Supalai sees potential in tax tweaks
SET-listed developer Supalai Plc (SPALI) still expects weak sentiment in the property sector for the rest of the year, while acknowledging that possible tax incentives could give a boost to housing sales.
Deputy managing director Tritecha Tangmatitham said many property developers were pinning their hopes on the proposed tax incentives, which the economic team led by Deputy Prime Minister Somkid Jatusripitak hopes will speed up new housing transfers.
Three real estate associations asked the cabinet in August to consider tax incentives, including a cut in the housing transfer fee to 0.02% from 2% and a cut in the mortgage fee to 0.01% from 1%.
If approved, the incentives will apply to housing units priced below 2 million baht.
"The tax incentives will help accelerate the transfer of purchased units in condominium projects launched in the past year," Mr Tritecha said.
Earlier tax incentives were used by previous governments to stimulate the property market and economy for a short period, such as three or six months.
Those measures failed to boost new demand in the condo sector, as most newly launched projects during the incentive period would take a few years to finish construction.
They did, however, boost new sales of low-rise units and detached houses that were ready to transfer during the effective period. Some unsold condo units that were ready to transfer benefited as well.
As of June 30, Supalai had unsold units worth a combined 43.8 billion baht. Of this batch, units priced at less than 2 million baht and ready to transfer this year represented 10% of the total.
"The country's economic fundamentals remain weak," Mr Tritecha said. "If the tax incentive measure is applied, we estimate our sales will rise by 10-15% as new demand takes a month or two for decision-making."
Supalai recorded 12 billion baht in presales during the first eight months and expects to have 23 billion baht by year-end.
Despite unfavourable sentiment, it plans to launch four new condo projects worth a combined 10.3 billion baht.
SPALI shares closed yesterday on the SET at 19 baht, up 40 satang, in trade worth 191 million baht.