Buying a Condo in Phuket: 7 Costs Every Investor Must Know in 2026

Purchasing a condo in Phuket at 5,000,000 THB? Budget an additional 6-8% of the purchase price for taxes and transfer fees - and factor in your home-country tax obligations on top. Many international investors focus exclusively on the price per square metre, overlooking the full cost chain. In Thailand, these fees are distributed between buyer and seller according to local negotiating conventions rather than a fixed statutory formula.

One structural advantage of Thailand worth noting upfront: there is no annual property tax on residential units with an assessed value below 50 million THB used for private occupation. This compares favourably with Cambodia, where an annual property tax applies above a threshold of approximately 25,000 USD. Before signing any reservation agreement, however, you need to understand every line item in the transaction cost schedule.

Quick answer

• Transfer fee: 2% of the appraised or sale price (whichever is higher) - customarily split 50/50 between buyer and seller
• Withholding tax: 1% of appraised or sale price for individuals who have held the property for more than 5 years; shorter holding periods attract a progressive rate - paid by the seller
• Specific Business Tax (SBT): 3.3% of sale or appraised price if the property is sold within 5 years of acquisition - paid by the seller
• Stamp duty: 0.5% - applicable only when SBT does not apply
• Sinking fund: one-time payment on purchase, typically 400-800 THB per sqm
• Legal fees: 30,000-80,000 THB for due diligence and transaction management
• Home-country tax reporting: rental income and capital gains from the sale of Thai property may be taxable in your country of residence; Thailand has double-taxation treaties with numerous countries

Options and scenarios

Scenario 1 - New condo purchase from a developer (primary market)

Developers typically absorb the Specific Business Tax (3.3%) and their half of the transfer fee (1%). The buyer covers the remaining 1% transfer fee, the sinking fund, and legal costs. Total buyer-side cost: approximately 2-3% of the purchase price.

At a purchase price of 5,000,000 THB, buyer costs break down as follows:

• Transfer fee (buyer's half): 50,000 THB
• Sinking fund (45 sqm unit at 600 THB/sqm): 27,000 THB
• Legal counsel: 50,000 THB
• Total: approximately 127,000 THB

This is a materially lower entry cost compared to the secondary market, and many developers sweeten launches with promotions that cover their transfer fee share entirely.

Scenario 2 - Secondary market purchase from a private seller

Negotiation determines the cost split. Standard practice on Phuket is a 50/50 transfer fee split, while seller-side taxes (withholding tax, SBT or stamp duty) remain with the seller. In practice, sellers factor these costs into the asking price, so buyers should model both scenarios during valuation.

An additional variable: if the seller has owned the unit for fewer than 5 years, SBT at 3.3% applies, which can be absorbed into the negotiated price. Realistic total buyer-side outlay on the secondary market is 3-5% of the purchase price, depending on how costs are allocated.

Scenario 3 - Purchase for short-term rental (Airbnb or hotel pool programme)

Rental income in Thailand is subject to personal income tax at rates of 0-35% on a progressive scale. Some foreign investors operate through a Thai company structure, which adds incorporation costs (approximately 30,000-50,000 THB) and annual accounting fees (approximately 15,000-25,000 THB per year). Importantly, rental income must also be declared in your country of tax residence. If your home country has a double-taxation treaty with Thailand, you can typically avoid double taxation - but the reporting obligation remains regardless.

Comparison table

Parameter	Thailand (Phuket condo)	Cambodia (Phnom Penh condo)	Key distinction
Transfer fee	2% (customarily 50/50)	4% of market value	Cambodia: higher rate, paid entirely by buyer
Withholding tax	1% or progressive scale	No separate equivalent	Thailand: borne by the seller
Specific Business Tax	3.3% (sale within 5 years)	No direct equivalent	Thailand: seller pays if holding period under 5 years
Stamp duty	0.5% (when SBT not applicable)	0.1% of contract value	Thailand: alternative to SBT, not cumulative
Annual property tax	0% below 50M THB (private use)	0.1% above approx. 25,000 USD	Thailand more favourable at lower asset values
Rental income tax	0-35% progressive PIT	10% flat withholding	Cambodia simpler administratively
Double-taxation treaty	Yes (Thailand has broad treaty network)	Limited treaty coverage	Cambodia: higher risk of double taxation for many nationalities
Transaction currency	THB	USD	Different FX exposure profiles

Risks and mistakes

1. Skipping legal due diligence. Some buyers forgo legal counsel to save on fees. This is false economy. A qualified Thai property lawyer will verify the Chanote title deed, confirm the foreign freehold quota status in the building, and check for any encumbrances or liens. These checks protect against losses that can dwarf the cost of the legal retainer.

2. Failing to transfer funds from overseas in foreign currency. Thai law requires that a foreigner purchasing a condominium transfer funds in foreign currency to a Thai bank account and obtain a Foreign Exchange Transaction Form (Thor Tor 3). Without this document, the Land Office will refuse to register the title transfer. The inward transfer must be equal to at least the full purchase price and must reference property purchase as its purpose.

3. Ignoring home-country tax obligations. Tax residents of most countries are required to declare foreign rental income in their annual tax return. For countries with a double-taxation treaty with Thailand, treaty relief mechanisms typically prevent double taxation - but they do not eliminate the reporting requirement. For Cambodia-sourced income, where treaty coverage is more limited, the tax position is often less favourable.

4. Underestimating sinking fund and CAM fees. The sinking fund is a one-time charge, but the common area maintenance (CAM) fee is a recurring monthly cost - typically 30-80 THB per sqm per month in Phuket. On a 45 sqm unit, that equates to 1,350-3,600 THB per month, which can reduce net rental yield by 1-2 percentage points on an annualised basis.

5. Colluding on an understated contract price. The Land Office uses its own appraised values and applies transfer fee calculations to whichever figure is higher - the official appraisal or the stated contract price. Sellers occasionally pressure buyers to understate the sale price in the contract. This is illegal and exposes both parties to criminal liability. Refuse any such arrangement.

FAQ

How much do transaction costs add to a Phuket condo purchase price?

For the buyer, transaction costs typically amount to 2-4% of the purchase price on the primary market and 3-5% on the secondary market, depending on how fees are negotiated and allocated with the seller.

Who pays the transfer fee when buying a condo in Thailand?

Thai law does not mandate a fixed allocation. By convention, the 2% transfer fee is split equally: 1% buyer, 1% seller. On the primary market, developers frequently absorb their share as part of a promotional package.

Is there an annual property tax on a Phuket condo?

No annual property tax applies if the official appraised value is below 50 million THB and the unit is used for private residential occupation. Above that threshold, rates of 0.02-0.1% apply depending on the assessed value.

What is the Thor Tor 3 form and why does it matter?

The Thor Tor 3 (Foreign Exchange Transaction Form) is issued by a Thai bank confirming that foreign currency was received from abroad. Without it, the Land Office will not register the title in a foreigner's name. The transfer must be designated for the purpose of purchasing property in Thailand.

Can I buy a Phuket condo through a company?

Yes, but a Thai limited company must have at least 51% Thai shareholding. Nominee shareholder structures are illegal and are actively investigated by Thai authorities. Legitimate alternatives include BOI-promoted structures or investment vehicles established under applicable investment protection frameworks.

How much are CAM fees in Phuket in 2026?

Common area maintenance fees typically range from 30-80 THB per sqm per month, depending on the project standard and amenities. Premium beachfront developments can charge 100-120 THB per sqm per month.

Is capital gain from selling a Phuket condo taxable outside Thailand?

In most jurisdictions, yes. Tax residents are generally required to declare capital gains from foreign property sales. Where a double-taxation treaty with Thailand exists, tax paid in Thailand is typically creditable against the home-country liability. Consult a qualified tax adviser in your jurisdiction before transacting.

What is Specific Business Tax and who pays it?

SBT is a 3.3% tax on the sale price or appraised value (whichever is higher) that applies when a property is sold within 5 years of acquisition. It is paid by the seller. When SBT applies, stamp duty does not, and vice versa.

How does the foreign freehold quota work in Thai condominiums?

Thailand permits foreigners to hold freehold title to condominium units, provided total foreign ownership in any building does not exceed 49% of the total floor area. Before purchasing, your lawyer must verify the remaining foreign quota in the specific building. Once the quota is exhausted, foreigners can only acquire units on a leasehold basis.

Is rental income from a Phuket condo taxable in Thailand?

Yes. Rental income earned in Thailand is subject to Thai personal income tax on a progressive scale of 0-35%. Non-residents are taxed only on Thailand-sourced income. The applicable rate depends on your total assessable income after allowable deductions. Double-taxation treaties may provide relief against your home-country tax liability.

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