[BANGKOK] Thailand will reduce property registration and transfer fees to revive a real estate industry battling an oversupply as more buyers turn wary of condominiums after an earthquake last month damaged thousands of skyscrapers in the Thai capital.
The cabinet approved a cut in property ownership transfer fee to 0.01 per cent from 2 per cent for condominiums, landed houses, commercial buildings or land with buildings priced up to US$202,000 until June 30 next year. It also agreed to slash mortgage registration fee for properties of similar value to 0.01 per cent from 1 per cent.
The fee cuts, first introduced in 2022 and allowed to lapse after multiple extensions at the end of last year, are being revived on demand from the real estate industry which has seen sales decline year after year. The move follows a relaxation in loan-to-value by the Bank of Thailand last month to spur housing demand.
The cut in fees along with relaxed mortgage rules will stimulate the sector and help clear the property backlog, Deputy Finance Minister Paopoom Rojanasakul said in a statement. The revised fees will become effective the day they are published in the Royal Gazette, he added.
Property developers in the greater Bangkok area were saddled with about 235,000 unsold residential units at the end of last year, the most since data dating back to 2018. Sales slumped 37 per cent to about 53,000 units in 2024, according to the Thai Condominium Association.
The glut is set to worsen as buyers are spooked by the 7.7 magnitude earthquake, which killed more than 3,000 people in Myanmar, led to the collapse of an under-construction office tower in Bangkok. Authorities have also reported varying degrees of damage to about 13,000 buildings, leading to mass evacuations and safety checks.
Thailand’s real estate sector was hit hard during the Covid pandemic, and a raft of government incentives and tax breaks to support the sector in the region’s second-biggest economy have failed to revive its fortunes.
The sector’s backward and forward linkages will also help companies in the steel, cement, insurance and household electronics segments among others, Paopoom noted. BLOOMBERG
