Thailand Approves New Measures to Boost Property Sector

Anuchit Nguyen
·2 min read

(Bloomberg) -- 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.

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The Cabinet approved a proposal to increase the threshold for lower transaction fees for houses and condominiums priced up to 7 million baht ($191,330), according to a government statement Tuesday. 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 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 Pcl, wrote in a note 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 2.8% to a three-month high and was the third biggest gainer among the Stock Exchange of Thailand’s 28 industry groups. Sansiri Pcl, which was previously run by Prime Minister Srettha Thavisin, climbed 4.1%. SC Asset Pcl, controlled by Thaksin Shinawatra’s family, jumped 4.8%. Land & Houses Pcl, AP Thailand Pcl and Origin Property Pcl, rose more than 3% each.

“Th new measures will help spur economy through higher investments in the property sector,” said Pornchai Thiraveja, director-general of the Fiscal Policy Office. “This will boost employment and manufacturing activities, which will benefit the overall economy.”

Srettha’s administration will forgo 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.

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. The bank will allocate another 10 billion baht loans for home purchases, construction and renovation.

Government Savings Bank will lend about 10 billion baht for home buyers and another 10 billion baht for developers and contractors. The government will also review rules on foreign ownership of residential properties to make them more attractive to international investors, according to Pornchai.

(Adds government official’s comment in sixth, final paragraphs.)

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