Developers in the past have been known to omit discussion of maintenance and closing fees, leaving them to surprise buyers at the end of the purchase.
This is yet another key reason why using a reputable real estate agent, such as Joe Lizzerd, to make your condominium purchase in Thailand, is a very important decision. To protect you from ‘hidden costs’ and surprises, Joe Lizzerd shares with our readers and customers, a guide and breakdown to understanding the closing costs on Thai condominium purchases in Pattaya.
In general, closing costs on Thai properties are considerably lower than western real estate investments. Condominium common areas are maintained at a significantly lower cost than properties in the west built to similar standards.
In Pattaya, most buyers will spend approximately 3-4% of the total cost of their condominium investment after the sale is complete. All condo developers in Thailand impose the fees discussed below. It’s also worth mentioning that the growing trend is to have the buyer pay business tax, stamp duty and transfer costs to keep marketed costs low on condos, this varies with each condo builder and should be inquired about on a project-specific level.
A sinking fund is basically a bank account that all co-owners in the building contribute to in advance to cover the costs of keeping the building attractive and well maintained for a period of 15-20 years. Services covered by your condominium’s sinking fund include pool renovation, parking lot repaving, lift overhauls, exterior building painting, replacement of faulty common area equipment & wiring, pool replastering, replanting of gardens or anything else related to the common area’s beauty and usability.
The average sinking fund on a condominium in Thailand is 450 baht per square meter and is paid as a one-off payment at time of transfer. Higher sinking funds are to be expected on projects with extensive amenities or large common areas. Be cautious of developers that boast sinking funds that are too low as it is a recipe for disaster in regards to the future maintenance of your condo building.
If purchasing a resale unit that has already been paid off by previous buyer, you will generally not be required to contribute towards your condo buildings sinking fund.
Maintenance fees are used to pay for ongoing maintenance such as common area electrical usage, swimming pool maintance and water costs used to maintain green areas. Most of the maintenance fees paid to your condominium juristic committee will go towards paying salaries to security guards, gardeners, receiptionists and other personnel whom are continuously employed at your condo project.
A reasonable maintance fee is around 40 baht, per square meter per month.
Maintance fees on Thai condominiums are generally higher on properties with fewer units and/or more elaborate common areas & services.
Larger buildings with 500+ tenants are expected to have relatively low (30-40 baht) per square meter maintenance fees even with comprehensive common areas as they are shared by many tenants.
We recommend exercising caution on developments with exceedingly high (60+ baht/sq.m) or exceedingly low (-25baht/sq.m) maintance fees. Overcharging on maintance fees, although uncommon, can be a profiteering tactic exercised by unsavory developers. On the flip side, undercharging for maintance fees in an effort to reduce final cost for buyers can lead to a quickly dilapidated building and/or poorly maintained premises.
Maintenance fees within Pattaya vary from ten to sixty baht for each sq . meter and are typically determined by unit dimensions, monthly (Ex: 30 bahtsq. meters for the forty two Square. Meters studio costs 1,260 THB each month). These fees are set apart to cover employees (security, reception, cleaning, and so on.), swimming pool servicing and chemical substances, electric utilization in common areas, waste disposal and sewer support. Maintenance fees may occasionally incorporate extra capabilities such as neighborhood wi-fi net, transport as well as standard cable television.
Residents with commercial space or that are coupled with hotels/timeshare tenants typically offer more services and are subject to greater wear & tear, thus often have slightly higher maintance fees.
Water/Electric Meter setup:
This is a government imposed charge upon new condominiums in Thailand usually costing around 7000 baht. Meter fees are a one-off payment covered by the buyer in all cases and only need to be paid when transferring the condo to the first buyer. Resale buyers are not required to pay W/E fees.
Other closing costs involved with condominium purchases in Thailand include stamp duty, SBT (specific business tax), lawyer fees and transfer fees. Although most developers build these costs into the price of the condominium unit, some developers choose to have the buyer cover this expense in order to produce a more attractive marketing price. Although some buyers mis-interpret these fees if they are not discussed beforehand, it is not a negative practice to ask the buyer to pay for them, simply a marketing decision made by the company to produce a more lucrative and competitive buying environment.
Although we exercise every effort possible to help buyers understand exactly what they are responsible for when purchasing, developers in the past have been known to omit discussion of these fees leaving them to surprise buyers at the end of the purchase. This is yet another key reason why using a reputable real estate agent to make your condominium purchase in Thailand is a very important decision.