For foreign buyers considering Phuket property, the latest Thai cabinet decision creates a clear price divide. While Thai nationals can now benefit from property transfer fees slashed to 0.01% through mid-2027, foreigners pay the full standard rates: 2% for transfer fees and 1% for mortgage registration.
The cabinet approved a one-year extension of the fee reduction measure, which was due to expire this week. The extension takes effect upon publication in the Royal Gazette and runs until June 30, 2027.
The policy applies only to transactions by Thai nationals purchasing residential property valued up to 7 million baht, covering detached houses, semi-detached houses, townhouses, commercial buildings with land, or condominium units registered under the Condominium Act. Mortgage amounts are also capped at 7 million baht per contract.
What the fee difference means in practice
Under normal fee structures, transfer fees are 2% of the appraised value, while mortgage registration fees are 1% of either the appraised value or actual purchase price, whichever is higher.
The reduction to 0.01% represents substantial savings for eligible Thai buyers. For a property valued at 5 million baht, the difference between 0.01% and 2% on transfer fees alone is approximately 99,500 baht.
Foreign buyers pay the standard rates regardless of property value or location. The measure explicitly excludes foreigners, meaning international buyers in Phuket, Bangkok, Hua Hin or anywhere else in Thailand face the full fee structure.
The policy also excludes transactions involving partial ownership interests, regardless of buyer nationality.
The wider market context
According to government spokeswoman Rachada Dhnadirek, the extension aims to encourage purchases of both new and existing residential properties while reducing financial burden on Thais seeking home ownership.
The Finance Ministry estimates the measure will support annual real estate transactions valued at 540 billion baht, generating approximately 305 billion baht in additional investment each year compared with normal fee levels. The ministry said the measure is expected to help sustain market confidence and support recovery of the real estate sector, which has slowed due to economic conditions and the impact of war in the Middle East.
The fee cuts reduce revenue for local administrative organisations. The cabinet instructed the Budget Bureau and relevant agencies to consider allocating budgetary funds to compensate for the shortfall, ensuring local organisations have sufficient funding to carry out their responsibilities.
Industry questions about effectiveness
Kessara Thanyalakpark, managing director of SET-listed Sena Development, questioned whether the fee reductions represent the most efficient use of public spending. She said the measure is estimated to cost the government around 9 billion baht annually, but may not deliver the best value for stimulating the housing market.
Ms Kessara urged authorities to adopt more targeted policies, suggesting support should focus on first-time homebuyers and young families rather than applying broad-based incentives. She argued that targeted assistance would better address affordability challenges while encouraging genuine housing demand.
She cited the Netherlands as an example, where the government guarantees up to 10% of mortgages for first-time buyers, helping younger households overcome financing constraints without distorting the wider market. Germany’s Bauspar programme offers another model, allowing prospective buyers to save over a three-year period before becoming eligible for preferential mortgage rates and more favourable loan-to-value conditions.
Ms Kessara said such programmes not only improve access to homeownership but also support broader demographic objectives by encouraging younger people to establish families and settle down earlier. She added that Thai banks should consider adopting risk-based mortgage pricing, under which interest rates better reflect each borrower’s individual credit profile.
What Phuket buyers should understand
For foreign buyers in Phuket’s property market, the policy creates a structural cost difference between transactions by Thai nationals and international buyers. The difference is most significant for properties under 7 million baht, where eligible Thai buyers benefit from near-zero transfer and mortgage fees while foreign buyers pay standard rates.
The 7 million baht threshold covers a substantial portion of Phuket’s condo market and some villa segments, particularly in areas such as Kathu, parts of Rawai, or inland Chalong, where prices often fall within or near the cap. Higher-value coastal villas and luxury developments typically exceed the threshold, meaning even eligible Thai buyers pay standard fees on those transactions.
The policy does not affect foreign ownership quota rules for condominiums, which remain unchanged. Foreign buyers can still purchase condo units within the 49% foreign quota, but pay full transfer and mortgage registration fees regardless of unit value.
For buyers comparing all-in purchase costs between Phuket and other resort markets, the fee structure is one variable among many, including property price, rental yield potential, ownership structure, visa access, tax treatment and exit liquidity.
Frequently Asked Questions
Do foreign buyers in Phuket benefit from the fee reduction?
No. The policy explicitly excludes foreigners. Foreign buyers pay the standard transfer fee of 2% of the appraised value and mortgage registration fee of 1% of the higher of appraised value or purchase price, regardless of property value or location in Thailand.
What types of property qualify for the reduced fees?
The measure applies to residential properties including detached houses, semi-detached houses, townhouses, commercial buildings with land, or condominium units registered under the Condominium Act. Both the purchase price and official appraised value must not exceed 7 million baht, and mortgage amounts must not exceed 7 million baht per contract. Only Thai nationals are eligible.
How long will the reduced fees remain in effect?
The extension runs until June 30, 2027. The measure takes effect immediately upon publication in the Royal Gazette. The fee reduction was originally due to expire this week but has been extended for one additional year.
Could this policy affect Phuket property prices?
The Finance Ministry estimates the measure will support 540 billion baht in annual real estate transactions nationwide and generate approximately 305 billion baht in additional investment each year. Whether this translates to price effects in Phuket specifically is unclear, as the policy excludes foreign buyers who form a significant portion of demand in Phuket’s resort property market.
What remains uncertain about the policy?
The cabinet instructed the Budget Bureau to consider compensating local administrative organisations for lost revenue, but specific funding arrangements have not been detailed. Industry observers such as Sena Development have also questioned whether broad-based fee reductions represent the most effective stimulus compared with targeted programmes for first-time buyers.
Sources
- Bangkok Post — Property stimulus extended a year — link
