Property developers are urging the government and its new economic cabinet to use tax incentives to help restore housing demand in the remaining months of this year.
They are concerned that already-soft demand will be weakened further by Monday night’s bomb attack.
Cutting property tax and transaction fees would help to stimulate the economy in general and the property market in particular, said Thongma Vijitpongpun, president and chief executive of Pruksa Real Estate Plc.
He proposes the property transfer fee be reduced to 0.02% from 2%, mortgage fee to 0.01% from 1% and special business tax to 0.01% from 3.3%.
The cuts should be applied to housing units priced 2 million baht or lower, which would help low-income earners to afford their own home, Mr Thongma said.
“If these incentives were applied to higher-priced segments, annual tax revenue could miss the target,” he said.
Atip Bijanonda, president of the Housing Business Association (HBA), said the overall economy in the remaining months and full-year GDP growth would depend largely on economic stimulus.
“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 has revised down this year’s housing market forecast to only zero to 5% growth from 5-10%.
Mr Atip suggests developers stay more focused on cash flow and be more cautious of new projects being launched between now and year-end.
Theerathat Singnarongthon, assistant chief executive of Property Perfect Plc, said the company recently scaled down the number of new launches this year to 15 projects worth a combined 20 billion baht from 22 projects worth 26 billion.
“Trying to generate sales amid weak market sentiment is exhausting, particularly after the bombing,” he said.
“We need to be more selective in new launches and make sure of demand.”