The cabinet on Tuesday approved fresh property measures, including new cuts of the transfer fee and raising the limit for home and condo prices eligible for the transfer and mortgage registration fee benefits to 7 million baht, up from the current level of less than 3 million.
According to Deputy Finance Minister Krisada Chinavicharana, the cabinet endorsed a raft of measures to promote home ownership and stimulate the real estate sector and related businesses.
The measures include reducing the transfer fee from 2% to 0.01% of the transaction value, and slashing the mortgage registration fee from 1% to 0.01% of the transaction value.
The measures apply to the sale of residential properties such as single houses, duplexes, townhouses, commercial buildings, land with buildings, and condominium units, with a purchase price and assessed property value not exceeding 7 million baht.
The mortgage amount must not exceed 7 million baht per contract.
The measures are meant to reduce the burden on property buyers and stimulate the real estate sector, which contributes up to 10% of GDP, he said.
To qualify for similar current reductions to the transfer and registration fees, units could not exceed 3 million baht in value.
According to Mr Krisada, the new measures are limited to Thai nationals.
The measures come into force the date they are published in the Royal Gazette, ending on Dec 31, 2024.
TAX DEDUCTION
In addition, a tax deduction is offered to individual taxpayers wanting to construct a house, allowing a deduction for construction expenses paid to contractors who are registered value-added tax operators for payments made from April 9 through to Dec 31, 2025.
The tax deduction is 10,000 baht for every 1 million baht of construction costs paid, up to 100,000 baht specifically for construction costs for one house in the tax year the construction was completed.
The contract must be initiated and construction commenced from April 9, 2024 until Dec 31, 2025, with the stamp duty paid electronically via the internet.
Other measures include the promotion of residential projects for low-income earners as part of a Board of Investment (BoI) housing project.
The BoI announced on March 15, 2024 it planned to grant tax benefits to real estate developers, including an exemption from corporate income tax for three years, for up to 100% of the investment amount (excluding land and working capital) for the construction of residential properties for low-income earners.
These units can have a maximum value of 1.5 million baht, including the land price.
ECONOMIC BOOSTER
Pornchai Thiraveja, director-general of the Fiscal Policy Office, said the new property measures are estimated to increase the GDP by 1.7-1.8 percentage points, with a total property transaction value of about 800 billion baht and estimated new investment of 400-500 billion baht.
The tax breaks are estimated to stimulate spending of 120 billion baht, he said.
Kessara Thanyalakpark, managing director of SET-listed Sena Development, said the property measures approved by the cabinet can help the sector and economy in the long run.
"The measures can stimulate home demand and purchasing power as homebuyers deal with a slowing economy, high household debt, inflation, elevated interest rates and stricter lending rules," said Ms Kessara.
She said the measures can also encourage some potential homebuyers to make a decision who may have delayed a purchase because they are not confident about the economy, eager to benefit from the measures.
In particular, people seeking to buy units priced from 3-7 million baht can benefit as the new measures now cover this price range, up from the earlier limit of 3 million baht, said Ms Kessara.