Policymakers in the Finance Ministry recommend the government implement measures to improve the property sector, helping to stimulate the economy next year, says a ministry source who requested anonymity.
The source said the government should renew measures to reduce the ownership transfer and mortgage fees, which are due to expire at the end of this year. Policymakers suggest renewing the measures for another year.
Such measures seek to reduce ownership transfer fees from the normal rate of 2% of the appraised value to 1% for a house worth 3 million baht or less, and to reduce mortgage registration fees from the normal rate of 1% to 0.01% for mortgages of 3 million baht or less per contract.
In addition, the ministry proposed to the Bank of Thailand renewing softer loan-to-value (LTV) limits for mortgage lending, allowing homebuyers to take out loans of up to 100% for all home prices as the property sector plays a vital role in driving the economy.
Since the eased LTV limits ended on Dec 31, 2022, obtaining home loan approvals has become much more challenging.
Based on the eased limits, buyers of first homes valued at less than 10 million baht can take out loans of up to 100% of the price and receive an additional 10% credit for decoration, while second-home buyers for residences priced less than 10 million baht can take out loans of 70-90% of the price.
The central bank issued the LTV rule to decelerate artificial demand and property supply. The ministry sees no evidence of a property bubble in Thailand while interest rates remain high, said the source. As a result, there are few signs of speculation and the ministry wants the central bank to consider easing the LTV limits, said the source.