Glossary, tax and fees

Sinking fund in Thai property

เงินกองทุน

A sinking fund is the reserve a condominium's juristic person holds for major repairs and capital works, such as repainting the building or replacing lifts. Each buyer pays into it once, at first transfer from the developer, at a set rate per square metre.

The contribution is fixed in the sale and purchase agreement as an amount in baht per square metre of unit area and is paid at transfer, on top of the price. It belongs to the building, not the owner: nothing is refunded on resale, and a resale buyer does not normally pay it again.

The fund is separate from the recurring common-area fee, which covers day-to-day running costs. It exists so that large, infrequent bills do not fall on owners all at once. When it runs low, the co-owners can vote at a general meeting to top it up, which means a special levy on every unit.

That is the point to check when buying in an older building. Ask the juristic person for the current balance, the audited accounts and any planned works. An ageing building with a small fund and tired lifts, pool plant or facade will need money from its owners soon.

For new developments, compare the rate between projects. See property taxes and buying costs and title deeds and due diligence.

General guidance, not legal or tax advice. Take independent legal advice before you commit to a purchase.

Terms related to sinking fund

Common-area fee (CAM fee): The common-area fee, or CAM fee, is the recurring charge each condominium owner pays towards running the building: staff, security, lifts, pool, insurance and cleaning. It is set in baht per square metre of unit area per month and is often billed a year in advance.
Condominium juristic person: The condominium juristic person is the legal entity, created when a condominium is registered, that manages the building's common property for all unit owners. It collects fees, enforces the by-laws and is run by a manager under an elected committee.
Condominium Act: The Condominium Act B.E. 2522 (1979) is the statute governing how condominiums in Thailand are registered, owned and managed. Sections 19 and 19 bis set out which foreigners may own units and cap foreign ownership at 49% of a building's unit floor area.