Thai home buyers tax break may end

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Thai home buyers tax break may end 
Bangkok Post: 13 Feb 2010
PROPERTY
Promotions target end of tax incentives
Korn warns that perks must be reviewed

Property developers are preparing strong campaigns to push homebuyers to commit before the current property tax incentives end on March 26.

Developers have responded to comments from Finance Minister Korn Chatikavanij yesterday that incentive measures must be reviewed.

"People wanting to buy a house during this time should not wait until the last day. They should make a decision right away. There is no need to explain what I mean," he told a seminar.

In Mr Korn's view, these measures were introduced during economic crisis so they should be reviewed now that the country has emerged to a recovery stage to maintain discipline and create fairness for other industries that received no tax benefits.

The incentives have reduced the transfer fee to 2% of the appraisal price and cut the mortgage fee from 1% down to 0.01%, while the special business tax is down from 3% to only 0.1%.

Issara Boonyoung, managing director of property developer Kanda Group, said the company would extend its promotions for the House & Condo Fair until the end of March if the incentives were not to be extended.

"If the government does not extend the incentives, we need to revise construction costs and housing prices in the second quarter," he said.

Currently, the company has 200 pre-built houses worth 400 million baht from seven projects ready to be transferred by March 26.

Kanda plans to offer big discounts of up to 1.5 million baht a unit - along with free furniture and home appliances as well as a waiver of transfer fees - to customers committing at the fair, held from Feb 18-21 at Queen Sirikit National Convention Center.

Kessara Thanyalakpark, director of the listed developer Sena Development Plc, said the company would use attractive promotions although it would require an investment in marketing.

"It will be worth spending more on marketing to sell the units and transfer them before the incentives expire," she said. "We can save 4.3% if the units can be sold within that period."

In her view, the government should extend the incentives as they could create a multiplier effect for other sectors. The company has 70 units worth between 200 million and 300 million baht to transfer by March 26.

"If there is no extension, we will rush construction," she added.

Sena this year plans to launch seven projects worth a total of 4 billion baht. It targets 1.7 billion baht in presales and 1.5 billion in revenue this year.

The company will spend 700 million baht to buy new plots of land, including one of 100 rai for developing low-rise units over four years.

"Though other developers are tending to scale down project size, we see an opportunity in this plot as we are familiar with the location," she said.

Buying many plots during an upward trend in interest and inflation will be beneficial in the long run as land always appreciates in price, she added.

SENA shares closed yesterday at 1.88 baht, up one satang, in trade worth 1.2 million baht.

http://www.bangkokpost.com/business/economics/32838/promotions-target-end-of-tax-incentives