The government 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 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 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 government forecasted the fee deductions will 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 for foreign investment, Mr Krisada said the cabinet 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.
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.
The measure is expected to lift industry sentiment and accelerate the transfer of houses worth between 3 million to 7 million baht.
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.
He said under the implementation of the measure, the Thai economy this year will grow at least 4% based on the assumption that the measure will stimulate the economic growth about 1.7%-1.8%.
