Property developers in Thailand believe tax incentives can help restore housing demand over the last few months of 2015 and have urged the government and its new economic cabinet to implemented them, The Bangkok Post reported.
Demand was already soft and developers believe it will be weakened further because of the recent bomb attack in Bangkok. According to Thongma Vijitpongpun, president and chief executive of Pruksa Real Estate Plc., cutting property tax and transaction fees would help stimulate the economy in general and the property market.
The drastic cuts he proposed included the property transfer fee being reduced to 0.02 percent from 2 percent, the mortgage fee cut to 0.01 percent from 1 percent and special business tax slashed to 0.01 percent from 3.3 percent. Housing units priced THB2 million or lower would be eligible for the cuts, which would help low-income earners to afford their own home, Thongma told the newspaper.
“If these incentives were applied to higher-priced segments, annual tax revenue could miss the target,” he added.
An economic stimulus could be important for the overall economy during the rest of 2015 and full-year GDP growth would largely depend on it as well, Atip Bijanonda, president of the Housing Business Association (HBA), said.
“We’re not worried about new-home transfers in the rest of the year, as those will keep growing,” he said. “But new-home sales are a concern due to unfavourable market sentiment in the housing sector and the weak economy, which is expected to be dampened further by the deadly bombing.”
The HBA revised this year’s housing market forecast to only zero to 5 percent growth down from the original 5-10 percent growth, the Post noted. Atip suggested developers stay focused on their cash flow and exert a more cautious approach with new projects being launched between now and the end of 2015.
