The cabinet yesterday approved a private-sector request to extend the reduction of transfer and mortgage fees to sales of self-built second-hand housing units under its policy to stimulate the property market.

The transfer and mortgage fees will be reduced to 0.1% of appraisal value, down from 2% and 1%, respectively. The measure covers sales of a building, or building and land, with a maximum size of one rai that hasn't been developed under the Land Allocation Act.

It will be effective after being published in the Royal Gazette until March 28 next year.

The measure does not cut the special business tax, which remains at 3% of appraised value. However, sellers who have been registered on the sold property for at least one year will be exempt from paying this tax.

About 220,000 second-hand homes hit the market each year, with about 60,000 sales.

Earlier, the government announced a measure to cut fees and taxes for new and old developer-built residential units and office buildings.

Voradet Sivatachanon, chief executive of the property brokerage ERA Franchise (Thailand) Co, said the extension of the incentives to cover self-built units would help boost the second-hand home market by 20-25%.

''It's like an old pill that revitalised the market as the measure expired on Dec 31 last year,'' he said.

The government should also offer a full tax deduction for mortgage interest payments as in the United States, he added.Mr Voradet said full tax deduction for housing loan interest would be an effective tool to help the overall market. Many taxpayers are keen to take advantage of tax deductions, as reflected by growing sales of retirement mutual funds and long-term equity funds, but those who succeed in doing so are largely salaried people.

At the very least, he said, the government could offer tax deductions for the first three to five years of interest.