'Not a boon' for bankers
Commercial banks do not expect to get much more business from the new first-home scheme because qualified buyers who need a loan are not lower income people.
The scheme is only helping to speed up the transfer of units and loans that were suspended over the past two months until the government's policy became clearer. The tax incentive is still better than the zero interest mortgage because commercial banks can cash in on the tax break, while only the Government Housing Bank was involved in the mortgage offer.
Tinnakorn Boonyakalin, senior vice president and manager of consumer loans at Krung Thai Bank, said the uncertainty for first-time home-buyers has gone.
The bank will rush the extension of loans to customers who had been waiting for the past two months to ask for one.
The bank will aggressively target first jobbers who want to have their own home.
However, the programme might not expand the loan market, he added.
Chatchai Payuhanaveechai, first senior vice president of Kasikornbank, said the tax incentive helps level the playing field in the industry after banks were hit by the previous government's zero-interest mortgage scheme for first-time home-buyers.
Developers should gain more than banks from the tax deduction because developers can transfer their units to customers. However, the scheme might make buyers misunderstand the conditions of the tax refund.
For example, qualified buyers with a monthly salary of Bt20,000-Bt40,000 will receive a tax deduction of up to 10 per cent of the home price, but they can only buy a home costing no more than Bt2 million, he said. Buyers with a minimum salary of Bt100,000 will gain the most, as they can buy a home priced up to Bt5 million.
However, those earning Bt100,000 or above are people who already own a residence.
There were 2 million households purchasing their first home with combined loans of Bt2 trillion, he added.
A Bangkok Bank executive said banks could only encourage buyers to accelerate the transfer of units. This would help mortgages that were delayed by buyers waiting for the zero interest rate.
New loans might not be driven by the tax deduction. It just helps make the quiet residential market become lively again, the executive said.
First jobbers with a monthly salary of Bt15,000-Bt20,000 might be left out of the programme because their income was too low to get much of a tax deduction.
