Chirayuthchai TraisaengsatheanStrategic Finance for Property Development
THEN

Stage 04 / 05 · Handover, Transfer & Closing

Stage 4 Transfer & Closing

Condominium registration, ownership transfer, transfer-day taxes, revenue recognition and debt repayment

Key questionCan sales be fully converted into cash and revenue?

Checklists and strategic questions5-Stage Overview

Duration
6–12 monthsThe period of the project's main cash inflow
Decision gate
Condominium registration
Ownership transfer ≥ 90%
Revenue recognised ≥ 85% of GDV

Focus Areas

Key points of Stage 4

  1. 01Condominium registrationConstruction completion, handover inspection and condominium registration before transfers beginGo to section →
  2. 02Ownership transferTransfer sequence, handling buyers who do not accept transfer, and remaining inventoryGo to section →
  3. 03Transfer-day taxesSpecific Business Tax (SBT), withholding tax (WHT), stamp duty and transfer feeGo to section →
  4. 04Revenue recognition and debt repaymentRecognising revenue on transfer, the order of using transfer proceeds and mortgage releaseGo to section →

Executive Summary

Executive summary

  • The stage where sales turn into cash. Around 60–70% of a project's cash inflow arrives in this stage
  • The condominium must be registered before units can be transferred, so the paperwork is the critical path
  • Revenue is recognised at the point in time when control transfers, and the large tax payments arise at the same time

Key Metrics

Metrics to watch

  • Transfer rate of sold units70–90%Below 80% in the first 12 months, conditions start to tighten
  • Buyers refusing transfer5–15%Of units sold
  • Net cash remaining from transfers60–80%Of the sale price
  • Transfer-day tax (seller)SBT 3.3% + WHT 1%Plus the seller's share of the transfer fee

Figures are drawn from the website content; use figures from your own model and the funding terms of the actual project.

01 · Key DecisionsDecisions to make

  • Transfer sequence which units and which groups, so that cash comes in quickly and debt is released quickly
  • Handling buyers who do not accept transfer forfeit the deposit, negotiate or resell, in line with the contract and the law
  • Order of using transfer proceeds repay debt at the Release Price, pay taxes, set aside reserves, then return funds to shareholders
  • Share of the transfer fee as set out in the contract with the buyer
  • Selling price of remaining inventory hold it or sell at a discount to clear debt
Order of use for transfer proceedsConceptual; heights are not real figures
Order of use for transfer proceedsTransfer proceeds first repay debt at the release price, then pay taxes and fees, then fund reserves; the rest returns to shareholders.Transfer proceedsTransferproceedsDebt repayment at release price− Debt repaid atrelease priceSBT, transfer fee, WHT− Taxesand feesReserves held back− ReservesCash returned to shareholders= Returned toshareholdersThe first transfer receipts go straight to taxes and debt repayment, so the cash left is less than the amount received

02 · Finance · Tax · LegalFinance, tax and legal tasks

Taxes and fees on transfer day

ItemRateBasis and notes
Transfer fee2%of the appraised value; the burden is split as per the contract, see the fee reduction measure below
Specific Business Tax (SBT)3.3%Includes local tax, charged on the selling price or the appraised value, whichever is higher
Stamp dutyExemptWhen SBT is paid; if SBT is not paid, charged at 0.5%
Withholding tax (WHT), corporate seller1%of the selling price or the appraised value, whichever is higher; creditable against corporate income tax (CIT)
VAT on the sale of condominium unitsNoneThe sale of real estate is outside VAT, but furniture sold separately may be subject to VAT

Fee reduction measure: On 30 June 2026 the Cabinet extended the reduction of transfer and mortgage registration fees to 0.01% until 30 June 2027. According to the news report, it is limited to individual buyers of Thai nationality, for a residence or condominium unit whose sale price and appraised value do not exceed THB 7 million, with a mortgage amount not exceeding THB 7 million per contract. Foreign buyers are therefore outside the conditions in the report. Check the announcement in the Royal Gazette before relying on it.

Operators who sell condominium units commercially or for profit must pay SBT even if they have held the units for more than 5 years. The 5-year exemption applies only to certain cases involving individuals, so it should not be used to reduce the burden in a company's model.

Accounting and finance

  • Recognise revenue at the point in time when control transfers under TFRS 15, unit by unit, and release the contract liability to revenue
  • Record the cost of sales from inventory using a consistent allocation method
  • Track weekly transfers against plan, actual receipts and the Release Price
  • Close the final account with the contractor and reconcile actual project costs against the budget
  • Separate the sinking fund and common area fees collected on behalf of the juristic person from project money. This money is not project revenue

Law

  • Sequence of work: construction certificate (Or 6), condominium registration, issue of unit ownership certificates (Or Chor 2), then transfer unit by unit
  • Foreign buyers must have evidence of the remittance from abroad (FET or bank evidence) before transfer day
  • Check the 49% quota before the transfer appointment. The Land Department may verify the remaining quota, so allow extra time
  • Register the condominium juristic person and plan the handover of common property
Legal sequence before unit-by-unit transferFrom the legal tasks above
Legal sequence before unit-by-unit transferConstruction certificate (Or.6), then condominium registration and unit title deeds (Or.Chor.2), then unit transfers and revenue recognition. Foreign buyers need proof of funds from abroad and a 49% quota check before the transfer appointment.Construction certificate (Or.6)Constructioncertificate (Or.6)Condominium registrationCondominiumregistrationUnit title deeds (Or.Chor.2)Unit title deeds(Or.Chor.2)Transfer of each unitTransfer ofeach unitRevenue recognised under TFRS 15Revenue recognisedunder TFRS 15Foreign buyers: proof of funds from abroad (FET)Check the 49% quota before booking the transferAlongside: register the juristic person and plan the handover of common property

03 · RoadmapRoadmap tasks

P8 Construction completion and condominium registration

#TaskCategoryResponsible partyOutcomeTime
8.1Construction complete & defect inspectionTechnicalPM/ContractorSnag list, practical completionPer programme
8.2Construction/occupancy certificateLawAuthorityConstruction/occupancy certificate30–60 days
8.4◆ Condominium registrationLawLawyerRegister the condominium, define the common propertyGate
8.5Issue unit ownership certificates (Or Chor 2)LawLawyerIssue title deeds for each unitAfter registration
8.6Register the condominium juristic personLawLawyerJuristic person, regulations, first committeeAfter registration
8.7Hand over common property & set up the sinking fundFinance/legalFinance/lawyerHandover of common property, sinking fund + common area feesAfter the juristic person is established
8.8Contractor final account & retention release (first instalment)Investment budgetQSAgree the final account, release the first retention instalmentOn completion of works
8.9◆ Final project cost reconciliationInvestment budgetFinance teamReport actual cost against budgetOn completion of works
8.10Start the defects liability period (DLP)LawPM/lawyerStart counting the DLPOn completion of works

P9 Ownership transfer and sales close

#TaskCategoryResponsible partyOutcomeTime
9.1Transfer notice & collect buyers' final paymentsFinanceFinance/SalesCall for final payments, arrange buyer financingAs planned
9.3◆ Ownership transfer (unit by unit)LawLawyerTransfer ownership to buyersPer transfer appointment
9.4Pay the transfer feeFinanceFinance teamPay the transfer fee at registrationAt transfer
9.5Specific Business Tax (on property sales)FinanceTax teamPay SBT ⚠ property sales incur SBT, not VATAt transfer
9.6Stamp duty (if applicable)FinanceTax teamPay stamp duty where requiredAt transfer
9.7Withholding tax on sale (corporate)FinanceTax teamWithhold WHT on the sale; credit against CITAt transfer
9.8◆ Recognise revenue on transfer dayFinanceFinance teamRecognise revenue when control is transferredAt transfer
9.9Release mortgage & return capital by unitFinance/legalFinance/lawyerRelease the mortgage unit by unit, return capital from the proceedsAt transfer
9.10Remittance/FX documents for foreign buyersLawLawyerFX/remittance evidence for foreign buyersAt transfer

04 · MetricsMetrics to watch

FigureReference level from the source documentNotes
Transfer rate of units sold70–90%Below 80% in the first 12 months signals the start of liquidity problems
Buyers who refuse transfer5–15% of units soldShould have a resale plan
Cash remaining from transfer proceeds60–80% of the selling price; figures differ between sourcesActual receipts after buyer credit outcomes
Remaining debt vs Release PricePer contractCheck before each transfer round
Total actual cost vs budgetPer feasibilityConfirm gross profit before paying dividends
Transfer tax burden per unitSBT 3.3% + share of the transfer fee + WHT 1%WHT is a prepayment that can be credited
Transfer rate and the closing gateFigures from the table and the decision gate below
Transfer rate and the closing gateThe transfer rate of sold units is typically 70–90%; below 80% in the first 12 months signals liquidity strain. The closing gate requires at least 90% of units transferred, refusals run at 5–15% of units sold, and at least 85% of GDV recognised as revenue.Transfer rate of sold unitsReference 70–90%70–90%70–90%0%50%70%80%90%100%Below 80% in first 12 months = liquidity strainGate ≥ 90%Buyers refusing transfer% of units sold5–15%: plan resale5–15%: plan resale0%5%15%30%Revenue recognised% of GDV≥ 85%≥ 85%0%50%85%100%Gate ≥ 85% of GDV

Example: taxes and fees per unit priced at THB 10 million

Assumes the appraised value is not higher than the selling price, the buyer and seller split the transfer fee equally, and the fee reduction measure does not apply

ItemTHBBorne by
SBT 3.3%330,000Seller
Half of the 2% transfer fee100,000Seller
Seller's cost430,000
WHT 1% (creditable, so not included in cost)100,000Cash outflow on transfer day
Seller's cash outflow on transfer day530,000
Seller's cash outflow on transfer day, per THB 10 million unitFrom the example table above · THB
Seller's cash outflow on transfer day, per THB 10 million unitSBT of 330,000 plus half the transfer fee, 100,000, makes the seller's cost of 430,000. Adding the 1% WHT of 100,000, which is creditable, gives a cash outflow of 530,000 on transfer day.SBT 3.3%: 330,000330,000SBT 3.3%Transfer fee (half): 100,000100,000Transfer fee (half)WHT 1% (creditable): 100,000100,000WHT 1% (creditable)Seller's cost 430,000Cash outflow on transfer day 530,000

Figures are illustrative; who bears the fees depends on the contract

05 · Decision GateDecision gate

Go: close the transfer stage

  • At least 90% of units transferred
  • Project debt fully repaid, or a refinancing plan for the remainder
  • Cumulative cash flow is positive
  • Revenue recognised of at least 85% of GDV
  • Final project cost reconciled

Not yet closed: corrective action needed

  • Transfers are low because of buyer credit or defects; a plan is needed for each group
  • The Release Price is not enough to repay debt on schedule
  • Foreign buyer evidence or quota checks are incomplete
  • Final cost is not yet settled, so dividends should not yet be paid

06 · Common PitfallsCommon pitfalls

  • Recognising revenue before the ownership transfer day
  • Assuming 100% transfer in the cash flow
  • Forgetting that the first transfer proceeds must immediately pay taxes and repay debt, so the cash actually left is less than the amount received
  • Starting preparation for condominium registration late, which delays the transfer day for the whole project
  • Including buyers' sinking fund or common area fees in the project's working capital
  • Foreign buyers lacking remittance evidence at the transfer appointment
  • Applying the SBT exemption for 5-year holding to a business operator without checking the conditions

Gate Readiness

Checklists and strategic questions before the gate

See all 5 stages on the Strategy page →

Pre-gate checklist Gate Readiness

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Key questions Strategic Questions

  1. Will the transfer rate reach 80% within the first 12 months? If not, when will liquidity start to tighten?
  2. In what order is each round of transfer proceeds applied: release price, taxes, reserves and returns to shareholders?
  3. For units that buyers have abandoned, should we resell immediately or wait for a better price, once holding costs are counted?
  4. Which units have an appraised value higher than the sale price, making transfer-day tax higher than estimated?
  5. Has the project debt been fully repaid, or is there a refinancing plan for the remainder?
Related parts of the handbook

Strategic Finance

Project Accounting

Real Estate Project Law

Ownership Transfer Operations