First-time home buyers in Thailand are benefiting from a new tax scheme recently approved by the Thai Cabinet. This scheme will enable low-income earners to have their
own houses, in response to the Thai Government’s urgent policy of increasing the peoples’ standard of living.

The incentives are summarized as follows:

1. To qualify as first-time buyers, the home buyers must not have previously owned
any residential property or have been recorded as the householder in the House
Registration, unless there is evidence to prove that they were not the owners.

2. The value of residential properties must not be more than Baht 5,000,000.

3. As amended by the Cabinet on 27 September 2011, the proposed tax
exemption of 10% of the cost of a new residential unit costing no more than
Baht 5,000,000 (i.e. up to Baht 500,000) will be treated as a tax exemption and thus deductible from tax payable when calculating personal income tax.

4. The ownership transfer of the property must be registered between 21 September 2011
and 31 December 2012 and the owner must hold the ownership for at least 5 years.

5. Eligible first-time buyers cannot have previously benefited from any of the following
tax schemes:

  • Tax allowance for interest paid in respect of the purchase, hire-purchase or
    construction of a residential building.
  • Tax exemption on the amount paid to buy a new residential building or condominium in accordance with the Ministerial Regulation No. 271 B.E. 2552 (2009); or
  • Tax exemption on the income derived from the sale of residential property to buy a new residential property in accordance with the Ministerial Regulation No. 241
    B.E. 2546 (2003)

6. In case of co-borrowing, a co-borrower who owns a residential property stated in
no. 1 or has benefited from the tax schemes as discussed in no. 5 is not
eligible for a tax exemption.

This tax scheme however is subject to conditions that will be announced by the Director-General of the Revenue Department of Thailand.

The purpose of this summary is to provide awareness to those eligible first time
home buyers. Please contact MSNA, Thailand Accountant, for an expert advice regarding your tax planning.