FIRST-TIME HOME-BUYERS. Tax deductions for up to half a million baht

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FIRST-TIME HOME-BUYERS

Tax deductions for up to half a million baht
By WICHIT CHAITRONG
The Nation 2011-09-20

First-time home buyers are to get a tax deduction of up to Bt500,000.

Tax incentives for first-time home buyers will be submitted for the Cabinet's approval today, Finance Minister Thirachai Phuvanatnaranubala said yesterday.

He said the tax package would be expanded to cover homes priced up to Bt5 million, instead of Bt3 million as previously planned, because the government wanted to provide tax incentives for those seeking homes located in central urban areas.

Revenue Department chief Satit Rungkasiri said the department was revising the tax incentives, as the earlier plan was to provide deductions for those who bought homes priced at not more than Bt3 million.

"Under the new proposal, home-buyers could get tax deductions of up to 10 per cent of home prices," he said.

In the case of a home costing Bt5 million, buyers could get up to Bt500,000 deducted from their annual income tax payments. The deduction will be applied over five years, at a rate of 20 per cent each year.

"The tax incentive will cover only those people who buy a home within one year, starting from the date of the Cabinet's approval," Satit said.

First-time home-buyers will then begin to get their tax deductions in 2013.

The scheme is expected to cost the government about Bt2 billion in lost revenue, he said. The scheme covers both new homes and those being resold.

The first-time home-buyers will also get a tax deduction of Bt100,000 annually for interest-rate payments on mortgages.

The incentives for first-time home-buyers were one of the Pheu Thai Party's promises during the recent election campaign. Last week, the Cabinet approved excise-tax rebates for first-time car buyers.

Deputy Finance Minister Viroon Tejapaibul said he was also talking with the Government Housing Bank (GHB) about interest-free conditions for mortgages for home-buyers. The price of homes qualifying for these mortgages will be capped at Bt3 million, and both new and resale homes will be eligible, he said.

Buyers could enjoy interest-free conditions for up to the first five years of mortgage repayments if they buy resale homes from the GHB's list of non-performing assets.

Total mortgages under the scheme will amount to about Bt10 billion.

Viroon said the interest-free mortgage package would be announced later and could be implemented without the Cabinet's approval.

Under the zero-per-cent interest-rate mortgage scheme for first-home buyers implemented by the Abhisit Vejjajiva government, 18,500 borrowers have applied for loans amounting to Bt25 billion. The GHB has already approved loans worth about Bt15 billion, and the rest are in the process of approval.

Home-buyers can still apply for these loans, as the bank has another Bt1.8 billion on offer, according to GHB staff.

In a related development, Viroon said the Finance Ministry would today submit for the Cabinet's approval the promised income hike for civil servants who are graduates. They will get a monthly minimum income of Bt15,000.