When purchasing an off-plan condominium unit from a developer, the buyer initially has the right to assign their rights and obligations under the contract (Assignment) to a third party.
This is stipulated in the Standard Condominium Sale and Purchase Agreement approved by the Ministry of Interior of Thailand. For many investors, assignment is a key real estate investment tool.
At the same time:
- registration of the assignment is not required
- the agreement is concluded in simple written form
- signatures of the parties and two witnesses are sufficient
However, in practice there are several important nuances.
Freehold vs Leasehold: a Fundamental Difference
Freehold
The right of assignment is established at the regulatory level and does not require the developer’s consent.
Leasehold
The standard contract does not apply. Assignment requires mandatory consent from the developer (lessor), and they have the right to refuse.
What we recommend:
It is advisable to include in the contract in advance:
- the tenant’s right to assign
- the landlord’s obligation to approve the transaction
- the procedure for conducting the assignment
Bank documents: a common issue
When purchasing:
- the initial buyer transfers funds from abroad
- the transfer payment specifies their details
After the assignment, the situation changes.
Example:
Ivanov paid 30% (3,000,000 THB)
Petrov, after the assignment, pays the remaining 70%
As a result:
- 30% of payments are under Ivanov’s name
- 70% are under Petrov’s name
However, for ownership registration at the Land Department, 100% of bank transfer documents must be under the final buyer (Petrov).
What we recommend:
This issue should be discussed with the developer in advance, at the assignment stage.
Tax on assignment
Income from assignment is subject to personal income tax (PIT) at a progressive rate.
Example:
Purchase price: 10,000,000 THB
Amount paid: 3,000,000 THB
Assignment price: 4,000,000 THB
Income: 1,000,000 THB
Taking into account the personal allowance of 60,000 THB:
Taxable base: 940,000 THB
Tax calculation:
0 – 150,000 → 0 THB
150,001 – 300,000 → 7,500 THB
300,001 – 500,000 → 20,000 THB
500,001 – 750,000 → 37,500 THB
750,001 – 940,000 → 38,000 THB
Total PIT: 103,000 THB
How to reduce risks?
We recommend:
- conducting tax planning before the transaction
- reviewing assignment terms in the contract
- considering developer requirements in advance
- preparing banking documentation in advance
Conclusion
Assignment at the construction stage is a convenient investment tool, but it requires careful preparation.
The main risks are related to:
- ownership structure (freehold / leasehold)
- banking documentation
- taxation
A well-structured transaction helps avoid issues during registration and optimize the tax burden.
Author: Aleksandra Agapitova.
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