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Tax Incentives to End for the Property Sector

By on Feb 23, 2010 in Property News

According to the Bangkok Post the deputy finance minister Pradit Phataraprasit announced that the tax incentives for property will end on March 28, 2010.

This means that transfer tax will go back up to 2% of assessed value from 0.01%.

Certain vendors including property developers will pay 3.3% specific business tax up from 0.11%.  Mortgage registration will increase from 0.01% to 1%.

These taxes affect completed property so the announcement will create an incentive for developers with unsold completed inventory to sell and transfer before the expiry.

We do not expect that the announcement will have a significant impact on off plan launches but it will affect developers’ profit margins as developers pay the specific business tax.

They may want to raise prices to compensate for the extra tax but we think the volume of competing projects scheduled to be launched this year may keep prices roughly level for similar products in similar locations.

The increase in mortgage registration means that it will be more expensive for borrowers to switch lenders once special introductory interest deals expire.

Aliwassa has been the Managing Director οf CBRE Thailand for a number of years. As a Thai national, Aliwassa is extremely knowledgeable about the sale of property in Thailand, specifically large scale high value condominium developments largely in Bangkok.

3 Comments

Colin Baker

Isn’t there a 30 day notice period required for the transfer of a property meaning that the deadline to take advantage of the reduced SBT rate has in effect already passed?

Admin

Hi Colin,

Freehold condo: no 30 days notice required.
Freehold house with land: if house owner and land owner are not the same person, need 30 days notice after submitting completed documents.

Sigi Marty

Dear ALL,

How a Free hold House scenario is possible when Faragn can not own the land anyhow and all have to go through Thai company.
How in a free hold House scenario is possible that the owner and landowner would NOT be the same , again because Faragn can not own land on his own name ; exept on Thai name.
Or in a very exceptional situation possible of Faragn men married with Thai wife, land on Thai wife name and house blue book on faragn men’s name, in this case 30days notice is applicable ?
Thanks for your reaction.
Regards,
Sigi Marty








 

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