Tax break for builders of cheap homes

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The Finance Ministry is poised to allow property developers to deduct expenses incurred from building homes for the poor from their taxable profits under a soon-to-be-launched scheme.

The move is part of government efforts to improve living standards for the poor.

Construction costs for homes valued at no more than 500,000 baht would be eligible for the deduction, Deputy Prime Minister Somkid Jatusripitak said, adding that the details of the scheme would be completed within a month.

The government wants to encourage private property developers to use funds from their corporate social responsibility programmes to build houses for the poor.

Moreover, developers could help the National Housing Authority to achieve its target to build 2.5 million homes for the poor over the next five years, as the state agency has limited capacity to do so, Mr Somkid said.

He said the Finance Ministry would take responsibility for seeking land banks for housing development, while developers would absorb the construction costs.

Atip Bijanonda, director of the Board of Trade’s construction and property business group association, said household earned income of 15,000 baht a month was enough to afford a 30-year leasehold for a home priced at 500,000 baht.

To push the project ahead, the government must ease environmental impact assessment conditions such as the number of parking spaces and requiring slimmer water storage tanks, as such items are unnecessary for low-priced homes, he said.

The government must charge a lower rental fee for land plots to be used for construction, Mr Atip said.

In the meantime, Prasert Taedullayasatit, managing director of Pruksa Real Estate and president of the Thai Condominium Association, said the government’s property stimulus measures were expected to boost property sales growth to 13% this year, beating an earlier forecast of 5%.

He also raised the sales growth forecast for next year to 5-10% from zero to 5% earlier.

The stimulus should encourage property developers to speed up their construction projects to meet rising demand, Mr Prasert said.

 

Source: http://property.bangkokpost.com/news/732916/tax-break-for-builders-of-cheap-homes