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Thailand Withdraws Property Tax Breaks

Monday, March 1, 2010

Thailandís government, while maintaining other measures introduced to assist poorer people, has decided to cancel the tax incentives given to the property sector when they run out on March 28, 2010.

The property tax breaks included a reduction in property rights transfer and mortgage registration fees, as well as in special business tax. The government now believes that, as those incentives helped property sales rise last year and the sector seems to have returned to normal profitability, such assistance is no longer required.

Therefore, when the property tax incentives end, the special business tax will return to its previous 3.3% from the reduced 0.1%, the transfer fee to 2% from 0.01% and the mortgage registration fee to 1% from 0.01%.

On the other hand, while its subsidies on water consumption will also be cancelled, the government has decided to maintain its other cost-of-living relief measures, such as free public transport for low-income individuals and free electricity for low-volume users, for another three months, and will review them further at the end of June.

It was reported that the measures being renewed will cost the government around THB4.5bn (USD136.5m) in the present 2009/2010 fiscal year.