Property stimulus extended a year

Transfer fees 0.01% until mid-2027

The cabinet has approved a one-year extension of the measure reducing transfer and mortgage registration fees for real estate transactions to 0.01%, which policymakers claim can spur Thai GDP growth.

Under the normal fee structure, the transfer fee is 2% of the appraised value, while the mortgage registration fee is 1% of either the appraised value or the actual purchase price, whichever is higher. The fee reduction has been in effect since 2025 as part of efforts to stimulate the real estate sector, and was due to expire on Tuesday.

The extension takes effect immediately upon publication of the Interior Ministry's notification in the Royal Gazette, remaining in force until June 30, 2027.

According to government spokeswoman Rachada Dhnadirek, the extension is intended to encourage purchases of both newly built and existing residential properties, while reducing the financial burden on Thais seeking home ownership.

The slashed fees apply to purchases of real estate by Thais, including residential properties covering detached houses, semi-detached houses, townhouses, commercial buildings, or land together with such buildings, or condo units registered under the Condominium Act, provided that both the purchase price and the official appraised value do not exceed 7 million baht, and the mortgage amount does not exceed 7 million baht per contract.

The measure does not apply to transactions involving the sale of partial ownership interests, and foreigners have to pay all the normal fee rates.

The Finance Ministry estimates the measure will support annual real estate transactions valued at 540 billion baht, generating about 305 billion baht in additional investment each year compared with normal fee levels.

The measure is expected to help sustain market confidence and support the recovery of the real estate sector, which has slowed due to economic conditions and the impact of war in the Middle East, said the ministry.

As the fee cuts reduce revenue for local administrative organisations, the cabinet instructed the Budget Bureau and relevant government agencies to consider allocating budgetary funds as appropriate to compensate the organisations for the revenue shortfall, ensuring they have sufficient funding to carry out their functions and responsibilities.

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Kessara Thanyalakpark, managing director of SET-listed Sena Development, questioned the effectiveness of the fee reductions, saying the stimulus may not deliver the best value for public spending.

"The measure is estimated to cost the government around 9 billion baht a year, but it may not be the most efficient way to stimulate the housing market," she said, urging authorities to adopt more targeted policies instead.

Ms Kessara suggested directing support towards first-time homebuyers and young families rather than applying broad-based incentives, arguing that targeted assistance would better address affordability challenges while encouraging genuine housing demand.

She cited the Netherlands as an example, where the government guarantees up to 10% of mortgages for first-time buyers, helping younger households overcome financing constraints without distorting the wider market.

Germany's "Bauspar" programme offers another model, allowing prospective buyers to save over a three-year period before becoming eligible for preferential mortgage rates and more favourable loan-to-value conditions.

Ms Kessara said such programmes not only improve access to homeownership, but also support broader demographic objectives by encouraging younger people to establish families and settle down earlier.

Thai banks should consider adopting risk-based mortgage pricing, under which interest rates better reflect each borrower's individual credit profile, creating a fairer lending system while expanding access to qualified homebuyers, she said.