Thai property groups seek mortgage tax relief and property tax changes

Three property associations, the Housing Business Association, the Thai Real Estate Association and the Thai Condominium Association, have proposed additional government support for the housing market.

They are focusing on two measures: raising the annual mortgage interest tax deduction ceiling from THB100,000 to THB200,000, and aligning land and building tax classifications with actual property use, as consumers face constraints on purchasing power and access to credit.

Soonthorn Sathaporn, president of the Housing Business Association, explained that prioritising two measures did not mean the industry wanted the government to withdraw or stop considering its earlier proposals.

The associations had selected measures suited to current conditions, while existing government support that was beginning to produce results should continue to be studied and implemented.

Soonthorn identified reduced ownership transfer and mortgage registration fees, alongside relaxed loan-to-value (LTV) rules, as measures that businesses believed were helping to support the property market.

The industry wanted their effects monitored and the measures continued, rather than ending existing support and pursuing all the new proposals at once.

Proposal to raise mortgage interest deduction ceiling to THB200,000

Under the first proposal, the three associations want the annual personal income tax deduction ceiling for mortgage interest increased from THB100,000 to THB200,000.

They propose covering purchases and ownership transfers of new homes from Sunday (November 1, 2026) to Friday (December 31, 2027).

The proposal is awaiting consideration by the relevant government agencies.

Soonthorn illustrated the potential benefit with a buyer purchasing a THB7 million home, earning about THB100,000 a month and falling within the 25% tax bracket.

Such a buyer could save about THB50,000 in tax annually if able to claim the full deduction in his example.

Actual savings, however, would depend on each buyer’s tax bracket, interest payments and eligibility conditions.

The second proposal would align land and building tax classifications with actual property use, particularly for properties used as homes but classified under other categories, potentially attracting higher tax rates than appropriate.

The associations proposed considering a rate of 0.03% for residential use, subject to the relevant conditions, instead of the 0.3% rate cited as an example for certain property categories.

Mortgage rejection rate reaches 44.9%: PLUS programme could improve access

Alongside the tax proposals, the industry is seeking to address difficulties accessing credit.

Soonthorn put the mortgage rejection rate in the first half of 2026 at 44.9%, up from about 40% in 2025, indicating that some prospective homebuyers remained unable to meet financial institutions’ lending criteria.

Soonthorn viewed the One Home per Person PLUS home loan programme as another potential way to ease these constraints, particularly through interest rates based on borrowers’ risk profiles.

The association wanted to monitor whether this approach would improve access to loans for people capable of meeting repayments but constrained by lending criteria.

If the programme delivers positive results, the association proposed considering an extension until at least the end of 2027 and increasing its total lending limit from THB50 billion to THB100 billion in the following year, while encouraging greater participation by commercial banks.

Soonthorn explained that annual demand for housing loans normally amounted to several hundred billion baht, so the programme’s lending limit should reflect the market’s size and actual response.

The proposed extension and increase in the total lending limit remain industry recommendations, rather than measures approved by the government.

The association stressed that the programme’s results should be evaluated before any decision to increase the limit.

Pornarit Chounchaisit, president of the Thai Real Estate Association, noted that the industry’s other proposals remained important, although the timing might not be right to pursue them all simultaneously.

Focusing on two measures for now did not mean the other recommendations had been withdrawn or lost their importance.

Material and transport costs rise 7.8–8%, putting pressure on new projects

Pornarit identified limited purchasing power, household debt and strict lending criteria as continuing constraints on the housing market.

Although purchases and ownership transfers had begun recovering following government support, the recovery’s continuity needed monitoring because new sales would affect transfers in subsequent periods.

Construction costs also required attention.

Pornarit estimated that costs for some petrochemical-related construction materials and transport had risen by about 7.8–8% because of oil price pressures, potentially affecting the costs of new developments.

Projects built at earlier cost levels could still be marketed at their existing prices, depending on each company’s cost management.

Government advances home loans and solar support for one million households

Deputy Prime Minister and Finance Minister Ekniti Nitithanprapas told the 50th House and Condo Expo that residential ownership transfers had increased by about 17% in the first half of 2026, while property sector lending had expanded by around 12%.

He attributed part of the market’s recovery to reduced ownership transfer and mortgage registration fees.

The government is also continuing the One Home per Person PLUS programme through the Government Housing Bank (GHB), seeking to improve access for low-income earners and people facing credit constraints.

Ekniti put the interest rate for the first two years at 2.6%, depending on credit risk, and described the public response as positive.

Beyond housing measures, the government is promoting a household solar power programme, with plans to provide THB50,000 towards installation costs for one million households.

It is also working with the Government Savings Bank, the Bank for Agriculture and Agricultural Cooperatives (BAAC) and GHB to support loans for costs exceeding the subsidy, at an interest rate of about 2.5%.

Ekniti explained that the aim was to turn energy consumers into producers, reducing household electricity bills and potentially allowing surplus power to be sold back to the grid under the programme’s rules.

The government also envisages a bank guarantee mechanism, with fees capped at 1% annually, to build confidence in equipment installation and support small businesses in the supply chain.

Property sector shifts towards green living and quality of life

The 50th House and Condo Expo is being held under the theme “The Future of Sustainable Living”.

Kobdet Tangchaiyawong, chairman of the event, described a market shifting from competition over prices, locations and promotions towards the value of the living experience, within the green economy concept.

Green living encompasses building designs that encourage natural ventilation and daylight, rooftop solar installations, smart home systems, electric vehicle charging points and environmentally friendly materials.

These features aim to reduce costs throughout the time residents live in their homes, with green home loans and green finance offering funding options for energy-efficient housing.

Pitipat Preedanont, president of the Thai Condominium Association, highlighted developers’ growing emphasis on technology, innovation and residents’ lifestyles.

This includes exercise spaces, Pilates, yoga, HYROX and health concepts such as longevity, intended to improve quality of life and distinguish their projects.

Thupthep Phackanok, chairman of the event’s public relations committee, said the 50th House and Condo Expo brings together more than 1,000 detached housing, townhouse, condominium and investment property projects from around the country.

Prices range from about THB1 million to the ultra-luxury segment, with organisers targeting THB10 billion in sales.

According to the organisers, participating developers are offering price discounts of about 5–10%, ownership transfer fee waivers and furniture packages to help buyers move straight in.

Prizes include a THB100,000 cash discount and electrical appliances worth more than THB600,000 in total, subject to the organisers’ conditions.