Developer Payment Plans in Thailand: How Off-Plan Payments Work

Most new condominiums in Thailand are sold before they are finished, and the developer lets you pay as the building goes up. For a foreign buyer, that is the main appeal of buying off-plan: no Thai bank, no loan application, and a purchase price spread over the construction period. The trade-off is less obvious. In many countries, money paid towards an unfinished home is protected by law through escrow, a bank guarantee or insurance. In Thailand, payments usually go straight to the developer's account, and your protection rests largely on the contract you sign. This guide explains how a typical payment plan is structured, how it differs from a mortgage, which contract terms deserve a lawyer's attention, and how every instalment ties into the rules on bringing money into Thailand.

This guide explains the topic in general terms and is not legal or tax advice. Payment terms differ between developers and even between buildings in the same project, laws and banking procedures change, and what your contract actually means is for an independent Thai lawyer and your own tax adviser to confirm.

The stages of a typical payment plan

There is no single standard, but most new projects follow the same sequence. Where a project's payment plan is in our database, its page shows the stages and the percentage and amount due at each; payment dates and the current terms come from your manager in writing. What follows explains what sits behind each stage.

Reservation deposit

The first payment is a relatively small deposit that takes a specific unit — floor, view, number — off the market for a short period while the developer prepares the sale and purchase agreement. Use that window to have the draft reviewed. The question that matters most is whether the deposit comes back if you decide not to sign. Some developers refund it under stated conditions, some never do, and some refund it only if your lawyer finds a material problem. Get the answer in writing before you transfer anything.

Contract signing and first payment

Once the draft has been reviewed, you sign, often remotely, and make the first payment. The reservation deposit is normally credited against it. From this point you are bound by the payment schedule, so this is the last moment when changes to the contract are easy to negotiate.

Instalments during construction

This is where projects differ most. You will usually see one of three structures:

• Milestone-based: each payment falls due when construction reaches a stage defined in the contract, such as foundations, structure, a given floor, roof or finishing. You pay for work that has been done.
• Time-based: equal payments every month or quarter, regardless of progress on site. Easy to budget for, but if construction slows, the payments carry on.
• Mixed: part in regular instalments, part tied to key milestones.

For a buyer, milestone-based plans generally carry less risk: if work stops, so do the payment demands. They do raise a practical question, though — who certifies that a stage is complete, the developer or an engineer, and how will you know if you live abroad? Ask for photos or a progress certificate to accompany every payment request.

Balance on completion

The final and usually largest payment is made when the building is complete, the unit has passed inspection and ownership is registered in your name at the Land Office. Around the same time you pay whichever transfer fees and taxes the contract assigns to the buyer, plus the juristic person's sinking fund and advance common fees. What is payable and by whom is covered in our guides to taxes and fees on purchase and the running costs of ownership.

Some developers offer to spread part of the balance beyond handover. This is less common and tends to come with its own terms: a different price, security over the unit, or registration of ownership only after the last payment. If you are offered such a plan, ask your lawyer to spell out exactly when the unit becomes legally yours.

A payment plan is not a mortgage

Developer payment plans are sometimes described as interest-free financing. The comparison is convenient but misleading, and the differences matter:

• There is no lender. The developer does not assess your income or credit history and takes no mortgage over the unit.
• There is usually no interest, but the price may depend on the plan. Some developers discount a full upfront payment; others build a longer plan into a higher price. Compare the total cost, not the size of each instalment.
• You are paying for something that does not exist yet. A mortgage finances a finished home already registered to you. A payment plan finances construction, and the risk of delay sits with you.
• You do not own anything until registration. Until then you hold a contract and a right to receive the unit once it is built.
• Missing a payment is expensive. The contract may impose penalty interest, termination and forfeiture of part of what you have paid. A bank might offer to restructure; a developer has no such obligation.

Thai banks rarely lend to non-resident foreigners, so most buyers combine a developer plan with their own funds or with financing arranged in their home country. The options and their risks are discussed in our guide to financing and mortgages.

What protects your money

Thailand has no general mandatory scheme that ring-fences buyers' payments on homes under construction. An escrow law exists, but it applies only when the parties agree to use it, and it is uncommon in off-plan sales. In practice your protection rests on three things: the developer's track record and finances, the quality of your contract, and paying strictly to schedule.

You can check a developer before you reserve: land title, permits, completed buildings, disputes. Our developer due diligence guide walks through it. Whether buying under construction suits you at all, compared with a finished unit, is the subject of the guide off-plan or ready property.

What to ask your lawyer about the contract

The contract should be reviewed by an independent Thai lawyer, not one appointed by the developer. A focused list of money questions helps the review go beyond a general all-clear:

• Schedule: is each instalment tied to a date or to a clearly defined milestone, what triggers the payment demand, and how long do you have to pay?
• Milestone sign-off: who decides a stage is complete, and what evidence comes with the demand?
• Completion date: is there a fixed date, a grace period, and what happens after it — compensation, interest on sums paid, or a right to cancel with a refund, and within what time?
• Reservation refund: in which cases, and how quickly?
• Late payment by you: the penalty, when the developer may terminate, and how much of what you paid it may keep.
• Price: is it fixed in baht to the end, or is there any adjustment clause?
• Floor area: what happens if the measured area at handover differs from the contract, and how does that affect the final payment?
• Payee: is the account holder the same company that signs the contract?
• Assignment: can you sell your contract before completion, on what terms and for what fee?
• Specification: are the specification and floor plan attached, and what if the developer changes them?
• Language: which version prevails if the English and Thai texts differ?

If the contract does not answer a question, a sales agent's verbal assurance is worth little. Ask for a signed addendum or a formal letter from the developer.

Every instalment is a transfer from abroad

For a foreigner to register a condominium unit in freehold, the purchase money must come into Thailand from abroad in foreign currency, and the receiving Thai bank issues a document to confirm it — a Foreign Exchange Transaction form (FET) or a bank credit advice. With a payment plan, that applies to every instalment. Each one is a separate international transfer and should leave its own paper trail, because the Land Office will want to see them at registration.

• Send each payment from an account in your own name directly to the developer account named in the contract.
• State the project name and unit number in the payment reference, worded the same way every time.
• After each payment, ask the developer for a receipt and the document from its Thai bank, and keep them together.
• Do not pay through acquaintances in Thailand, in cash, from baht already held in the country, or through a third party paying on your behalf.

If your bank restricts transfers to Thailand or payments tend to be held up along the way, factor that in before you reserve: the developer's schedule will not wait. Agree the payment route with your lawyer and your bank in advance. The full requirements are set out in our guide to transferring money to Thailand and the FET form.

Exchange rates over the build

The developer's schedule is in baht, while your income is probably in another currency. A whole construction period separates the first and last payments, and exchange rates can move either way in that time, so the final cost in your currency is only known at the end. We do not give currency advice, but it is worth building a margin into your budget and asking your bank what options it offers.

Records for later

For each payment keep the date, the amount in both currencies and the bank confirmation. You will need them at registration, and very likely again when you sell, to show your tax authority at home what you paid and when. How that works depends on where you are tax resident, so check with your own adviser.

The main risks and how to reduce them

• Construction delays are the most common problem. Choose a milestone-based plan where you can, and make sure the contract deals with late completion.
• Developer financial trouble. Check completed projects and land title before reserving, and favour developers with a record of finishing on time.
• Changes along the way. The specification and floor plan should be attached to the contract.
• Quality at handover. Do not pay the balance before inspection; if you are not in Thailand, an inspector you hire can do it for you.
• Your own cash flow. A plan runs for years. Think through what happens if your income changes halfway through, and keep a reserve.
• Currency, as described above.

How the handover inspection works and what to record before the final payment is covered in our handover guide. Two simple habits remove much of the risk: never pay ahead of schedule, even for a discount, and never skip the independent lawyer, however large and well known the developer.

Where to see a project's payment plan

If a project's payment plan is in our database, it is shown on the project page: the stages and the percentage and amount due at each. Your manager sends the current plan in writing. Developers change terms during a sales launch — short promotions, different terms for different buildings in one project — so before you decide, your manager checks it with the developer. Start from the project catalogue or from a location such as Pattaya new developments or Phuket new developments.

How ROMA ThaiProperty helps

We request the current payment plan and draft contract from the developer, explain in plain English what they say, and help you compare projects by how their payment plans are structured, not only by price. Where needed, we recommend an independent Thai lawyer. We do not replace your lawyer or tax adviser; our job is to make sure the right questions are asked in time — before you sign, not after.