Property/new measures

Editorial staff

New property measures are projected to boost 800 billion baht in property businesses

The cabinet yesterday approved new measures to boost the property industry and projected such measures would help boost 800 billion baht in property transactions and could lift GDP growth to 4%

Pornchai Thiraveja, director of the Fiscal Policy Office, said the measures are projected to boost about 800 billion baht in property transactions, about 400 billion baht in investment and 120 billion baht in consumption.

Under its implementation, he said the Thai economy this year is expected to grow no less than 4%, based on the assumption that such measures help stimulate the economic growth about 1.7%-1.8%.

The government has extended a reduction in mortgage fees to properties valued up to seven million baht, up from currently a maximum of three million baht in bid to boost the Thai economy.

Prime Minister Srettha Thavisin said the cabinet approved a proposal of the Finance Minister to boost the Thai economy through new measures to stimulate the property business in order to upgrade Thailand to become a hub of the global property industry.

Deputy Finance Minister Krisada Chinavicharana said the cabinet endorsed reducing transaction fees for houses worth up to seven million baht, with ownership transfer fees and mortgage registration fees cut to 0.01% from 2% and 1%, respectively.

Currently, only residential properties valued at a maximum of 3 million baht are eligible for a cut in registration fee to 0.01 % from 2 % that the previous government endorsed in 2022.

The measures are expected to lift industry sentiment and accelerate the transfer of houses worth between 3 million to 7 million baht.

The government forecasted the fee deductions would result in revenue loss of about two billion baht.

The government also offers home loans worth 30 billion baht from the Government Housing Bank, tax breaks for property developers, and tax deductions of up to 100,000 baht for people who want to build their home.

In order to attract foreign investment, Mr Krisada said the cabinet has asked related agencies to consider easing rules on foreign ownership of Thai property.

Currently, foreigners can only own up to 49% of a condo building in Thailand while the other 51% must remain Thai-owned.

In addition, the ministry will ask the Bank of Thailand to relax loan-to-value (LTV) rules for property while previously Mr Srettha said LTV rules should be removed.

The cabinet also approved tax incentives for individuals who build their own houses and raised the threshold of value of properties developed by companies that are eligible for the Board of Investment’s privileges to 1.5 million baht.

Permanent Secretary to the Finance Ministry Lavaron Sangsnit hopes the Thai economy will recover to appropriate growth level again.

He said the government's implementing fiscal policy to stimulate the economy remains necessary to boost the Thai economy.