The government finally approved a series of economic measures with hopes of lifting Thailand’s sluggish property sector. The cuts in fees and taxes is designed to help low-income citizens who have struggled to secure mortgages.

The incentives will start on 19th October and run until April. They include reductions in the housing transfer fee to 0.01 percent from two percent, and bringing down mortgage fees to 0.01 percent from one percent. Another incentive will kick in at the start of 2016. Buyers of homes costing less than THB3 million will be able to take a tax deduction of 20 percent of the total price.

According to deputy Prime Minister Somkid Jatusripitak and finance minister Apisak Tantivorawong, the measures were taken in an attempt to help low-income earners buy houses which they have been prevented from doing.

Finance minister Apisak pointed out that mortgage approvals have been the primary reason the property sector has slowed down. Rejection rates by financial institutions have reached critical levels and low-income borrowers were unable to obtain home loans in recent times.

The rejection rates for home loans from commercial banks have jumped to 60 percent, a large increase from the 20 percent seen during normal times in Thailand. The ministry targeted low-income buyers with these new measures as they did not want home buyers to use the stimulus measures for speculative purposes.

The specific business tax, a levy on developers when they sell a property and on owners who resell their property within five years of it being transferred, is now charged at 3.3 percent of appraisal price, The Post noted. This tax is put in place to curb speculation.

Despite the struggles of buyers, developers have actually seen demand in Bangkok stay strong, especially in prime, CBD locations. Both high-income individuals in Thailand and overseas buyers have been investing in property to keep the market afloat.