Key takeaways
- Closing day is where accounting, tax, documentation and compliance come together. For foreign buyers, the team should start preparing at least 90 days before transfer.
- Freehold means the transfer of ownership, while leasehold means the registration of a leasehold right. The two therefore need separate accounting, tax and documentation treatment.
- Money received before transfer day is a contract liability, while the 3.3% SBT on the sale arises when the transfer is registered.
Chapter 1 Overview of real estate sales in Thailand
This chapter sets out the map for the whole handbook. It separates freehold, where the buyer obtains ownership and receives the condominium unit title, from leasehold, where the lessee pays a single lump-sum rent and registers the lease for no more than 30 years at a time. In the 30+30+30 structure seen in the market, only the first term is registered; the renewals are contractual obligations, which a lawyer must review.
The process has 5 stages: Presale and booking; construction and progress-based payments; pre-closing; transfer day; and post-closing. Along the way, the developer receives the booking deposit, down payment and milestone-based instalments. An example schedule is 2% + 18% + four instalments of 15% each + 20% on transfer day, totalling 100%.
The practical core is the T-90 to T+30 day timeline: sending the checklist to the customer, checking the foreign quota, checking the FET, having a lawyer review the contract, booking a slot at the land office, and issuing the paid-in-full letter, through to posting the entries and filing documents after transfer. Thai buyers paying through a domestic bank usually need less time.
This chapter also builds a stakeholder map covering internal parties, such as the CFO, Finance, Tax, Legal and Compliance, and external parties, such as the Land Department, the Revenue Department, banks, auditors and AMLO. It also recommends appointing a closing specialist as the customer's single point of contact after the contract is signed.
Chapter 2 Relevant accounting standards and legal framework
This chapter summarises the rules used throughout the handbook, starting with TFRS 15 and its 5-step model: identify the contract, identify the performance obligations, determine the price, allocate the price, and recognise revenue when control transfers. If a unit is sold together with furniture or services, you must analyse whether each item is distinct, then allocate the price by standalone selling price.
For leasehold, the developer is the lessor under TFRS 16 and must classify the lease as a finance lease or an operating lease according to its substance. On tax, commercial sales of real estate are subject to 3.3% SBT, including local tax, rather than VAT, and a corporate seller has 1% WHT withheld, which is a tax credit.
On the legal side, a lease of more than 3 years must be in writing and registered; otherwise it is enforceable for only 3 years. Foreigners may collectively hold ownership of no more than 49% of the total area of condominium units, and must provide evidence of funds brought into Thailand as required by the Condominium Act.
A lease is in principle not a sale. How SBT and WHT apply to a lump-sum leasehold remains an issue to be examined on the facts. Seek the opinion of a tax adviser, or a ruling from the Revenue Department, before setting a policy.
Anti-money laundering law is treated as a board-level matter. The developer should check which category of reporting entity the business falls into, and then set procedures for customer due diligence, reporting and document retention.