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Key money (Thai: เงินกินเปล่า) is a one-off payment made on top of rent and deposit, usually to get a lease or to take over someone else's. No Thai statute we found defines it or caps it, and Thai law does not ban it either. The Revenue Department treats it as part of the landlord's rental income. Whether you ever see any of it again depends entirely on what your contract says, so the wording matters more than the amount.
In short
- Key money is not illegal, and it is not a deposit.
- It is taxable: the Revenue Department treats it as the landlord's rental income.
- Whether it comes back when a lease ends early depends on the contract, not on a general rule.
- A goodwill payment for taking over someone else's lease (เซ้ง) is a different thing again, and it needs the landlord's consent.
- Paying part of a purchase price off the record does not lower your risk; it adds a tax problem on top.
What people mean by key money in Phuket
"Key money" covers a few different situations, and they are not interchangeable.
The first is a one-off payment a new tenant makes to the landlord on top of the first month's rent and the deposit, simply to secure a residential or commercial unit. It can apply to commercial units such as shops, cafés and bars, and to ordinary flats as well.
The second is goodwill, known in Thai as เซ้ง: the price an outgoing tenant asks a new tenant to pay for taking over their spot, their fit-out and their position in a good location. This is a private sale between two tenants, not a payment to the landlord, although the landlord still has to agree to the change.
The third shows up at the Land Office at the time of a sale: a buyer and seller agree that part of the price moves outside the registered contract. We cover that case separately below, because the risk is different from a rental key money payment.
We don't quote amounts or how often this happens on Phuket. We found no reliable official figures for how often key money is charged in Phuket or for typical amounts, and we don't want to repeat numbers we can't check.
Key money, deposit and goodwill
These three payments look similar in an advertisement and behave very differently in practice.
| Who pays, who receives | Refundable? | How it's taxed | Consent needed? | |
|---|---|---|---|---|
| Key money (entry fee) | Tenant pays the landlord | Only if the contract says so | Landlord's rental income | No extra consent beyond the lease itself |
| Deposit | Tenant pays the landlord | As a rule, yes, minus damage or unpaid rent | Depends on the terms of return; a deposit a company landlord is not unconditionally bound to repay can count as income on receipt (Revenue Department) | No |
| Goodwill (เซ้ง) | Incoming tenant pays the outgoing tenant | Not applicable — it's a sale, not a deposit | The outgoing tenant's taxable income | Yes, from the landlord (CCC s. 544) |
The deposit is meant to come back. Key money is not meant to come back unless you negotiated otherwise. Goodwill is the price paid to the outgoing tenant for the lease rights, not a refundable security deposit — and it's the new tenant who pays it, not the one who gets it.
What the law says
No statute we found defines key money or sets a cap on it, and nothing in Thai law bans it. That leaves the terms of your contract to do the work a statute would otherwise do.
The closest thing to a rule on amounts comes from the Office of the Consumer Protection Board (OCPB): for short-term and monthly-paid long-term residential leases, published summaries describe landlords who let out three or more residential units as limited to a deposit and advance rent that together don't exceed three months' rent (a different, annual cap applies where the long-term lease is paid yearly). Published summaries of this rule don't make clear whether a one-off, non-refundable key money payment counts toward that limit. Until an official clarification appears, we treat this as open rather than settled, and we would not advise a landlord to rely on key money to get around the cap.
Key money also doesn't change the basic shape of a lease. A registered lease is still capped at 30 years under the Civil and Commercial Code, and paying key money doesn't make a lease longer, more secure, or legally "special" in any other way.
Putting the payment in the contract
Because the law leaves this to your agreement, the agreement has to do real work. Before you pay key money, we suggest checking that the contract covers:
- the exact amount and what it's for, named as key money (or whatever term you use), not folded into "rent" or left undescribed;
- a clear condition for return if the lease ends early or if the property is sold during the term;
- the right to transfer or assign the lease: under section 544 of the Civil and Commercial Code, the lease must permit assignment or subletting, so we recommend recording the landlord's permission clearly in writing;
- a receipt or a bank transfer record, not a cash handover with nothing in writing;
- registration of the lease at the Land Office if the term runs longer than three years;
- the stamp duty and Land Office registration fee, since both are calculated on rent plus key money together, so the contract should say who pays them.
Our lawyers review lease and assignment contracts against this list before you pay anything. If you already have a draft, send it to us and we'll go through it with you.
When key money signals a scam
A few patterns are worth treating as red flags rather than as normal practice:
- cash handed over with no receipt and nothing written into the contract;
- a payment made "outside the lease", with the landlord asking you to keep it off the paperwork;
- money paid before anyone has checked that the person asking for it actually has the right to lease or sell the property.
Before you hand over a key money payment, or agree to any price split at a purchase, we recommend checking who actually holds the right to lease or sell — the landlord's title, or the seller's registered ownership — before any money moves. Due diligence on a property and its seller can help identify this risk before payment.
What to do next
If you're about to pay key money on a lease, or you're buying a lease right from an outgoing tenant, send us the contract before you sign. We offer a paid consultation to go through a lease or assignment agreement, work out what the key money clause actually commits each side to, and flag what's missing.
If you're buying property rather than renting, our free review of a purchase or reservation contract, completed within 48 hours, is the right starting point instead — that offer covers purchase agreements, not leases.
For the landlord's side of renting out property legally in Phuket, including the tax that applies to rental income, see our guide to renting out property legally. If you're weighing the cost of buying instead of leasing, our breakdown of taxes and fees on a condo purchase and our buyer's checklist cover the registered-purchase side in full. And if a developer or landlord has already failed to return money owed to you, an illustrative scenario involving a deposit refund after a delayed handover shows what that process can look like.
Phuket areas
The same laws apply across the island, but each area has its own particulars: what kind of property usually sells there, which documents prove rights to the land and what deserves a closer look before you buy.
Kata
In sea-view condominiums the 49% foreign quota usually runs out quickly, so we check it before you reserve a unit.
Patong
People buy condos here to rent out and open businesses that need licences.
Kamala
There are many branded residences here, homes sold under a hotel brand, and the management agreement needs careful reading before you buy.
Old Town
Many historic shophouses, buildings with a shop on the ground floor, are protected and can only be restored under special rules.
