What Is a Condominium Sinking Fund?

If you’re buying a condominium in Phuket, you’ll likely come across the term sinking fund. But what exactly is it?

A sinking fund is a one-time contribution collected from all unit owners in a condominium building. Its purpose is to cover future major repairs and replacements — such as repainting, lift overhauls, roof repairs, and other large-scale maintenance projects.

This fund helps protect the long-term value of your investment and ensures the building doesn’t fall into disrepair.

Why Is the Sinking Fund Important?

Without a sinking fund, unexpected major repairs can lead to large one-off payments for unit owners or even legal disputes among co-owners.

A well-managed sinking fund:

  • Keeps the building in good condition

  • Reduces financial stress for owners

  • Maintains rental appeal and resale value

  • Prevents special assessments for sudden repairs

How Is the Sinking Fund Calculated?

In Phuket, the sinking fund is usually calculated based on the unit size (sqm). For example, if the rate is THB 500 per sqm and your unit is 60 sqm, the initial contribution would be THB 30,000.

This is a one-time payment collected at the time of transfer, separate from the monthly maintenance fee.

Rates vary depending on the size and type of condominium, with luxury or resort-style developments often requiring higher contributions.

What Does It Cover?

The sinking fund typically covers:

  • Major structural repairs

  • Lift replacement or upgrades

  • Roof repairs or waterproofing

  • Replacement of large equipment (e.g. generators, pumps)

  • Major repainting or façade work

It’s not used for regular maintenance, which is what your monthly common area fees cover.

Who Controls the Sinking Fund?

The Condominium Juristic Person (i.e. the management committee) controls the sinking fund. They’re responsible for planning major maintenance and ensuring funds are allocated wisely.

It’s a good idea to ask for financial reports or meeting minutes before buying, so you can see how the fund has been managed.

Each owner contributes a one-time payment into the sinking fund, usually at the time of purchase. It is not paid to the developer, but rather to the management company or the Condominium Juristic Person (CJP).

FAQ: Phuket Condominium Sinking Funds

What is a sinking fund in a Phuket condominium?
A sinking fund is a reserve of money collected from unit owners to cover major future repairs or replacements in common areas — such as roof repairs, repainting, or elevator upgrades.

How much is a typical sinking fund contribution in Phuket?
It’s usually a one-time payment made by the buyer upon transfer of ownership. Rates vary, but a common amount is ฿500 to ฿1,000 per square metre, depending on the development.

Is the sinking fund different from monthly maintenance fees?
Yes. Monthly maintenance fees cover routine expenses like cleaning, security, and landscaping. The sinking fund is strictly for major capital expenditures.

Who controls the sinking fund in a condo building?
The Juristic Person (building management body) is responsible for managing the sinking fund and allocating it for necessary upgrades, as approved by co-owners.

Can I get a refund of the sinking fund when I sell my condo?
No, sinking fund contributions are non-refundable. When you sell your condo, the new owner does not pay again — the fund stays with the building.

Why is the sinking fund important for Phuket property buyers?
It ensures that the condo building remains well-maintained in the long term, protecting both your lifestyle and your investment value.

Final Thoughts

A sinking fund is one of the most important legal and financial structures for maintaining your condo’s value in Phuket. As a buyer, it’s essential to ask the right questions:

  • How much is the current fund balance?

  • What are the plans for future repairs?

  • Are any major projects scheduled soon?

Knowing the answers will help you make a smarter, safer investment.

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If you’re considering buying a condominium in Phuket, we can walk you through every detail of the sinking fund and other key ownership concerns.
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