Bangkok, “Phaopoom” reveals plans to reduce land and building taxes. Ready to provide home loans with low interest rates Point out that taxes must not aggravate the people during a time when the Thai economy is still weak. Emphasize that the Thai bank is too strict in granting loans to the point of not helping support the expansion of the economy.
Mr. Paophum Rojanasakul, Secretary to the Minister of Finance Chairing the opening of the seminar ‘Real Estate, main economic indicators in 2024’ along with giving a special speech on the topic ‘Government policy towards supporting the real estate sector’ stating that the overall picture of Thailand’s real estate sector on the supply side has increased in the 4th quarter of 2023 to 7.7%, but is still 2.7% lower than the pre-COVID period as a result. This comes from the adjustment of operators who have reduced their request for licenses. As for demand, the amount of ownership transfers during the 3rd quarter of 2023 decreased by 4.2%, but if you look at sales durin
g the 4th quarter of 2023, it increased by 24%. Positive signs from the adjustment of both entrepreneurs and the needs of the public sector. It is expected that this year we will see a decrease in excess supply. and the increasing demand for purchasing by the public sector from economic recovery
As for the outlook for the real estate sector in 2024, it is expected to improve from government measures. Adjustment of entrepreneurs and the private sector But we still need to watch out for economic signals from both inside and outside the country. Geopolitical issues Strict lending which is important to the real estate sector Low inflation It reflects the purchasing power of the people that has not yet recovered. Including household debt that reduces purchasing power in the country, he confirms that the government is giving importance to the real estate sector. which is a mechanism for driving the economy The government aims to maintain stability in the real estate sector that has been affected in many ways. But
he stressed that it must not affect development potential.
‘Improving land and building tax rates It’s a delicate matter. But it is seen that the current Thai economic situation is not expanding very well. And also so weak the tax rate, whether it is land tax etc. or other taxes Whatever is adjusted must be adjusted. Anything that should be added must be added. But taxes must not be a burden and aggravate the people. Including the economy,’ Mr. Paophum said.
In 2024, the government has measures to stimulate the real estate sector. which is a tax measure and monetary measures The tax measures consist of 5 measures:
1. Reduce personal income tax for income paid as interest on loans. For borrowing money to buy, hire purchase, or build a residential building, not more than 100,000 baht to relieve the burden of those with income.
2. Reduction of land and building tax by 90 percent of the tax payable to land or buildings of entrepreneurs under development for no more than 3 years in order to relieve the tax bur
den on entrepreneurs during construction.
Exemption from land and building taxes For common property that is intended for common use by co-owners according to the condominium law. Land which is a public utility according to the law on land allocation. and the law on the Industrial Estate Authority of Thailand
4.Extension of land and building tax collection time For general land tax collection in 2024, it will be extended for another 2 months.
Measures to reduce fees for registration of rights and legal acts for residences Reduce the transfer registration fee from 2 percent to 1 percent and reduce the mortgage registration fee from 1 percent to 0.01 percent registered in 2024.
Financial measures consist of 2 measures.
Million House Project Supporting people to own their own homes at a price that is not high by GH Bank supporting soft loans with a credit limit of 20,000 million baht. The loan amount per individual is not more than 1.5 million baht. The maximum loan term is not more than 40 years. The inter
est rate is fixed at 100%. 3 per year for 5 years
2.Happy Life Loan Project encourages people to own their own homes. Loan amount per customer is 2.5 million baht or more. The maximum loan period does not exceed 40 years. The average interest rate for 3 years is 2.98 percent per year. The lowest interest rate is in the first year at 1.95 percent per year.
Mr. Paophum also gave an additional interview on the case of the real estate sector calling on the Bank of Thailand (BoT) to renew measures to relax the rules on mortgage loan supervision. and loans related to housing loans (LTV) that expired on December 31, 2022, the Ministry of Finance has discussed debt issues with BoT continuously, although at this time the BoT still does not agree. But the Treasury will continue to discuss. Including credit measures of financial institutions. Because they think there must be measures to support the real estate sector. of Thailand to expand further. To help drive the Thai economy this year We cannot look at it in one d
imension. Lending loans to people will create debt. Or will it just cause household debt levels to rise? But it must be viewed in terms of positive effects on the economy as well. It is necessary for us to pay attention to being careful of risks. But it must not affect growth. or the development of the economy
In addition, the strictness of lending by financial institutions It’s not just a problem for the real estate sector. But it is also a problem of the overall Thai economy. Thailand’s financial institution sector remains strong. But it is still not a good enough mechanism to drive the economy. Therefore, there must be a need to develop greater exposure to risk. To help people access more credit and funding sources. By having to find a balance between stability with economic potential which at present is considered to be unbalanced Because it still depends too much on stability rather than potential.
As for the situation of a lot of housing remaining for sale, The government saw that It is another proble
m in Thailand. Especially since the Covid period, the supply both horizontally and vertically, with the amount remaining for sale gradually increasing. Because the economy is not good causing people to have no purchasing power Now the issue of supply has become more adjusted. When the original supply is still available The supply must be adjusted to reduce in order to balance the real purchasing power of the people.
However, the government should not touch market mechanisms. between the adjustment of supply and demand to expand equally You have to let it happen naturally. The state merely facilitates these mechanisms to work faster and more efficiently. Therefore, we need tax measures. To increase purchasing power for the people And there are financial measures to help the people.
Source: Thai News Agency