Thailand approves new measures to boost property sector

Thailand’s government unveiled a slew of new measures including cuts in property registration and transfer fees to revive the nation’s residential real estate market.

The Cabinet approved a proposal to increase the threshold for lower transaction fees for houses and condominiums priced up to 7 million baht (S$258,053), according to a government statement on Tuesday (Apr 9). Currently, only residential properties valued at a maximum of 3 million baht are eligible for a cut in registration fee to 0.01 per cent from 2 per cent that was first announced in 2022. 

The government will also extend a reduction in mortgage fees to properties valued up to 7 million baht. 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 Board of Investment’s tax incentive to 1.5 million baht from 1 million baht. 

The measures will help lift industry sentiment and speed up the transfers of houses in the 3 million baht to 7 million baht price range, Veeravat Virochpoka, an analyst at Finansia Syrus Securities, wrote in a note on Tuesday. Buyers of those residential properties are the major customers with a low rejection rate for mortgage loans, he said. 

A measure of property developers jumped 2.1 per cent, the second-biggest gainer among the Stock Exchange of Thailand’s 28 industry groups. Sansiri, which was previously run by Prime Minister Srettha Thavisin, climbed 3 per cent. SC Asset, controlled by Thaksin Shinawatra’s family, jumped 4.3 per cent. Land & Houses, AP Thailand and Origin Property, rose more than 2 per cent each. 

Srettha’s administration will forego about 1.99 billion baht of fees per month from the fresh incentives for the industry, which will last until Dec 31, according to the statement. 

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The state-owned Government Housing Bank will also extend an additional 20 billion baht of new mortgage loans at lower interest rates for low-income borrowers to buy new houses, the government said. BLOOMBERG