People Purchasing Apartments in 2009 Will Get Tax Incentive
Many individual taxpayers can now get relieve from the interest paid on their home loans during 2009 from their taxable income.
From the 2008 tax year gone, the maximum home loan interest payment has been raised to 100,000 baht from 50,000 baht.
The present global financial recession has had a significant influence on Thailand's property market, and apartment purchasing demand has gone down accordingly. The inactive residential market will have an influence on a number of businesses, particularly real estate developers, financial institutions, construction firms, and construction material suppliers.
To fight against this problem, the cabinet passed a motion that offers tax measures planned to encourage the Thai economy. One motion is a personal income tax deduction on home loan principal payments of maximum 300,000 baht. The cabinet motion is not up till now law, however is likely to be declared in the Government Gazette in the coming future.
Current regulations permit only interest payments of maximum100,000 baht yearly to be taken away from personal income tax. Even though existing apartment owners will still be entitled for this home loan interest deduction, the new property tax incentive will be a one-time deduction and is valid only to apartment purchasers who make purchases in the year 2009.
As Thai individual income tax is compulsory at the growth rate of 5-37% on net computable income, with tax exclusion for the initial 150,000 baht of net computable income, the settlement of the new property tax incentive will rely on the taxpayer’s income.
Though, it would become visible on the surface that the new property tax regulation may only offer an incentive to apartment purchasers who have by now made sure to purchase an apartment in 2009. The new property tax incentive may not catch the attention of other apartment purchasers as the deduction of home loan principal payments will only be valid to the year 2009; however the liability to pay for principal payments will last the complete life of the home loan. As a result it may not be sufficient to change the minds of those without plans to purchase an apartment in 2009.
From the 2008 tax year gone, the maximum home loan interest payment has been raised to 100,000 baht from 50,000 baht.
The present global financial recession has had a significant influence on Thailand's property market, and apartment purchasing demand has gone down accordingly. The inactive residential market will have an influence on a number of businesses, particularly real estate developers, financial institutions, construction firms, and construction material suppliers.
To fight against this problem, the cabinet passed a motion that offers tax measures planned to encourage the Thai economy. One motion is a personal income tax deduction on home loan principal payments of maximum 300,000 baht. The cabinet motion is not up till now law, however is likely to be declared in the Government Gazette in the coming future.
Current regulations permit only interest payments of maximum100,000 baht yearly to be taken away from personal income tax. Even though existing apartment owners will still be entitled for this home loan interest deduction, the new property tax incentive will be a one-time deduction and is valid only to apartment purchasers who make purchases in the year 2009.
As Thai individual income tax is compulsory at the growth rate of 5-37% on net computable income, with tax exclusion for the initial 150,000 baht of net computable income, the settlement of the new property tax incentive will rely on the taxpayer’s income.
Though, it would become visible on the surface that the new property tax regulation may only offer an incentive to apartment purchasers who have by now made sure to purchase an apartment in 2009. The new property tax incentive may not catch the attention of other apartment purchasers as the deduction of home loan principal payments will only be valid to the year 2009; however the liability to pay for principal payments will last the complete life of the home loan. As a result it may not be sufficient to change the minds of those without plans to purchase an apartment in 2009.
Labels: personal income tax deduction, property tax incentive, property tax regulation
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