9 Contract Red Flags to Check Before Buying Property in Phuket (2026)

One in three disputes between a foreign buyer and a developer in Phuket starts not on the construction site, but in the fine print of the contract. Vague wording, hidden penalty clauses, and missing permits can turn a 'great deal' into a loss-making asset. In 2026, with authorities tightening checks on nominee ownership structures¹, the stakes are higher than ever.

Below are the specific clauses you need to read carefully in the SPA (Sale and Purchase Agreement) before any money moves to the developer's account. This guide draws on current legal practice and industry analysis from professionals working directly in the Phuket market.

Quick Answer

• Realistic net rental yield in Phuket runs 5-7% for strong properties. Any guarantee above 8% net is a red flag².

• EIA (Environmental Impact Assessment) is a mandatory environmental permit. Without it, construction is legally questionable and title registration can be blocked².

• The SPA and the Land Office registration document are two separate instruments. Any mismatch between them leads to ownership disputes³.

• A developer with no completed projects in Phuket is a high risk, even with an established Bangkok portfolio².

• A loophole in Section 94 of the Land Code lets a foreigner who illegally acquired land sell it and keep the profit, undermining buyer protection and attracting fraudsters¹.

• Nominee ownership through a Thai company is under active enforcement scrutiny in 2026 across Phuket, Koh Samui, and Koh Phangan¹.

Main Risks and Mistakes

1. Signing the SPA without checking the EIA

The EIA is not a formality. For projects above a certain scale, environmental review is a legal requirement in Thailand. If a developer says 'the permit will come later,' treat it as a warning sign. Without an approved EIA, construction can be halted at any stage².

Mitigation: request the EIA approval number and verify it with Thailand's Office of Natural Resources and Environmental Policy and Planning (ONEP).

2. A developer with no completed projects on the island

A Bangkok track record does not automatically transfer to Phuket. Logistics, contractors, and permitting all differ locally. A reliable benchmark is 2-3 buildings actually delivered in Phuket².

Mitigation: verify physically completed projects and speak with owners of already-delivered units.

3. Unrealistic guaranteed returns

A promise of 10-12% annual returns is a classic lure. The best Phuket locations realistically deliver 5-7% net². Inflated numbers usually mean either an overpriced unit (the guarantee is baked into the markup) or a scheme that collapses within 2-3 years.

Mitigation: ask for a financial model with occupancy rate, ADR, management costs, and taxes broken out. Compare it against area averages.

4. Mismatch between the SPA and the Land Office document

The SPA sets out commercial terms: price, payment schedule, guarantees. But the Land Office registration document is what carries legal weight. If the unit size, unit number, or transfer terms differ between the two documents, the buyer loses protection³.

Mitigation: hire a licensed Thai lawyer to cross-check both documents before the transfer.

5. No long-stop date in the contract

A long-stop date is the deadline after which the buyer has the right to walk away from the deal with a refund. If the SPA has no such date, the developer can delay handover indefinitely⁴.

Mitigation: insist on a clear long-stop date with a specified deposit refund mechanism.

6. Opaque payment schedule

A healthy structure looks like 20-30% at booking and signing, the remainder tied to construction milestones, and the final payment at handover. If a developer asks for 50%+ upfront at the foundation stage, that is a disproportionate risk for the buyer⁴.

Mitigation: compare the payment schedule against market norms and tie every installment to a specific construction milestone.

7. Hidden penalties and non-refundable deposits

Many Phuket SPAs contain clauses under which a buyer forfeits 100% of the deposit if they withdraw, even when the delay is the developer's fault. Others include late-payment penalties of 15-18% per year³.

Mitigation: read every penalty and forfeiture clause line by line. Insist on symmetrical penalties for both parties.

8. Buying through a nominee Thai company

In 2025-2026, Thai authorities sharply increased enforcement against nominee ownership structures. The lack of a unified beneficial-ownership database still makes tracking difficult, but raids are already underway in Phuket, Koh Samui, and Koh Phangan¹. A buyer caught in this structure risks not just losing the asset, but criminal prosecution.

Mitigation: use legal ownership routes instead: buying a condo within the foreign freehold quota, or a long-term leasehold structure (30+30+30 years). Consult a lawyer before choosing a structure.

9. Ignoring hidden transfer costs

Beyond the unit price, buyers typically cover: a transfer fee (usually 2% of the appraised value), a sinking fund, a CAM fee (monthly common-area maintenance), plus government duties and taxes⁵. A typical contract also details payment structure along the lines of a 10-20% deposit, 30-40% during construction, with the balance at handover⁶. If an agent or developer fails to disclose these costs upfront, treat it as a red flag.

Mitigation: request a full cost breakdown before signing the SPA, and budget 3-5% on top of the unit price for associated fees.

FAQ

Which documents should I check before signing a contract in Phuket?

At minimum four: the EIA approval, the Chanote (land title), the SPA text, and the developer company's incorporation documents. A lawyer will additionally verify the condo's foreign ownership quota and relevant licenses⁴.

Can a foreigner buy land in Phuket?

Not directly. Foreigners cannot own land in Thailand outright. Legal routes are freehold condo ownership (within the 49% foreign quota) or leasehold on land or a villa for up to 30 years with renewal rights¹.

What is an EIA and why does it matter?

The Environmental Impact Assessment is a mandatory review for projects above a certain size. Without it, construction can be halted and ownership may not be legally registered².

What is a realistic rental yield in Phuket in 2026?

Net yield on quality properties runs 5-7% per year. Anything promising above 8% net deserves close scrutiny of the underlying financial model².

How is the SPA different from Land Office registration?

The SPA is a commercial contract between the parties. Land Office registration is the only document that proves ownership before the state. Discrepancies between the two are a direct path to a legal dispute³.

What is a long-stop date and why do I need one?

It is the final handover deadline written into the SPA. Once it passes, the buyer can terminate the contract and get a refund. Without this clause, you are locked into the developer with no way out⁴.

Is it safe to buy property in Phuket remotely?

Technically possible, but considerably riskier. You need an independent lawyer not connected to the developer, an in-person inspection by a trusted representative, and a notarized power of attorney for signing. Never transfer a deposit before the contract has been legally reviewed.

What costs beyond the unit price should I expect?

Transfer fee (~2%), specific business tax or stamp duty, a one-time sinking fund, a monthly CAM fee, and legal fees. Altogether, budget 3-5% on top of the price⁵.

Why is a nominee Thai company risky in 2026?

Authorities are actively raiding nominee structures. A buyer risks forced sale of the asset, fines, and potential criminal prosecution. Meanwhile the Section 94 Land Code loophole lets fraudsters profit even from illegal transactions¹.

Source: The Nation Thailand

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