Payment Process for Freehold Condo Purchases

Overview

Under the Condominium Act 1991, non-resident foreigners who purchase condominium units must bring in the funds to pay for the unit from overseas. That means that the entire payment must be transferred into the country as foreign currency. The beneficiary bank will issue a “Foreign Exchange Transaction” certificate (FET) which should be presented to the Land Department when registering the ownership of the condominium. The total amount of funds in FETs cannot be less than the contract purchase price of the respective unit.

For each transfer, banks will only provide a “Foreign Exchange Transaction” certificate for amounts of over USD 50,000. For amounts of less than this, the bank will issue a credit note, which serves the same purpose and may be presented, with the confirmation letter from the bank, to the Land Office in order to register the condominium.

The FET can be received on the funds transferred either to developer’s account or to your own account in Thailand (if you have one).

The former – sending the funds to developer’s account directly – is the more common way. In such case, the developer, as the beneficiary, will obtain the Foreign Exchange Transaction certificate from the bank on behalf of the purchaser. The developer will keep all the certificates and/or credit notes with the letter from the bank until the date on which the ownership of the condominium units is transferred.

If you have a bank account in Thailand the procedures will be the same (except it will involve 2 transfers: 1st from abroad to your Thai account and 2nd from your Thai account to developer’s account), but you will be the beneficiary and you will have to obtain the Foreign Exchange Transaction certificate from the bank by yourself.

❗ Note that when filling in payment information some online banking systems will automatically use the central branch of your chosen bank in Bangkok. This doesn’t impact the payment, as in case of the most Thai banks all their branches countrywide use the same SWIFT code.

To obtain a “Foreign Exchange Transaction” certificate, please ensure that you follow the instructions below.

1. The name of the remitter must be the same as the purchaser (as indicated in the S&P agreement). Remember to fill in full name and address of the remitter and the beneficiary.
2. The money is transferred as foreign currency. Do not convert to Thai Baht before making a transfer. The conversion into Thai baht will be done by the beneficiary bank.
3. Indicate in the transfer instructions that the purpose of transfer is “Purchase of the [Project name] unit no. [Unit Number] for [Client(s) Name]”.
4. Use the exact wording above - or other wording suggested by developer or your agent - in order to avoid any misinterpretation by the Land Department. For example, a common mistake is the usage of the word “apartment”, a term which is frequently used in other countries, but has different meaning from “condominium”.
5. Include both overseas and beneficiary bank charges for each payment.

👉 Example:

Installment payment No.1: THB 1,000,000.

Assume exchange rate @32 THB = 1 USD (please note that his is used for example only, the actual exchange rate will be determined by the rate at the time of transfer).

Assume bank charges USD 200 = THB 6,400.

Total THB 1,006,400.

Amount to transfer USD 31,450.

Debit advice

After each funds remittance, please email the debit advice to developer for their record. It will help them in tracing the payment and ensuring that the receipt of payment will be sent to you promptly.

Payment adjustment

The conversion into Thai baht may result in the difference either a surplus or a shortfall amount regarding each payment. As such, the balance of all the payments will be adjusted in the final payment due upon registration of the ownership of condominium.

As a general recommendation it’s suggested sending a little more on the installment payment in case of currency fluctuations, so that you don’t get behind on the payment schedule. Any excess amount will be adjusted from the last payment or offset against taxes or maintenance fee.

Transfer of ownership

Prior to the transfer of title ownership, the developer shall inform the buyer about final amount due, which includes the final payment (remaining unit balance), title transfer fee, common area management fee, sinking fund, electricity and water meter deposit etc. This final amount and list of closing costs will be communicated to you in advance before the transfer period, wherein the remaining unit balance will need to be transferred from overseas for FET purposes. The other costs may be paid via overseas fund transfers or locally via cash or credit card.