The Finance Ministry may consider a proposal by property developer associations on approving stimulus relief for outstanding mortgage loans totalling 600 billion baht as a means to improve sentiment regarding property stock, especially in the condo segment, says Asia Plus Securities (ASP).
On Dec 9, property developers submitted a letter to the ministry proposing five stimulus measures for property development.
First is the reduction of ownership transfer fees and mortgage fees to the lowest rates on purchases of both new and second-hand homes until Dec 31, 2021.
Second is the temporary cancellation of LTV (loan-to-value) measures.
Third is the extension of the land and buildings tax reduction by 90% for two more years, effective from Jan 1, 2021 to Dec 31, 2022.
Fourth is the extension of visa duration for foreign buyers as a proportion of the value of apartments or condos, such as granting a five-year visa to buyers of units priced 3-5 million baht, 10 years for units that cost 5-10 million baht and permanent residency for units that cost more than 10 million baht.
Fifth is the revival of the “Baan Dee Mee Down” project and the increase of the cash-back limit for buyers from 50,000 baht per person to 100,000 baht per person for a year, effective from Jan 1, 2021 to Dec 31, 2021.
The developers association met in September with the prime minister and related agencies to discuss implementing measures similar to the LTV measures and reductions in transfer and mortgage fees, but nothing came of it.
Considering the proposals, ASP expects there is a high probability some measures may be approved this time, such as an extension of the land and buildings tax cut and the reduction of the transfer and mortgage fees that have been in effect since Nov 2, 2019 and will expire on Dec 24, 2020.