SHORT-TERM measures to help house buyers secure bank loans, which will in turn stimulate the real estate and construction sectors, will be announced in two weeks, Finance Minister Apisak Tantivorawong has revealed.
However, the implementation of the Land and Construction tax is still in limbo and the minister declined to reveal when it will come into effect.
Meanwhile, if the introduction of a nationwide e-payment initiative is fully implemented and businesses are encouraged to have only one financial account, value-added tax (VAT) will not have to be increased from 7 to 10 per cent as recommended by the Re venue Department.
Apisak said the real problem in the real estate sector at the moment is that people who can afford to buy a house cannot secure loan approval because the banks are reluctant to give out loans during an economic slowdown.
"This is truly a matter that should not have been publicised [by the press] as nothing has changed and it has not been finalised. It will cause panic and people will delay their decision [on buying a house] and that is not a good thing," he said at the Finance Ministry yesterday.
"We want this matter to be finalised in two weeks' time because we do not want the uncertainty surrounding the issue to persist any more and we expect the construction and property sectors to benefit from the introduction of the measures," he added.
Apisak said the draft of the Land and Construction tax is still under review by the ministry as the new Council of Economic Ministers has assigned the ministry new "homework" on the focus area to ensure fairness to all parties.
Former finance minister Sommai Phasee and former deputy prime minister MR Pridiyathorn Devakula signed off on the bill before they were replaced by Apisak and Deputy Prime Minister Somkid Jatusripitak last month but the new Council of Economic Ministers has decided to revise the bill before it is submitted to the Cabinet.
"We are still revising it and once we are finished with it we will present it to the public. We want to ensure that the introduction of the tax will provide fairness to all parties and we expect the revision to be done within this year. The new council has given us new homework and we still have to study it," he said.
Meanwhile, the prospect of a hike in VAT, which has already been extended by another year, is now unclear.
The minister said e-payments and the single account measures should be able to compensate for the income to be gained from the VAT increase.
"I personally believe they [the measures] can compensate [for the income that could be gained from the VAT increase] and if they are successfully implemented there is no need to increase the VAT at all since the income gained will be around the same," he said.
Prasert Taedullayasatit, president of the Thai Condominium Association, said it would be better for the market if the Finance Ministry has measures to make it easier for lower-income buyers to get mortgages.
However, the low-income market, defined as residential property priced lower than Bt1.5 million per unit, recorded only 10 per cent, or Bt60 billion, of the property market's overall value of Bt600 billion last year.
"We have to wait and see what the measures will do; however, it would be better for the market if those measures are known immediately because when the government announces measures to boost the market, most homebuyers will delay their decisions to buy," he said.