Hous­ing trans­ac­tions in Taipei, Taoyuan, Tainan re­bound

The China Post - - LOCAL -

Res­i­den­tial and com­mer­cial prop­erty trans­ac­tions in March re­bounded in Taipei, Taoyuan and Tainan cities as the num­ber of busi­ness days re­turned to nor­mal dur­ing the month, af­ter the Lu­nar New Year hol­i­day in Fe­bru­ary, mar­ket an­a­lysts said Satur­day.

More im­por­tantly, trans­ac­tions were boosted in March be­cause con­cerns over the cap­i­tal gains tax tar­get­ing home sales showed signs of fad­ing, and in­vestors rushed to re­turn to the mar­ket to buy, an­a­lysts said.

Ac­cord­ing to mar­ket statis­tics, trans­ac­tions of homes, of­fices and shops in Taipei in March rose 17.7 per­cent from a month ear­lier to 2,179 units. Taipei, the cap­i­tal of Tai­wan, is the most watched prop­erty mar­ket in the coun­try.

In Taoyuan, north­ern Tai­wan, trans­ac­tions of res­i­den­tial and com­mer­cial prop­erty in March in­creased at a higher rate of 41.8 per­cent from Fe­bru­ary to 2,846 units, while hous­ing sales in Tainan, south­ern Tai­wan, to­taled 1,515 units, up 29.4 per­cent from a month ear­lier.

Chang Ching-yun, head of re­search at Na­tional Re­alty, said that a plan pro­posed by the Min­istry of Fi­nance un­der a tax re­form scheme to col­lect the cap­i­tal gains on home sales has be­come more le­nient, help­ing buy­ing in­ter­est re­cover in the lo­cal prop­erty mar­ket.

Ac­cord­ing to the lat­est ver­sion of the tax plan, home sell­ers will face a 35 per­cent tax if they sell their prop­erty af­ter hav­ing owned it for less than one year. In cases where they had held the prop­erty for one to two years and two to 10 years, the tax rate will fall to 30 per­cent and 17 per­cent, re­spec­tively.

If they had held the prop­erty for more than 10 years be­fore sell­ing, the tax rate will fall fur­ther to 12 per­cent.

In the orig­i­nal ver­sion of the tax plan, home sell­ers would have faced a tax rate of as much as 45 per­cent.

Still, the tax re­form mea­sure marks a sig­nif­i­cant change from the present prac­tice in that home sell­ers will be taxed based on their cap­i­tal gains from the ac­tual sales amount rather than the cur­rent gov­ern­ment- as­sessed prop­erty value, which is merely a frac­tion of the sell­ing price.

The tax plan is pending ap­proval from the Leg­isla­tive Yuan.

Chang said that she ex­pects buy­ing in the lo­cal prop­erty mar­ket will rise fur­ther af­ter law­mak­ers rat­ify the tax bill and re­move un­cer­tainty from the mar­ket.

But in Taipei, de­spite a mon­thon- month re­bound in hous­ing trans­ac­tions, sales still fell 17.7 per­cent from a year ear­lier to a new low in al­most two years.

Zhong­shan Dis­trict reg­is­tered the largest trans­ac­tions of 339 units, ahead of Neihu Dis­trict with 283 units and Wen­shan Dis­trict with 263 units.

In the other two cities, buy­ing in­ter­est had also sig­nif­i­cantly dropped com­pared with last year. In Taoyuan, hous­ing sales for March plunged 26 per­cent from a year ear­lier, while sell­ing prices also fell about 10 per­cent, the statis­tics showed.

In Tainan, March prop­erty trans­ac­tions also fell com­pared to last year, reg­is­ter­ing a 13.7 per­cent year-on-year fall, but home prices ap­peared sta­ble due to a rel­a­tively low com­par­i­son over the same pe­riod in 2014, the data in­di­cated.

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