Property tax increases 'will not stop demand' in Thailand

Thailand's housing market is unlikely to be affected by the government's decision not to renew its property tax breaks, it has been claimed.

According to a report by Overseas Property Professional (OPP), property developer CB Richard Ellis is confident that the removal of the incentive is not going to affect international sales within the country.

The developer believes that the housing market is now strong enough to stand alone without needing to attract investors.

CB Richard Ellis's executive director for Thailand, James Pitchon, explained to OPP that the incentives did not include projects due to be finished after March 2010.

He continued: "In the Bangkok market, Thai buyers dominate the market and the removal of incentives will have little affect on foreign demand because it is already limited.

"In the resort markets, many projects are sold on a leasehold basis and leasehold sales did not benefit from tax incentives so again we see little impact on foreign demand from the removal of incentives."

Some developers within the country have claimed that the tax rises could result in a reduction in profits.

The International Valuation Standards Council recently introduced new guidelines aimed at making Thailand's property market more transparent.