Thai Gov’t Raises Threshold for Reduced Transaction Fees on Property Priced from US$90k to US$258k

• Sommana Yan
• 5 May 2024
• International News
• 1606 Views

The Thai government has unveiled a series of initiatives aimed at revitalising the country’s real estate sector. Among these measures is the approval by the Thai cabinet to increase the minimum tax rate on home and condominium transactions to 7 million baht, approximately US$209,000, as reported in a government statement released on Tuesday 9 April 2024, and updated by Businesstimes.

Previously, residential properties valued at 3 million baht or US$90,000 were eligible for a tax deduction ranging from 2% to 0.01%. This existing measure, first introduced in 2022, has now been revised to include properties valued up to 7 million baht under the tax deduction scheme.

Additionally, the government has approved tax incentives for individuals constructing their own homes and raised the minimum tax rate for real estate transactions for companies eligible for the Investment Council’s tax incentives from 1 million baht (US$27,491) to 1.5 million baht (US$41,236).

According to Veeravat Virochpoka, an analyst at Finansia Syrus Securities, these measures are expected to stimulate market interest and accelerate property transfers within the US$90,000 to US$209,000 price range. He highlighted that buyers in this segment often have favourable loan approval rates, translating to increased accessibility to bank financing.

The Real Estate Developers’ Quality Index surged by 2.1%, marking the second-highest increase among the 28 companies listed on Thailand’s stock market. Sansiri and SC Asset, formerly owned by Thai Prime Minister Setha Thaksin Shinawatra’s family, saw their shares rise by 3% and 4.3%, respectively. Other prominent developers such as Land & Houses, AP Thailand, and Origin Property also experienced gains of over 2%.

As part of the government’s initiative, Setha Thaksin’s administration will waive taxes amounting to approximately 1.99 billion baht (over US$54 million) monthly on new incentives for the real estate sector, effective until 31 December 2024.

• Laws and Regulation