Tax Deduction for First-Time Home Buyers and Temporary Allowances for State Officials and Employees

(22/09/2011)

The Government’s scheme for first-time home buyers will enable low-income earners to have their own houses, in response to the Government’s urgent policy of raising the people’s standard of living. According to the Revenue Department, although the Government may lose 1.7 million baht in revenue collection, the scheme will spur the growth of the property sector. About 90,000 existing housing units are likely to benefit from the scheme. The Cabinet, during its meeting on September 20, approved tax incentives for first-time home buyers, who are eligible for a tax deduction of up to 10 percent of property prices, but not exceeding 500,000 baht. The value of the house must not be more than five million baht, and the deduction will be applied in the same amount each year for a period of five consecutive years. However, the ownership transfer must be carried out between 21 September 2011 and 31 December 2012. Under the scheme, the home buyers must not own any property for their residence before, and they must hold the ownership of the property for at least five years, starting from the day of ownership registration. At the same meeting, the Cabinet approved regulations of the Ministry of Finance calling for an increase of temporary allowances for government officials and employees, following a proposal submitted by Deputy Prime Minister and Commerce Minister Kittirat Na-Ranong. According to the proposal, government officials and permanent and temporary government employees holding at least bachelor’s degree, with a monthly salary of less than 15,000 baht, will receive a temporary allowance. Their salary plus the allowance must not exceed 15,000 baht a month. The temporary allowance program will take effect on 1 January 2012. As for government officials and permanent and temporary government employees with less than a bachelor’s degree and a monthly salary of less than 9,000 baht, they will also receive a temporary allowance. But their salary plus the allowance must not exceed 9,000 baht a month. More than 640,000 state officials and employees are eligible for the cost of living increase. The Cabinet also approved allowances for military personnel. The Civil Service Commission has been assigned to adjust the whole salary structure for government officials soon, in order to raise their standard of living.