An aid package for the property sector that includes a temporary cut of mortgage and transfer fees to a single rate of 0.01% for homes priced at up to 3 million baht will seek cabinet approval this month.
The package is expected to last six months and is meant to help property developers sell off their inventory, said a source at the Finance Ministry who requested anonymity.
The measures will be enforced after the Interior Ministerial Announcement takes effect, the source said.
At present, property transfer and mortgage fees are 2% of appraisal or selling prices, whichever is higher, and 1% of home loans, respectively.
The source said the measures aim to alleviate the financial burden of real homebuyers.
Transfer and mortgage fee reductions in the past proved successful in lifting property sales, the source said.
Putting a cap on homes with price tags of up to 3 million baht will help middle- and low-income earners who want to own their own home, the source said.
For houses priced at 1 million baht, buyers are subject to 200 baht total in transfer and mortgage fees if the measures come into force, instead of 30,000 baht.
The country's sluggish economy and the Bank of Thailand's loan-to-value (LTV) regulations that took effect on April 1 have dealt a blow to the property sector.
Of the 553 condo projects recorded in metropolitan Bangkok during the first half this year, there were 64,969 unsold units valued at a combined 265 billion baht, up 38.4% year-on-year, according to GH Bank's Real Estate Information Center.
Total unsold properties amounted to 152,149 units at 1,670 projects, with a combined value of 670 billion baht.
The centre estimates that property sales will shrink by 5-7% this year.
Finance Minister Uttama Savanayana said the ministry is seeking measures to shore up the property sector, focusing on middle- or lower-income earners, first-time homebuyers and those affected by the central bank's measures.
Prime Minister Prayut Chan-o-cha recently instructed the Finance Ministry to develop measures to help residential property developers.
The tougher LTV rule is aimed at curbing rising mortgage non-performing loans and improving housing credit standards.
The rule requires homebuyers to make a minimum down payment for third and subsequent mortgages at 30% of the home price, with second mortgages set at 10-20%.