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News Release


Housing Market Stimulus Measures Welcomed

Though these measures are for a short term, it is a welcome step that will benefit Thailand’s housing sector.

As numerous observers and analysts continue to trim their expectations for Thailand’s macro-economic outlook over the next 12-18 months, the national government has announced a broad menu of stimulus measures to combat slowing growth. These include financial stimuli to help the residential sector announced on 13 October:
  • The ownership transfer fee of freehold real estate of 2.00% of a property’s assessed value and the mortgage registration fee of 1.00% of the value of the loan will be reduced to 0.01% from 19 October to the end of April 2015.
  • First-time buyers who purchase a residential unit worth not more than THB3 million by the end of 2016 can deduct 20% of the value of the unit from their annual taxable personal income, with the deduction being divided in equal amounts over a period of five years. 
Though these measures are for a short term, it is a welcome step that will benefit Thailand’s housing sector, particularly Bangkok’s softening condominium market along extended mass transit system where condo supply priced less than THB 3 million have mushroomed, according to JLL, a professional services firm specialising in real estate.

Mrs. Suphin Mechuchep, Managing Director of JLL, said “Though the proposed short-term measures are unlikely to help boost new demand in the residential market, it should help incentivize home buyers to make a purchase decision faster and accelerate an ownership transfer process.”

While the tax incentive for first-time home buyers is likely to create a stronger impact as it helps increase affordability for buyers, the reduction in the two transaction fees will encourage serious prospective buyers to purchase backlogged units in completed housing estates and condominium developments and residential projects whose construction will complete before the stimulus measures expire. 

However, JLL does not expect the reduction of these fees to have a big impact on less serious prospective buyers. “Though the ownership transfer and mortgage registration fees collectively account for about 40% of the typical transaction costs for residential real estate in Thailand, they do not represent a significant proportion of the total transaction value,” said Mrs. Suphin.

“Having said that, these stimulus policies represent a safe step towards helping the softening residential sector. Increased housing transfer activity should help boost developers’ financial strength and enable them to invest in new projects -- private investment that Thailand needs to help drive its macroeconomic growth,” Mrs. Suphin concluded.