Reduced homebuyer fees help market stay active
A renewal of the reduced property tax measures for another year can help boost housing demand and purchasing power, says a property consultancy, even as the cut in transfer and mortgage fees remains capped at 3 million baht a unit.
Phattarachai Taweewong, director of research and communications at Colliers International Thailand, said the measures help developers and consumers.
The cut in transfer and mortgage fees from 2% and 1%, respectively, to 0.01% should not be capped for units priced 3 million baht and lower, he said.
"It should be applied to all price ranges, or at least up to 10 million baht."
The cabinet on Tuesday announced an extension of the property-related measures.
One measure was a reduction of the land and building tax by 90% for another year in 2021.
The other was a cut in the transfer and mortgage fees to 0.01% until the end of the year for new residential units with an appraisal price of 3 million baht and lower, which ran from Oct 22, 2019 to Dec 24, 2020.
The two measures were among five proposals three property associations (comprising the Thai Condominium Association, the Housing Business Association and the Thai Real Estate Association) submitted on Dec 9.
They asked for a cut in transfer and mortgage fees with no ceilings on unit prices and an expansion to second-hand units, while the reduction of the land and building tax was requested for two years covering 2021-22.
Vichai Viratkapan, acting director-general of the Real Estate Information Center, said the cut in transfer and mortgage fees can help catalyse the property market, as happened in the fourth quarter of 2015 to the second quarter of 2016, when the measure was last applied.
The fourth quarter of 2015 set a record with 63,869 units sold, compared with a five-year average of 45,300 units per quarter, suggesting the measure was good for the industry and built homebuyer confidence, said Mr Vichai.
Saenphin Sukhee, chief executive of Frasers Property Home, a business unit of SET-listed developer Frasers Property Thailand, said the latest approval can boost market sentiment.
"It is capped at 3 million baht and lower because the government wants to help stimulate residential demand in the mid- to lower-income segment," he said.
Piya Prayong, chief executive of housing developer Pruksa Real Estate, said cutting the transfer and mortgage fees can help reduce homebuyers' burden.
Pruksa and Frasers indicated they may introduce campaigns such as cash discounts, an instalment waiver of up to 36 months, and a waiver of all transfer-day expenses or common area expenses.