Thai housing groups seek tax relief as loan rejections may hit 50%
Proposals include a 200,000-baht homebuyer tax deduction cap and lower taxes on unsold homes ahead of the October 29–November 1 property show.
- Three Thai property associations are seeking tax relief from the government due to concerns that mortgage loan rejection rates could reach 50% in 2026.
- The proposed relief for homebuyers includes doubling the personal income tax deduction on housing purchases from 100,000 to 200,000 baht.
- To lower costs for developers, the groups are also requesting a reduction in the tax rate on unsold, completed residential units from the 0.3% commercial rate to the 0.03% residential rate.
- The high loan rejection rate, which stood at 44% in the first half of 2026, is attributed to fragile purchasing power, high debt, and strict bank lending criteria.
Three Thai property associations are preparing to seek additional tax relief from Deputy Prime Minister and Finance Minister Ekniti Nitithanprapas, as the housing industry warns that mortgage rejection rates could reach 50% in 2026.
Sunthorn Sathaporn, president of the Housing Business Association, said his association was working with the Thai Real Estate Association and the Thai Condominium Association on proposals to strengthen homebuyer incentives and reduce developers’ costs.
The groups plan to discuss the measures with Ekniti, who is scheduled to preside over the opening ceremony and deliver a keynote address at the 50th House and Condo Show, running from October 29 to November 1, 2026.
Tax proposals target homebuyers and unsold homes
One proposal would double the ceiling on a housing-related personal income tax deduction for homebuyers from 100,000 to 200,000 baht. The associations hope the additional relief would encourage purchases as weak economic conditions continue to weigh on consumer confidence and spending power.
They also want land and building tax assessments to better reflect how properties are used, particularly newly completed residential units that are ready for transfer but remain unsold.
Sunthorn said developers currently face a 0.3% commercial tax rate on these units. The associations are seeking the application of a 0.03% residential rate instead, with the aim of lowering the cost of holding unsold inventory.
The proposals seek to address both sides of the market: easing costs for developers while giving prospective homebuyers stronger incentives to purchase.
Both measures remain industry proposals for discussion with the government.
Mortgage rejection rate could reach 50%
Sunthorn said purchasing power remained fragile, with mortgage rejection rates at 44% in the first half of 2026. He expects the rate could reach 50% for the full year.
The figures highlight the difficulty of turning buyer interest and property bookings into completed ownership transfers when applicants cannot secure financing.
Uncertain incomes, high debt burdens and banks’ lending criteria continue to constrain buyers, limiting the impact of promotional campaigns and government support.
The Real Estate Information Center (REIC) forecasts that residential ownership transfers nationwide will contract by 4–5% in 2026, pointing to continued pressure on the market.
For the associations, the challenge extends beyond attracting buyers or clearing unsold stock. Prospective purchasers must also be able to qualify for mortgages before their demand can translate into completed transactions.
Existing support does not guarantee mortgage approval
Existing housing support measures include reductions in ownership-transfer and mortgage registration fees to 0.01% for eligible transactions, alongside the easing of loan-to-value (LTV) limits through June 30, 2027.
Government Housing Bank (GH Bank) is also offering its Khon La Lang Plus home loan scheme, backed by a total credit line of 50 billion baht.
The programme offers loans of up to 3 million baht per applicant and repayment terms of up to 40 years. Initial interest rates are 2.6–2.8% a year for the first two years, depending on the borrower’s eligibility category, rather than rates fixed for the entire loan term.
GH Bank plans to promote the scheme at the 50th House and Condo Show.
However, the programme does not guarantee approval. Applicants remain subject to checks on their credit histories and ability to service their debts.
The associations see additional tax incentives and lower inventory costs as a complement to existing measures. The sector’s immediate challenge remains converting purchase incentives into completed sales while buyers continue to face substantial barriers to credit.
