The Home Builders Association participated in a workshop at the invitation of Prime Minister Prayut Chan-o-cha and proposed three key issues for government support to assist those wanting to build their own homes, addressing Real Demand through measures such as a 2% personal income tax reduction on home construction costs, capped at 100,000 baht over five years, and land tax exemptions for plots not exceeding 200 square wah per person. They also called for the registration of home builders to be formalized and for the government to promote and develop vocational education personnel, while reducing business obstacles by reforming the relevant agencies involved in the construction permit process to enhance efficiency.

On September 3, 2020, Prime Minister Prayut Chan-o-cha and Minister of Defense held a workshop with various business sectors under the "Unity for National Development" initiative, which allows participation from all sectors and levels of society, including the Home Builders Association (HBA). This group is part of the real estate service sector invited to brainstorm ideas and strategies to drive the business sector into the future. Attendees included Mr. Worawut Kanjanakul, President of the Home Builders Association, Ms. Patchara Tanyanyong, Honorary Committee Member, and Mr. Olar Chanphu, Secretary-General of the Association, along with representatives from the Thai Real Estate Association and over 25 other real estate operators.

Mr. Worawut Kanjanakul, President of the Home Builders Association stated that during the meeting, the association presented various issues to the Prime Minister to address both short-term and long-term challenges. He noted that the self-built home market has significant growth potential, as evidenced by data from the Real Estate Information Center showing that in 2019, there were 100,657 self-built single-family homes nationwide (homes outside of housing projects), with a total value of 208.675 billion baht. Of these, 18,029 were newly registered single-family homes in Bangkok and its vicinity, representing a 3% increase from 2018.

Additionally, there are at least 120 million square meters of vacant land, with over 50% located in 10 key districts suitable for self-building. At the same time, there are approximately 300,000 homes over 30 years old that are ready for demolition and reconstruction. Consumers who build their own homes are typically those who save and accumulate funds for their own housing, representing Real Demand, as they seek to build homes for actual living rather than for speculation. This consumer group typically seeks bank loans for only 50% of the construction costs. Therefore, the Home Builders Association seeks government support on the following key issues:

Issue 1: Measures to Stimulate the Real Estate Business for Those Seeking to Build Their Own Homes

In the past, the government has implemented measures to stimulate the real estate sector, but the self-built home segment has never been included in the support framework. Therefore, the association requests government support through a 2% personal income tax reduction on home construction costs, capped at 100,000 baht over five years, which can be averaged across tax accounting periods. Additionally, they propose land tax exemptions for individuals with vacant land intended for home construction (first-time homebuyers or those who have never owned a home) not exceeding 200 square wah per person. If these measures receive government support, it will enable individuals to have their own housing without needing to sell their land to alleviate tax burdens, making it easier for those looking to purchase land for residential construction. The government would also incur minimal losses in tax revenue while demonstrating empathy for citizens needing assistance to achieve homeownership.

Issue 2: Registration of Home Builders to Formalize the Sector

This aims to elevate standards and reduce issues related to unfinished construction, which is a significant problem. Furthermore, the government could collect taxes amounting to no less than 20 billion baht annually from formalizing this sector.

Issue 3: Promotion and Development of Vocational Education Personnel Currently, the home building sector lacks skilled personnel in vocational fields, necessitating government support to promote the value of vocational education among young people and their parents, and to develop vocational qualifications into more tangible outcomes.

However, existing government regulations remain obstacles that need to be addressed, particularly regarding the delays and inconveniences in obtaining construction permits in various areas. Therefore, there is a need for the relevant agencies involved in the construction permit process to undergo reforms to enhance their efficiency.

Information: Home Builders Association