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Thailand property sector – the next stimulus target?

By on Oct 05, 2015 in Property News, Residential

Is now the time for stimulus activities for the property sector in Thailand? The current Finance Minister, Apisak Tantivorawong says measures to stimulate the property sector will soon be completed.  Apisak says, waiving the transfer and mortgage fees is not the main issue, more important are mortgage approvals, as rejection rates by financial institutions are very high at the moment.

3 real estate associations and major developers recently proposed tax incentives for the property sector to the new team of economic ministers. The tax incentives included dramatically reducing housing transfer fees from 2% to 0.02% and mortgage fees from 1% to 0.01% for properties below 2 million baht.

Due to the extensive economic uncertainty, increasing household debt banks are continuing to to tighten loan approvals. Normally mortgage rejection rates are between 25-30%. They have now jumped to between 30-35%.

Mr Apisak said the Finance Ministry would develop an e-payment system that could be accessed by rural residents which would also give low income earners privileges, such as free public transport.  The system could also be used to reduce tax avoidance. Sadly there has been a lack of co-operation from all relevant parties.

The government is now considering granting a special corporate income tax for major high tech industries located within Thailand.

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Source: Bangkok Post 24th September 2015, Apisak: Property sector tapped to be the next stimulus target.

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