Housing loan stimulus reinvigorates property market borrowing.
Photo: Nai Harn Beach Condominium CEO Igor Protasov (2nd from left) met with Anan Atsawapokin – the Executive Board Chairman at Land & Houses Co Ltd.
Nai Harn Beach Condominium CEO Igor Protasov recently attended a seminar highlighting the direction of the Phuket real estate market at the Phuket Royal City Hotel. We asked Mr.Protasov to tell us about the event.
Please, tell us what the event was about?
The seminar, titled “Moving economy, pushing real estate. Phuket focusing today and catching up with the future” was organized by the Phuket Real Estate Association (PREA) and presided over by Governor Chamroen Tipayapongtada.
The seminar proved to be a success with many members of the association and real estate and condominium business operators in attendance.
Photo: At the seminar. Mr Protasov. who heads the B200 million project at Nai Harn Beach Condominium met with Anan Atsawapokin, the Executive Board Chairman of Land & Houses Co Ltd. to discuss the future of the real-estate market on the island.
What did you gain from this event?
I received much advice and many new ideas after we exchanged ideas, and the Nai Harn Beach Condo project had received so much attention.
We also discussed the tax cuts that the government has introduced as a stimulus package to the property market.
The government has made BIO billion in cheap loans available through all branches of state-owned Government Housing Bank (Bank), with some 2,000 potential borrowers applying for a combined B2.5 billion in housing loans on the first day of the scheme.
Could you explain how the scheme works?
The move was to make housing loans available for low-income candidates who have been rejected by commercial banks by having them apply to the GHB from October 10 to December 31. 2015.
Buyers of homes valued at B3 million or less also now have better access to mortgages. The government cut in transfer and mortgage fees for houses to 0.01% of the appraisal value for six months for homes.
The move also allows first-time homebuyers paving for a residence priced at B3 million or less by the end of next year to deduct 20% of the home’s value from taxable income over a five-year period.
It means that a majority of potential buyers have a chance to buy their first property in Thailand now.
The state-owned housing bank is allowed to offer loans of up to B3 million to those with monthly incomes of B30.000. Normally, only those earning B54.000 a month are eligible for the B3-million housing loans. Those earning BI0.000 a month can borrow up to В1 million under the scheme. They must pay B5.000 a month in the first year, 5,700 in the second and 7,000 from the third onwards.
GH Bank also charges borrowers 3.5% for the first year. 4.25% for the second year and the minimum retail rate minus 0.7 percentage points throughout the term of the loan for general borrowers and MRR minus one percentage point for employees of companies that have been offered special conditions by GH Bank. Its MRR currently stands at 6.75%.
The government has also agreed to permanently reduce corporate income tax to 20% and the old agreement will be terminated at the end of December 2015.
And projects with 10% – instead of 20% – venture capital are exempt from dividend tax in the hope of assisting SMEs (small- to medium-sized enterprises) to gain access to investors to improve performance and create a stronger market for real estate.
With current support by the Government and coming launch of the Asean Economic Community in December 2015, Phuket property market can expect growth in both prices and demand, specifically in the segment of ready to move in condominiums.