Industry executives argue that the government’s housing incentive program is unjust for low-income earners and discriminates against purchasers of second-hand and self-built properties, which have a similar economic multiplier effect as new homes. The Home Builders Association has requested the government to refund the 7% value-added tax for customers purchasing self-built houses from builders.
By doing so, the government could collect more corporate tax from home building firms, since they must declare their tax invoices to the Revenue Department, said association president Vibul Chantradilokrat. Moreover, builders are required to request tax invoices from construction materials and equipment suppliers, creating a multiplier effect involving all parties in home construction.
Under the new government initiative, individuals can deduct up to 10% of the cost of a new home worth up to 5 million baht from their personal taxable income over five years in equal amounts. However, a senior Finance Ministry official noted that many low-wage earners are not subject to income tax, and a person must earn at least 30,000 baht monthly to benefit from the scheme. The 10% ceiling is only eligible for taxpayers with a minimum of 4 million baht in taxable income annually, subject to the highest rate of 37%.