Reaping the property stimulus rewards
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Reaping the property stimulus rewards

An accounting of all the parties that could benefit from the new package

Miniature house models on display at a recent property fair. The BoI announced on March 15, 2024 it plans to grant tax benefits to developers that construct residences for low-income earners. (Photo: Varuth Hirunyatheb)
Miniature house models on display at a recent property fair. The BoI announced on March 15, 2024 it plans to grant tax benefits to developers that construct residences for low-income earners. (Photo: Varuth Hirunyatheb)

The cabinet last week offered Thai New Year's gifts to potential homeowners, approving measures that extend the price range of houses eligible for a cut in transfer and mortgage registration fees to 7 million baht, up from a ceiling of 3 million baht.

Amid sluggish spending and slow GDP growth projected for this year, the government hopes the measures will entice people who still have strong purchasing power, as expensive low-rise houses are predicted to have strong sales this year.


Deputy Finance Minister Krisada Chinavicharana said the measures last week supported home ownership and aimed to create an economic impact in the property sector and related businesses in the supply chain, which is estimated to account for 10% of GDP.

The government previously offered a discount on transfer fees from 2% to 1% of the transaction value for homes priced up to 3 million baht, but the new stimulus trims the fee to 0.01%.

The reduction on the mortgage registration fee from 1% to 0.01% of the transaction value remains the same.

The new measures apply to 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.

They can either be new or second-hand properties.

The mortgage amount must not exceed 7 million baht per contract.

The new measures are limited to Thai nationals and are effective once published in the Royal Gazette, ending on Dec 31, 2024.

In addition, individual taxpayers wanting to construct a house can receive a tax deduction on construction expenses paid to contractors who are registered value-added tax operators for payments made between April 9, 2024, and Dec 31, 2025.

The tax deduction is 10,000 baht for every 1 million baht of construction expense, up to 100,000 baht specifically for construction costs for one house in the tax year the construction was completed.

The contract must be signed, with construction running from April 9, 2024 until Dec 31, 2025.

People explore deals for units at a recent property fair. (Photo: Varuth Hirunyatheb)

Another measure covers 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.


The latest property measures could have a significant impact on the residential market as they cover both the low-end and middle- to upper-end segments, including self-built homebuyers.

Expansion of the price maximum to 7 million baht for the reduced transfer and mortgage fees is expected to have a major effect on supply and demand, according to property researchers.

This extension should stimulate home demand for units priced between 3-7 million baht, a segment which has never received government support before.

This segment of housing units priced between 3-7 million baht is quite large chunk of the supply.

According to a market survey in the fourth quarter of last year by the Real Estate Information Center (REIC), new sales of units priced at 3 million baht and lower in Greater Bangkok totalled 9,411 units worth 22.5 billion baht.

Sales of units priced between 3-7.5 million baht totalled 6,256 units worth 30.2 billion baht, accounting for 66%.


The pricing extension to a maximum of 7 million baht per unit reflects how housing prices have increased every year, driven by both land and development costs.

If house prices rise by 3% per year, a unit priced at 3 million baht five years ago will now be priced 3.45 million baht in the same location.

The new measure can encourage homebuyers to purchase a unit by saving on transfer and mortgage fees.

Developers will benefit as many of them have housing inventory in the price ranges covered by these measures.

According to REIC, the remaining residential supply in Greater Bangkok at the end of 2023 totalled 209,894 units worth around 1.17 trillion baht.

Of this number, 80,878 units worth 386 billion baht were priced between 3-7.5 million baht.

One of the new measures offers mortgages with an interest rate ceiling of 3% for units priced at 3 million baht and lower, up from 1.5 million baht and lower.

This measure should help the mid- to lower-end segments access finance with low interest rates, according to a statement issued by seven property associations.


Developers view these measures as beneficial for both the property sector and related businesses, as residential supply nationwide, for both new and second-hand units priced 7 million baht and lower, accounts for more than 85%.

Related businesses such as construction materials, furniture, electrical appliances, decorative items, employment, and utilities such as electricity and water supply should also reap benefits from the measures.

Financial institutions restructuring debt by selling residential properties that serve as collateral should be able to do so more easily with these measures, said the property associations.

These measures, though they are short term, remain necessary as the economy continues to slow, said the associations.

The measures include self-built homebuyers, which could stimulate people who have delayed making a decision in that segment.

The measures also encourage homebuilders to register as legal entities, from which the government will eventually collect taxes, said the associations.

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