Thai Cabinet Approves Lowering Transfer and Mortgage Fees to just 0.01%
To spur housing purchases, last week the Thai cabinet approved decreasing both mortgage fees and housing transfers to 0.01% for the next 12 months. The fee cuts from 2% and 1% will run until May 31, 2020 after publication in the Royal Gazette.
Part of a new stimulus package, worth 21.83 billion baht, included tax deductions of up to 200,000 baht to buyers of condos and buyers. The cabinet approved this last month with the condition that homes must be worth up to 5 million baht.
However critics said that earlier tax deductions of up to 200,000 baht for buyers had a small impact on the buying market. The Bank of Thailand implemented tougher mortgage-lending rules earlier this year as officials predicted a frothy housing market. In a fourth-quarter report, Colliers International said that it sees unsold properties accumulating and new condominiums falling by 24 percent this year. Meanwhile, Bloomberg Economics predicts the interest of Chinese investors will keep a floor under demand. In Thailand 454,814 residential units were unsold last year worth more than US$ 41 billion, according to Sopon Pornchokhai, president of the Agency for Real Estate Affairs.
Bangkok Metropolitan Region constitutes 40% of the total housing supply available and 55% of the total value of the outstanding housing inventory. The housing supplies include detached houses, townhouses, semi-detached houses owner occupied condominiums, shophouses and private residential housing developments.