Contractors push for tax incentive

Contractors push for tax incentive

People look at a model of a condo at a housing expo. According to the Real Estate Information Center, the residential market nationwide was valued at 1 trillion baht in 2022.
People look at a model of a condo at a housing expo. According to the Real Estate Information Center, the residential market nationwide was valued at 1 trillion baht in 2022.

The government should offer tax incentives to buyers of self-built homes as it can contribute to the economy, increase stamp duty revenue and deter irresponsible builders, says the Home Builder Association.

Olran Chanphu, the association president, said the government should offer personal income tax deductions for buyers of self-built homes, with a proposed rate of 10,000 baht for each 1 million baht spent on home construction and a maximum deduction of 100,000 baht.

"Eligibility should be restricted to buyers of houses from homebuilding companies that are legally registered with the Commerce Ministry," he said. "This should help increase government revenue from stamp duties and safeguard against irresponsible individual contractors."

According to the Real Estate Information Center (REIC), the residential market nationwide was valued at 1 trillion baht in 2022. Of the total, condos and low-rise houses in projects comprised 800 billion baht, and self-built homes accounted for 200 billion baht.

Of the self-built home market value, 12.5 billion baht was accounted for by members of the Home Builder Association, while the remainder belonged to non-members and individual contractors.

Vichai Viratkapan, acting director-general of REIC, said the self-built home market has been rising since 2018 and was not slowed by the pandemic.

During the first nine months of 2023, the number of self-built homes receiving home loans nationwide totalled 185,446 accounts, valued at a combined 164 billion baht, compared with 183,879 accounts worth 156 billion for the entirety of 2022.

The number and value in 2022 rose by 2.3% and 7.4%, respectively, from 179,809 accounts worth 145 billion baht in 2021, which represented gains of 2.7% and 8.2%, respectively, from 175,123 accounts worth 134 billion baht in 2020. The annual growth rate in 2020 and 2019 was 1.4% and 2.5%, respectively, in terms of accounts, and 8.5% and 9.5%, respectively, in terms of value.

"In the first nine months of this year, the number of allocated land permits in Greater Bangkok that were expected to be self-built homes was higher than that of townhouses, single detached houses and twin houses in projects," he said.

According to REIC, roughly 42,000 self-built homes nationwide are projected in 2023 with a combined usable area of 16.8 million square metres.

"If the estimated construction cost is 12,000 baht per sq m, the self-built home market value would be 202 billion baht," said Mr Vichai.

In Greater Bangkok, the number of self-built homes is projected at 6,000 units valued at 30 billion baht, accounting for 30% and 15% of the single detached housing market, respectively, according to REIC.

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