Thai it: the tax relief package

The new Government in Thailand has announced a £792 million tax relief package aimed at boosting the economy and the property sectors in particular...

The Government, in power for just a month, approved a new tax allowance of up to £6,188 for people who buy a new home this year, the extension of a tax allowance of up to £2,062 a year for mortgage interest payments and property tax breaks for companies.

The news was welcomed by developers. Developer Supalai SPAL.BK forecast a rise of at least 20 per cent in 2009 revenue, above analysts' forecasts. President Prateep Tangmatitham said that the company planned to spend £41.2 million on purchasing land this year and would build and sell 10 to 13 residential projects, including condominiums, worth £309 million to £412 million in sales.

The Finance Ministry said in a statement that the tax breaks in the property sector would cost the Government about £753 million in lost revenue.

It has also approved a £2.3 billion supplementary budget to boost spending to help the economy, expected to grow at the lowest rate in a decade this year, with consumer confidence hovering near a seven-year low.

Finance Minister Korn Chatikavanij said the stimulus measures would help boost economic growth to two per cent this year, the lowest since 2001, when the economy grew 2.1 per cent, and down from an estimated four per cent in 2008.

The Bank of Thailand has cut its policy rate aggressively by a combined 175 basis points to two per cent in the past two months to help the economy amid a global slowdown. It has said its monetary policy will remain accommodative.

Central bank Chief Economist Amara Sriphayak is predicting that unemployment could rise to a million this year, or 2.8 per cent of the workforce, if the economy did not grow at all.

Source: www.propertywire.com