Thailand’s property stimulus proposal – 3 Key Points
First-time purchasers benefit the most from Thailand’s property stimulus proposal.
In an attempt to rejuvenate Thailand’s lack-luster real estate industry, Finance Minister Sommai Phasee had not too long ago granted a stimulus package that aimed to increase the duration of property transfer procedures in the country, as reported by the Bangkok Post recently.
These measures should specifically help low-income households and first-time buyers.
What will Thailand’s property stimulus proposal mean for them and what are the proposal’s 3 key points?
- First-time home purchasers will be allowed to deduct 20% of their new purchase’s value directly from their personal annual income tax for the duration of five years (considering the home is worth 3 million THB (84,000USD) or less and is purchased by the end of the year 2016)
- GH Bank that is state-owned, are now granted to give mortgages at 50% of an applicants’ salary, up from 30%. This is a part of a 10 billion THB (280 million USD) scheme
- Both mortgage fees and housing transfer will be reduced to 0.01% from 2 and 1%, respectively. These reductions are only applicable and will be in place on homes that are priced below 3 million THB
Even though the measures suggested may or may not propel new demand in the residential market place, it should certainly help incentivise home purchasers to fasten the home transfer procedure, stated Suphin Mechuchep, the managing director of JLL Thailand.
The policies in place show a safe step towards assisting the residential market. Heightened transfer activity should increase developers’ financial strength, leading to newer investments, thereby adding to Thai growth,” Suphin Mechachep concluded.
One developer going full-throttle with investments and promoting the growth of the residential sector in Thailand is Sansiri and their collaboration with the BTS Group, BTS-Sansiri Holding that not too long ago launched 10 residential projects in Bangkok in Q4 2015, to be precise.
The recently announced projects that are part of BTS-Sansiri aims to construct multiple residential projects on plots of land along the capital’s BTS service routes between now and the year 2019. The initial 10 projects will be valued at around 21.5 billion THB (598 million USD) and will be made up of around 5 detached housing and 5 condominium projects.
There was a hope that these new projects could help the Sansiri group attain their target of 33 billion THB (930 million USD) in pre-sales in the year 2015 – they had made 20.5 billion THB (580 million USD) in the first 3 quarters alone.
The total valuation of the BTS-Sansiri venture is expected to reach the 100 billion THB (2.8 billion USD) mark!
Keyphrase – Thailand’s property stimulus proposal