Thai Govt extends homebuyer incentive

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Thai Govt extends homebuyer incentive 
Bangkok Post: 24 Mar 2010
Govt extends incentives for homebuyers
Decision spurred by complaints, says PM

The cabinet has extended tax breaks for homebuyers for another two months to shore up the real estate market.The incentives, part of a one-year measure to stimulate the property sector, were due to expire on Sunday.

Abhisit: Easing people’s difficulties

The cabinet yesterday approved a new expiry date of May 31.

Prime Minister Abhisit Vejjajiva said the decision to extend the incentives was made because of complaints from homebuyers who said they were having problems completing transactions with financial institutions and the Land Department.

"To help ease people's difficulties, the cabinet sees the need to extend this measure," he said yesterday after the cabinet meeting at the Public Health Ministry.

But the extended measures will only benefit homebuyers.

Land transfer and registration fees will remain at 0.01% until the end of May when they will rise to 2%. But property developers will still see business tax return to 3% from 0.1% after Sunday.

Finance Minister Korn Chatikavanij said the extension was necessary to help clear a backlog in the system.

Some 32,000 homebuyers are presently arranging financing for property purchases. Another 10,000 were in the pipeline to transfer their titles at the Land Department, he said.

Issara Boonyoung, president of the Housing Business Association, said the extension would benefit the entire economy as the measures cover new housing units, resales and land plots.

About 220,000 land transfers took place in Greater Bangkok last year. Residential property accounted for 72% of transfers or 160,000 transactions.

Mr Issara said the extension would allow buyers who have decided to purchase property to complete the transfer before the measures expire.

It takes at least one month to complete the purchase process, including the approval of loan applications and the transfer of title deeds, he said.

But the extension will not see new supply enter the market as the period is too short for developers to deliver new projects, he said.

Kittipol Pramoj Na Ayudhya, president of the Thai Real Estate Association, said the additional two months of tax breaks would help the industry as developers had high levels of unsold completed units.

"It will be a soft landing for the property sector which had been expected to cool once the incentives expired [on Sunday] as the government had [originally] announced," Mr Kittipol said.

Pawinee Tantisuk, a 26-year-old office worker who plans to buy a house on Rarm Intra Road, welcomed the government's decision.

"I am satisfied by the extension because I do not have to rush to transfer the money to the developer who has not yet finished building my house," she said.

Deputy government spokesman Phumin Leetheeraprasert said the cabinet would instruct the department to work on the weekend of May 29-30 to support homebuyers.

http://www.bangkokpost.com/news/local/34906/govt-extends-incentives-for-homebuyers