this document, so that no outstanding liabilities build up in the juristic person.

3. Transfer appointment and company documents

• A company affidavit that has not expired, as required by the land office
• List of shareholders, power of attorney and the attorney's documents
• The original condominium unit title certificate and, if applicable, the mortgage release letter
• Clearance certificate and the per-unit tax schedule
• Book a slot 1–2 weeks in advance, especially at month-end or quarter-end

E. Transfer-day taxes and fees

Temporary fee reduction measure: according to news reports, the transfer fee and mortgage registration fee are each reduced to 0.01% until 30 Jun 2027 for qualifying transactions, for example Thai-national individual buyers where both the price and the appraised value do not exceed THB 7 million. Check the full announcement unit by unit.

The sequence that cannot be skipped

1. EIA (where the thresholds are met)
2. Building permit (Or. 1)
3. Construction completion certificate (Or. 6)
4. Register the condominium and issue ownership certificates for each condominium unit
5. Register the condominium juristic person
6. Ownership transfer, unit by unit

Delay in registering the condominium is a major reason developers miss the transfer deadline, and they may become liable under the contract, for example for penalties or refunds. The programme should therefore include a buffer for official documents.

SBT 3.3% in depth

1. Legal basis

Section 91/2(6) of the Revenue Code and Section 4 of Royal Decree No. 342 (1998) treat the sale of real estate as a trade or for profit. The sale of condominium units by the party that registers the condominium falls squarely within this, so developers do not need to look at the land holding-period test.

2. Why developers do not get the 5-year exemption

Even if the land was bought more than 10 years ago, selling units as the condominium registrant still incurs SBT. Individuals who have held the property for more than 5 years, or who meet the house registration conditions, are generally outside SBT and pay stamp duty of 0.5% instead.

3. Worked example

4. Common mistakes

• Using the appraised value as the SBT base when the selling price is higher, which leads to an under-sized reserve.
• Setting prices from Land + Construction + Margin without deducting SBT before calculating the margin.
• Not separating the sale of furniture, which is a separate item of goods, from the sale of the condominium unit, even though they are taxed under different systems. Any price split must reflect the facts, and 7% VAT is not automatically a way to reduce tax.
• Not matching taxes paid at the land office to receipts and the per-unit tax register.

5. Good practice

• Include SBT of 3.3% in the Project Budget and Cash Flow Model from the feasibility stage.
• Keep separate per-unit control accounts for SBT and WHT.
• State tax and fee burdens clearly in the contract, and have a lawyer review them before passing any of the seller's taxes on to consumers.
• Do not use a bulk sale to group companies as a way to reduce the burden, because it creates a second sale and raises market-price issues under Section 65 bis.

Summary checklist

Conclusion

Developers who manage transfers well know which task is the bottleneck for the whole project, and build the tax burden into the model from the start. The information in this article is general guidance. Have legal and tax advisers check the facts of each project before proceeding.